Abstract
This study analyzed the financial failure of selected California school districts using a case study methodology. The results provided detailed information on how these districts failed. It identified the warning signs associated with impending financial difficulties provided by the California Department of Education's Criteria and Standards. The study also discussed the impact of the behavior of the Governing Board and district administration on the fiscal health of each district. Data were collected from three California school districts that had received emergency apportionments as the result of financial mismanagement. The study performed an analysis of three years of budget data, management reviews, recovery plans, interviews with district personnel and the state-appointed trustee, and other archival data including audit reports, newsclippings, letters and memos. The data were analyzed first by describing each district and their experience individually as case studies, and then, examining each district using the variables established in the California Department of Education's Criteria and Standards. The study provided significant findings in areas relating to the Criteria and Standards, the role and responsibility of Governing Boards, and the role and responsibility of district administrators. The study corroborates the notion that the California Department of Education's Criteria and Standards are an effective method of determining the financial condition of a district. It was recommended that: (1) governing boards receive training to enable them to better understand and monitor the financial affairs of their districts; (2) district Chief Business Officials be certified prior to assuming the position; (3) the California Department of Education's Criteria and Standards continue to be developed and utilized in the analysis of school district financial affairs; (4) auditing standards be developed that would give Governing Boards information about the true financial picture of the district; (5) training and certification be required for all site and program managers on how to prepare and manage site and program budgets; (6) regular budget reports as well as training and certification for all site and program managers which focus on understanding and using these budget reports be required; and (7) assumptions and priorities associated with the budget be developed with broad-based input from the various segments of those organizations involved in the district.