State board declares Fairview Heights school district ‘in financial difficulty’
The Illinois State Board of Education on Wednesday voted in approval of certifying Grant Community Consolidated School District 110 as being “in financial difficulty” because of its failure to provide required financial documents to the state board in a timely manner.
The Fairview Heights school district now has 45 days to submit a financial plan that budgets for solvency to the state board.
“Our hope is that by certifying the district as in financial difficulty and requiring a financial plan to be developed, the state board will be able to provide greater oversight, and that offers of support and assistance will be accepted so that we can work together to ensure the financial stability of the district,” said Director of School Business Services Michael Gum at the state board’s finance and audit committee meeting Tuesday.
The School Business Services division at the state board of education has two regional financial consultants prepared to help the district develop the plan, Gum said.
The district has been on the state board of education’s “financial early warning” list for fiscal years 2021 and 2022, and it’s expected to be on the “financial watch” list for fiscal year 2023, according to a memo included in the meeting’s agenda packet. Financial watch is the lowest designation an Illinois school district can receive on its financial profile from the state.
Additionally, District 110 failed to submit legally-required financial information — including its adopted budgets for fiscal years 2023 and 2024 and annual statement of affairs for fiscal year 2022 — to the state board in a timely manner, the memo says.
This prompted State Superintendent Tony Sanders to request the information as well as other documents to conduct an investigation of the district’s financial condition and to provide financial, technical and consulting services to the district.
Grant 110 failed to provide any of the requested information by the Dec. 15, 2023, deadline, but it did submit all but two of the documents later in December and in January.
Superintendent Matt Stines could not be immediately reached for comment Wednesday, but he told the BND Tuesday that the remaining two documents had been submitted. He explained that the small school district’s office consists of him and a bookkeeper, a position that has had a lot of turnover.
“It just doesn’t work when you’ve got that many people trying to balance the books,” he said.
As a result, some things weren’t done on the bookkeeping side that should have been, and now it’s taking some time to correct, he said.
The Illinois School Code allows the state board of education to certify that a district is in financial difficulty “when the district refuses to provide financial information or cooperate with the state superintendent in an investigation of the district’s financial condition,” the memo says.
The memo also states that Grant 110 has had a deficit in its operating funds for years, relies on issuing working cash fund bonds to supplement its revenue in the operating funds and failed to apply for several federal grant programs dating back to fiscal year 2020. The federal grants include the third wave of federal COVID-19 relief funds for public schools for which Grant 110 has been allocated about $1.54 million.
In Illinois, public school district budgets are divided into separate funds. The operating funds — the educational, operations and maintenance, transportation and working cash funds — make up the bulk of the budget, and money can be transferred between them by board resolution.
According to Grant 110’s annual financial reports, the district has had a deficit in its operating funds since fiscal year 2012. For fiscal year 2023, it had a deficit of about $1.8 million in its operating funds and a negative fund balance of about $290,000 at the end of the fiscal year.
On the Illinois Report Card for school year 2022-23, Illini Elementary received an “exemplary” designation, indicating it is in the top 10% of schools statewide in terms of overall performance. Grant Middle School was deemed “commendable,” the second-highest designation.
What’s next?
The state board of education will send the financial plan guidelines to Grant District 110 within 14 days. The district will have to submit its financial plan to the state board for approval by April 29. The state board will vote to approve the plan at its regular business meeting on June 12 or in August.
At the finance and audit committee meeting Tuesday, Gum outlined the four areas the state board will require Grant 110 to address in its plan: internal controls, grant management, financial reporting — including the timely submission of budgets and other documents — and eliminating the district’s deficits.
If the district doesn’t comply with the approved plan, the state board of education can rescind it and appoint a financial oversight panel.
