More than 90% of Colorado school districts are meeting the state’s benchmarks for fiscal health, according to an annual analysis released Wednesday. 

Of Colorado’s 178 school districts, only 17 showed indications of financial stress in 2021, the Office of the State Auditor found. In 2020, 20 districts failed to meet fiscal health benchmarks. In 2019, 32 districts failed to meet the benchmarks — though some criteria were modified after 2019 that would lower that number. 

“Missed benchmarks can warn of financial stress requiring further review and action by school district administrators and the Department of Education,” Audit Manager Crystal Dorsey said.

The most commonly missed benchmark in 2021 was the operating margin ratio, which calculates the amount added to a district’s reserves for every $1 in revenue. The analysis found that 12 school districts were spending down their reserve balance to supplement operations.

Seven school districts failed to meet the debt burden ratio, meaning a district’s annual revenue won’t cover its annual debt payments. Four districts were flagged for decreasing the reserves in their general fund.

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Of the 17 financially stressed school districts in 2021, 11 missed one financial benchmark and six missed two benchmarks.

Those six districts were Arriba-Flagler Consolidated School District 20 in Kit Carson County, Brush School District RE-2J in Morgan County, Buffalo School District RE-4J in Logan County, Miami-Yoder School District 60 JT in El Paso County, West Grand School District 1-JT in Grand County and School District 27J in Adams, Broomfield and Weld counties.

All six of the school districts provided explanations for failing to meet the financial benchmarks, with four saying they spent their reserve balances to retain staff and pay for student needs, safety upgrades, technology and building maintenance. One district saved and raised funds to build a new athletic facility and one attributed its struggles to limited staff resources and a large increase in COVID-19 funding.

Analyses of each school district are available online at leg.colorado.gov.

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