Monterey County Office of Education Report

Annual Review April 1, 2024 Monterey County Office of Education Michael H. Fine Chief Executive Officer April 1, 2024 Deneen Guss, Ed.D., Superintendent Monterey County Office of Education 901 Blanco Circle Salinas, CA 93901 Dear Superintendent Guss: In January 2024, the Monterey County Superintendent of Schools entered into an agreement with the Fiscal Crisis and Management Assistance Team (FCMAT) to perform the following: Conduct an annual follow-up evaluation of the county superintendent of school’s fiscal over- sight provided to the South Monterey County Joint Union High School District using FCMAT’s County Office Evaluation Tool, and make recommendations for improvement, if any. This report contains FCMAT’s findings and recommendations from the third annual evaluation of the Monterey County Superintendent of School’s oversight of the South Monterey County Joint Union High School District. FCMAT appreciates the opportunity to serve the Monterey County Superintendent of Schools and extends thanks to all the staff for their cooperation and assistance during this review. 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 .......................................................................................................1 Background ................................................................................................................1 County Office Evaluation Guidelines ..................................................................2 Study Team ................................................................................................................2 County Office Evaluation Tool .....................................................................3 Summary ...........................................................................................................4 Findings ............................................................................................................5 Conclusions and Recommendations ........................................................9 Appendices .....................................................................................................10 Fiscal Crisis and Management Assistance Team Monterey County Office of Education i 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 ser- vices 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. seidutS fo rebmuN AB 1840 Annual Evaluation 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 Crisis and Management Assistance Team Monterey County Office of Education ii AB 1840 Annual Evaluation 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 responsibili- ties 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 dis- tricts 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. 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 Monterey County Office of Education iii AB 1840 Annual Evaluation Introduction Background On July 22, 2009, Senate Bill 130 (Chapter 20, Statutes of 2009) was signed into law, authorizing the appointment of a state administrator and providing a $13 million emergency state loan or line of credit to the King City Joint Union High School District (later renamed the South Monterey County Joint Union High School District). This insolvency occurred after several years of financial struggles that were punctuated by significant issues related primarily to collective bargaining. At the core of the district’s struggles was a difference in interpretation regarding a signed and approved collective bargaining agreement that was negotiated in 2007. After a series of attempts to solve the dispute, the case was forwarded to the Public Employee Relations Board (PERB) to adjudicate. As a result of PERB’s final decision, the district found itself in severe financial distress, which eventually led to fiscal insolvency. Had the PERB decision not reversed the district’s position on the collective bargaining issue, the district might have remained solvent, although the county office of education had communicated fiscal issues and concerns related to the cost of total compensation for all staff prior to the declaration of insolvency. In September 2018, Assembly Bill (AB) 1840 (Chapter 426, Statutes of 2018) was signed into law, making a significant change in how insolvent school districts are administered after they receive a state emergency appropriation. As part of that legislation, California Education Code (EC) 41326(l) was amended to give the Fiscal Crisis and Management Assistance Team (FCMAT) the responsibility of reviewing the fiscal oversight performed by the county superintendent of schools for any district receiving an emergency apportion- ment. FCMAT is required to report its findings to the Legislature and provide a copy of that report to the Department of Finance, the superintendent of public instruction (SPI), and the president of the State Board of Education (SBE). This report is required to include findings regarding fiscal oversight actions that were or were not taken and may include recommendations for an appropriate legislative response to improve the fiscal oversight of school districts. In the years following the initial 2020 FCMAT report of fiscal oversight performed by the county superinten- dent of schools, FCMAT will perform annual reviews until the district exits receivership. These reviews will assess the effectiveness of the county superintendent’s involvement with the district during the course of their normal oversight responsibilities. County Office Evaluation Guidelines FCMAT entered into a study agreement with the Monterey County Superintendent of Schools on January 11, 2024 for the third annual evaluation required by EC 41326(l). A study team visited the county office on February 8, 2024 to conduct interviews, collect data and review documents. Following fieldwork, the study team continued to review and analyze documents. This report is the result of those activities and actions related to the annual evaluation. 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. Fiscal Crisis and Management Assistance Team Monterey County Office of Education 1 AB 1840 Annual Evaluation Study Team The team was composed of the following members: Michelle Giacomini Nicolas Schweizer FCMAT Deputy Executive Officer FCMAT Consultant Misty Key Sheldon Smith FCMAT Consultant FCMAT Consultant Leonel Martínez FCMAT Technical Writer Each team member reviewed the draft report to confirm accuracy and achieve consensus on the analysis. Fiscal Crisis and Management Assistance Team Monterey County Office of Education 2 AB 1840 Annual Evaluation County Office Evaluation Tool FCMAT has developed the County Office Evaluation Tool (COET) for the initial and annual evaluations to help assess the effectiveness of a county superintendent of schools’ fiscal oversight and support of school districts that have received an emergency apportionment. The annually administered COET includes 12 questions and is intended to satisfy the requirements of EC 41326(l) regarding review and assessment of the county superintendent of schools’ fiscal oversight and support for a school district’s recovery. The tool focuses on the status of the district’s recovery, the continu- ing implementation of the long-range recovery plan (LRRP), the role of the county administrator or county trustee, the multiyear financial projection, and on how the county superintendent of schools is addressing elements that received an answer of “No” in the initial evaluation. FCMAT used the annual COET during interviews with multiple staff from both the district and the county superintendent’s office, and with the county trustee. The COET identifies the key review elements performed by the county superintendent in their fiscal over- sight and support of the district, and their ability to communicate effectively with the county trustee, district staff and governing board. FCMAT also gathered information through an initial document request before the on-site interviews. The team’s conclusions are compiled in this report as a narrative, with recommenda- tions noted as appropriate. In addition, the team addressed questions related to the overall implementation of EC 41326(l) and made recommendations to support that process, including the county trustee’s specific roles and responsibilities. The county superintendent of schools’ objective, supported by the county trustee and other components of a recovery team (FCMAT, the California Department of Education and the SBE), is to facilitate the district’s full recovery and address the major elements of the district’s LRRP so that it can govern independently, maintain solvency, and effectively support the education of all students. Fiscal Crisis and Management Assistance Team Monterey County Office of Education 3 AB 1840 Annual Evaluation Summary The Monterey County Superintendent of Schools provides fiscal oversight to all the county’s school dis- tricts as a result of various statutes including EC 1240(b) and 42120 and following. During the initial EC 41326(l) evaluation in 2020, FCMAT assessed the county superintendent of schools’ involvement with the district during its normal oversight responsibilities and specifically during the period that led to the district’s declaration of insolvency and beyond, up to and including the date of the evalua- tion. To do so, FCMAT reviewed documents prepared by the county superintendent’s staff, asked a series of questions relating to the time leading up to the insolvency, and reviewed the county superintendent’s oversight practices. The annual evaluation focuses on the status of the district’s recovery, whether the district has made prog- ress since the last review, and how effectively the county superintendent supports the district’s staff, board, and county trustee in that process. In addition, the annual evaluation reviews any area from the initial review that is listed as a “No” on the tool and determines if those issues continue to be addressed. The county superintendent of schools continues to be effective in supporting the district’s full recovery within the guidelines in the Education Code and the findings and recommendations in the LRRP. The outstanding standards from the initial February 2010 comprehensive review and recovery of the five oper- ational areas have been converted to the latest SBE-approved standards, a time-intensive exercise that has allowed the county superintendent, county trustee and school district to further collaborate and work toward the district’s recovery. The county superintendent continues to require the district to perform a self-evaluation. The county superintendent’s office has developed a spreadsheet that the district must com- plete for each area of the comprehensive review, itemizing the actions district staff have taken and provid- ing evidence to demonstrate progress. In addition to its normal oversight responsibilities and duty to oversee the district’s implementation of the LRRP, the county superintendent of schools continues to assign county office staff members to each of their district counterparts for additional support, organized around the five comprehensive plan areas. There is significant communication between the district and the county superintendent of schools, which provides direction to the district while monitoring its progress. FCMAT found that communication among the county superintendent of schools, county office staff and county trustee in the current model of oversight was timely and consistent with a focus on district recovery. Concerns remain about providing programs and services for students at the expense of a conservative budget mindset. The district has had three different superintendents in the past three years, creating an unstable environment that has since been mitigated with the hiring of a permanent superintendent, causing a lack of progress on increasing student academic achievement and creating a leadership void. This results in inadequate support to meet the needs of all students. Because the indicators of student performance continue to demonstrate a need for improvement, the county superintendent of schools should continue to ensure that the district focuses on increasing services to students while maintaining a balanced budget, and that it invests in the multiple leadership positions that lead its instructional programs and increase stu- dent achievement. The following section of this report focuses on the team’s implementation of the annual COET, including general findings and, in some cases, recommendations for improvement. All the questions are listed below, each followed by a narrative. If a deficiency in an area is material, it is noted in the narrative. Fiscal Crisis and Management Assistance Team Monterey County Office of Education 4 AB 1840 Annual Evaluation Findings 1. Was the Long-Range Recovery Plan (LRRP) developed by the administrator within the statutory timelines? Alternatively, has the county office of education (COE) adopted the FCMAT comprehensive review in lieu of the LRRP? Have the plans been consistently updated by the trustee and/or COE? The district uses the FCMAT comprehensive review in lieu of an LRRP. Since FCMAT’s last visit, the county trustee has been working with the district during its transition from the approved standards first used during the district’s comprehensive review in February 2010 to the latest standards approved by the SBE on March 2019. These updated standards align with those applicable to districts that would enter receivership at the current time. This conversion has enabled the current district team to identify areas in need of immediate attention. The process has also highlighted that district staff rate district progress higher than county superintendent staff and the county trustee across the five comprehensive review operational areas (community relations and governance, person- nel management, pupil achievement, financial management, and facilities management). The variations in ratings have acted as a vehicle for meaningful discussions and guidance between the county trustee, the district and the county superintendent. 2. What role has the COE played in supporting the district with the Long-Range Recovery Plan? The county superintendent continues to actively support the district as evidenced in the previous annual report, engendering engagement and communication within the school district. The superintendent does so by providing staff to the district, monitoring progress through updates from the county trustee, receiving operational interactions, and having her staff collaborate directly with the district. Interviews indicated a strong sense of support and collaboration between the district, the county superintendent’s team and the county trustee. The district's intention to use more services offered by the county superintendent, rather than seeking external providers, underscores the mutual respect and partnership between the district and the county superintendent. In addition, there is evidence of the focused effort by the county superintendent and the county trustee over the past year to guide the district in implementing robust processes aimed at improving governance, hiring practices, leadership, and implementation of services for students. The district governing board has empowered the new district superintendent to lead the district, prioritize student needs and increase student outcomes, which signifies a significant shift in the district’s approach. The upcoming introduction of a new district logo and rebranding, emphasizing the principle of "students come first," further highlights this commitment to student-centric initiatives. The county superintendent has played a crucial role in fostering this new focus and promoting change within the district. Fiscal Crisis and Management Assistance Team Monterey County Office of Education 5 AB 1840 Annual Evaluation 3. What process has the COE used to monitor the progress of implementing the LRRP or the FCMAT comprehensive review for the district? Regular, ongoing communication between the district, county trustee and the county superintendent of schools continues; updates are shared, next steps are discussed, direction is provided, and progress is monitored. Ongoing communication includes monthly meetings between the county superintendent of schools and key county office and district staff, as well as additional meetings between the county trustee and the district superintendent. The various meetings, as well as the ongoing communication, show that the county superintendent has implemented processes that support the use of the most recent comprehensive review as a measuring tool and guidance mechanism. The county superintendent maintains the requirement to conduct an annual self- assessment using the spreadsheets developed by the county superintendent’s office for each area of the comprehensive review. The spreadsheets help the district document evidence and actions it has taken to demonstrate progress since the last review. The process has created substantial discussions between the district, county superintendent, and county trustee. 4. What role has the trustee played in maintaining the financial recovery plan in cooperation with the COE? The county trustee continues to assess the needs in all five operational areas of the comprehensive review, monitor all district operations, and support the continuing focus on long-term recovery. The county trustee remains in close communication with the county superintendent and the new district superintendent. The county trustee completed FCMAT’s Fiscal Health Risk Analysis (FHRA) tool since the last annual report and is continuing to use the tool to assess the district’s fiscal status on an ongoing basis. The county superintendent, the district and the county trustee should all use this tool independently and then compare the results to ensure alignment of the district’s financial risk. The trustee could play a key role in the 2024-25 labor negotiations as the district has a history of adversarial bargaining, with miscommunication, labor unrest, and governance challenges. Subsequently, it is critical that any salary increase still leaves adequate funds to make scheduled payments to pay off the state loan by October 2028. The county trustee will play a pivotal role working with the county superintendent, district administration, the district board, and the district’s legal counsel to guide the negotiating parties to an agreement that conforms to AB 1200 fiscal solvency requirements. 5. What is the status of the district’s budget regarding deficit spending, fund balance, and reserve for economic uncertainties? As of the 2023-24 first interim, the district is deficit spending by $11,572,906 in the current year, which includes transfers to other funds of $7,155,555. Deficit spending is reduced to $2,060,445 in 2024-25 and to $114,330 in 2025-26. The district maintains a reserve for economic uncertainties of 10% of general fund expenditures in the current and two subsequent years, exceeding the minimum requirement of 3%. Additionally, there are fund designations for items such as supplemental and concentration funds, academic achievement, capital projects, major maintenance and technology infrastructure. Fiscal Crisis and Management Assistance Team Monterey County Office of Education 6 AB 1840 Annual Evaluation The district has a positive financial certification. As part of its fiscal oversight responsibilities, the county superintendent monitors fund balance levels to ensure full support for student services and make certain that the district is aligning with its goals, objectives, and actions outlined in its Local Control and Accountability Plan (LCAP) to enhance student outcomes and achievement. The district is projecting average daily attendance (ADA) growth from pre-COVID levels because of students returning to the district from charter schools. Predictable ADA growth will help the district address the slower Proposition 98 growth in the coming years. 6. What process does the COE use to assess cash flow? The county superintendent has an ongoing process for analyzing and monitoring the district’s cash by month, as well as for budget, interim and unaudited financial reports. Each month, the county superintendent’s staff reviews posted transactions and upcoming cash needs to ensure adequate cash flow for all districts. The county superintendent’s staff also review the cash report daily. Given the district's fund balance, cash flow is not an issue, even with current deficit spending. 7. Has the COE fulfilled all of the statutory requirements for fiscal oversight in accordance with all applicable sections of the Education Code? The county superintendent of schools has fulfilled statutory requirements for fiscal oversight in accordance with applicable Education Code provisions. The county superintendent has a well-established process and system for fiscal oversight of the district, as evidenced by documents and interviews, and has demonstrated a good understanding of the district’s underlying issues. 8. Has the COE performed timely evaluations of the trustee? The county superintendent evaluated the county trustee in December 2023 and highlighted accomplishments from the previous year, as well as growth areas for 2024. 9. Is the trustee present at board meetings and closed sessions? Has the trustee used stay or rescind authority and, if so, regarding what issue? The county trustee is present at all board meetings and closed sessions. The county trustee has a good working relationship with the district board, district administration, and county superintendent. Consequently, the county trustee can provide direction and insight early in the decision-making process, so issues do not arise that require the use of stay or rescind authority. Stay or rescind authority is typically used when either the district’s board or its staff has not cooperated with the county trustee’s direction or has approved actions that are not in the district’s operational or fiscal best interests. The county trustee has not used stay or rescind authority, which indicates that the county trustee is effective, and that the district’s board and superintendent have a desire to exit from receivership. 10. What is the status of the district's recovery? The district has hired two qualified and experienced leaders since FCMAT’s last report (the superintendent and the assistant superintendent of instruction), addressing a previous deficiency in strong leadership. An experienced chief business official was already in place, Fiscal Crisis and Management Assistance Team Monterey County Office of Education 7 AB 1840 Annual Evaluation and the county superintendent has provided strong support. The district’s financial and personnel management processes are strong and continue to evolve, the district is solvent, and governance appears healthy. Under the direction of the new district leadership, the potential for the district’s recovery increases significantly. During interviews, it was evident that there is a focus on student achievement that was not present during past visits. The following district goals were also shared: Goal 1: Improve, monitor and sustain student achievement. Goal 2: Improve school climate in support of teaching, learning, and student safety. Goal 5: Ensure compliance with education codes, board policies, and administrative regulations. The county superintendent of schools has effectively structured district oversight in the five interrelated areas that caused the receivership and has also fostered open communication with the district in each of these areas. The district continues to be well positioned financially, exceeding minimum requirements with healthy fund balances and reserves. With established processes for revenue projections, ADA, and expenditure forecasts in place, the district’s fiscal health should remain healthy and strong if its governing board continues to follow the chief business official’s recommendations regarding fiscal matters and collective bargaining affordability. The district has invested in strong district leadership. There is now a balance between the board and the superintendent so the board can now devote its energies to effective governance rather than addressing leadership deficiencies. Supported by stable fiscal management, governance, and leadership, the district is progressing along the path to recovery. The district’s final payment on the I-Bank loan is due in October 2028. 11. On or before October 31, has the governing board of the school district prepared a report on the financial condition of the school district, which the trustee has reviewed, and the county superintendent of schools has subsequently received a copy of? (Education Code Section 41321). On October 6, 2023, the district prepared the annual report on its financial condition. The county trustee reviewed this document, and the county superintendent of schools received a copy. The document can be found in Appendix C of this report. 12. How has the county office addressed elements in the initial review that were designated as a "No" and included in the final report? County superintendent of schools’ staff have continued to ensure that the areas identified as deficiencies in the initial review continue to be addressed in the fiscal review checklists and oversight documents. Fiscal Crisis and Management Assistance Team Monterey County Office of Education 8 AB 1840 Annual Evaluation Conclusions and Recommendations The Monterey County Superintendent of Schools is leading a focused effort to support the district in achieving long-term financial solvency, has cultivated and fostered the relationships and trust required for changing behavior, has overseen the district’s actions as it has approved and implemented policy and pro- cedural changes, and has brought an optimistic outlook to the oversight process. A process has been clearly articulated for the district to monitor and support implementation of actions to address deficiencies identified in the comprehensive review. The district’s financial condition has remained sound. It has filled the superintendent position, which had high turnover. It is critical to maintain consistency in leadership to remain fiscally solvent, improve academic achievement, and many other crucial reasons. Because of this, the county superintendent of schools should: 1. Continue to implement its process to support and monitor the district's implementation of the comprehensive review. 2. Continue to focus the district on improving student achievement. 3. Request that both the district and the county trustee complete the FHRA annually and compare the results to ensure alignment of the district’s financial risk. 4. Request that the county trustee report the district’s progress toward implementing the outstanding findings and recommendations in the comprehensive review to the county superintendent and other interested parties at least annually. The next annual review will assess progress toward these goals. The status of last year’s recommendations includes: 1. Continue to implement its process to support and monitor the district's implementation of the comprehensive review. Ongoing 2. Focus the district on improving pupil achievement. Ongoing 3. Support the district in its process to recruit, hire and retain a qualified permanent superintendent. Complete 4. Encourage the district to invest in multiple instructional leaders: one to oversee policy and governance and others to manage instructional practices, improve student academic achievement, and increase positive outcomes for students. Complete 5. Request that the trustee report the district’s progress toward implementing the outstanding findings and recommendations in the comprehensive review to the county superintendent and other interested parties at least annually. Ongoing 6. Request that the trustee use FCMAT’s FHRA tool to guide his work with the district. Ongoing The transition from state to county administration as a result of AB 1840 has resulted in a stronger school district that is progressing through the steps that lead to full recovery. In part, the purpose of these annual evaluations is to clarify the roles and responsibilities of all involved education partners so that they can assist and support dis- trict recovery. This report attempts to assess the district’s recovery status and the essential support provided by the county superintendent of school’s office and establish a baseline for the next annual report, which will occur approximately one year from the publication of this report. Fiscal Crisis and Management Assistance Team Monterey County Office of Education 9 AB 1840 Annual Evaluation Appendices A: Trustee Roles and Responsibilities B: Study Agreement C: Annual Report on the Financial Condition Fiscal Crisis and Management Assistance Team Monterey County Office of Education 10 AB 1840 Annual Evaluation Appendix A: Trustee Roles and Responsibilities Trustee Roles and Responsibilities Acceptance by a district of an emergency state apportionment made pursuant to Section 41320 constitutes an agreement by the district that a trustee will be appointed to ensure the district’s fiscal recovery and solvency per Education Code Section 41320.1. The trustee shall be appointed jointly by the county superintendent, the Superintendent of Public Instruction (SPI), and the president of the State Board of Education. The trustee should have recognized expertise in management and finance, shall report directly to the county superintendent, and shall serve until the district has adequate fiscal systems and controls in place and the SPI has determined that the district’s future compliance with the fiscal plan approved for the district pursuant to Section 41320 is probable. The trustee shall monitor and review the operations of the district, and shall perform the following functions: 1. Serve in a fiscal oversight capacity until the district has adequate fiscal systems and controls in place, and future compliance with the approved recovery plan is probable. 2. Provide advice and make recommendations to district staff and governing board members regarding budgetary, fiscal, or other issues that may affect the financial condition of the district. 3. Attend all meetings of the governing board and review all governing board materials prior to each board meeting to determine if any items or intended action will have a negative fiscal impact on the district’s financial condition. 4. Stay or rescind an action of the governing board of the district or of the personnel commission where, in the judgment of the trustee, the action may adversely affect the financial condition of the district or be contrary to the district’s approved recovery plan. 5. Notify the county superintendent of schools when a stay or rescind of a governing board decision is made. The county superintendent then shall notify the Superintendent and the president of the state board or his or her designee within five business days. 6. Monitor the financial projections and cash balances of all district funds for the current and two subsequent fiscal years, and, if necessary, assist district staff in preparing these projections. 7. Monitor all collective bargaining activity and review all proposals being considered, including the resulting fiscal impact. 1/17/2022 Fiscal Crisis and Management Assistance Team Monterey County Office of Education 11 AB 1840 Annual Evaluation 8. Regularly meet with the district superintendent and chief business officer to obtain updates on the district’s efforts to reduce expenditures or enhance revenues. 9. Assist the county superintendent with establishing timelines and prescribing formats for reports and other materials to be used to monitor and review the operations of the district. 10. Communicate openly and timely with the county superintendent, district staff, governing board, and community, and promptly inform the county superintendent of critical issues or incidents. 11. Review and approve the district’s required annual report of the financial condition of the district, including all of the following information: (1) Specific actions taken to reduce expenditures or increase income, and the cost savings and increased income resulting from those actions, to ensure the revisions are consistent with the district’s needs and recovery plan. (2) The adopted budget for the current fiscal year. (3) Reserves for economic uncertainties. (4) Status of employee contracts. (5) Obstacles to the implementation of the adopted recovery plan. 12. Using the Fiscal Crisis and Management Assistance Team’s (FCMAT’s) Fiscal Health Risk Analysis, annually evaluate the district’s risk of insolvency in the current and two subsequent fiscal years and communicate findings to the county superintendent. 13. Determine, with concurrence from the county superintendent and SPI, that future compliance by the district with the approved recovery plan is probable so that the district can meet its future financial obligations. 14. Provide regular updates to the county superintendent regarding the progress of the district toward fiscal stability. 15. Consult with, and seek recommendations from, the county superintendent, the SPI, and FCMAT in ensuring the fiscal recovery and solvency of the district. 16. With approval from the county superintendent, the SPI, and the president of the state board, retain the authority and responsibilities of an administrator, as set forth in Education Code Section 41325. 17. Assist in related matters as needed regarding the district’s fiscal recovery and solvency, in accordance with Education Code Sections 41320.1, 41321, and 41322. 18. Review the financial and budgetary conditions of the district, including an analysis of internal controls, and determine if it may be unable to meet its financial obligations for the current or two subsequent fiscal years, or should receive a qualified or negative interim financial certification. 19. Meet with appropriate district staff, as needed, to assess fiscal health, organizational structure and staffing, effectiveness of internal controls, and other related concerns. 1/17/2022 Fiscal Crisis and Management Assistance Team Monterey County Office of Education 12 AB 1840 Annual Evaluation 20. Consult with the governing board on fiscal and budgetary matters, facilities projects, debt obligations and other operational areas, as needed. 21. Provide recommendations for improvements in district processes related to the budget, including position control, areas for cost containment, reducing unrestricted contributions from the general fund, etc. 22. Confirm that the district conducts its business operations in compliance with statutory requirements and within acceptable legal and professional standards. 23. Advise county superintendent regarding potential action to improve or protect the fiscal solvency of the district. 24. Provide additional support, technical assistance, professional learning, and advice outlined in the five operational areas defined by Education Code Section 41327.1 in the Long Range Recovery Plan (LRRP). Focus on assisting the district in addressing recommendations identified in the LRRP to support maintaining future solvency, organizational effectiveness and recovery. Report annually to the county superintendent regarding the progress made by the district in implementing LRRP. Related Education Code Sections: 41320, 41320.1, 41322 1/17/2022 Fiscal Crisis and Management Assistance Team Monterey County Office of Education 13 AB 1840 Annual Evaluation Appendix B: Study Agreement Fiscal Crisis and Management Assistance Team Monterey County Office of Education 14 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 15 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 16 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 17 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 18 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 19 AB 1840 Annual Evaluation Digitally signed by Michael Fine Michael Fine Date: 2024.01.11 09:10:52 -08'00' Fiscal Crisis and Management Assistance Team Monterey County Office of Education 20 AB 1840 Annual Evaluation Appendix C: Annual Report on the Fiscal Condition Fiscal Crisis and Management Assistance Team Monterey County Office of Education 21 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 22 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 23 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 24 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 25 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 26 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 27 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 28 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 29 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 30 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 31 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 32 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 33 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 34 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 35 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 36 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 37 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 38 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 39 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 40 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 41 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 42 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 43 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 44 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 45 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 46 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 47 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 48 AB 1840 Annual Evaluation Fiscal Crisis and Management Assistance Team Monterey County Office of Education 49