Why AB1200 was created
AB1200 was created because of the need to ensure that local educational agencies throughout California adequately prepare to meet their financial obligations. The law was rooted in the concerns that arose following the bankruptcy of Richmond School District, and the fiscal collapse of a few other districts that were preparing to seek emergency loans from the state. Through the passage of AB1200, the legislature proclaimed that even in a time of tight revenues, the vast majority of California’s 1,000-plus school districts have been able to maintain balanced budgets, and that local educational agencies should not expect to be bailed out by the state when they exhibit a pattern of unacceptable fiscal management. While only a handful of the state’s school districts have reached this extreme stage of fiscal failure, the disturbing trend has shown an increasing number of school districts dipping into general fund reserves and spending more than they receive. The passage of AB1200 sent a strong message to local educational agencies to put and keep their finances in order.
What AB1200 Does
AB1200 is a statewide plan for county offices of education and school districts to work together on the local level to improve fiscal procedures, standards and accountability. AB1200 expands the role of county offices of education in monitoring school districts and mandates that they intervene, under certain circumstances, to ensure districts can meet their financial obligations. In crisis situations county offices can call upon the Fiscal Crisis and Management Assistance Team (see “The Role of FCMAT”) to help determine appropriate steps toward fiscal recovery. AB1200 provisions also apply to the state in its monitoring role over county offices of education. In short, no publicly-funded K-12 school operation has been left unaffected by this innovative effort to ensure fiscal solvency throughout the state’s school system.
How AB1200 works
There are several defined “fiscal crises” that can prompt a county office of education to intervene in a district: a disapproved budget, a qualified or negative interim report or recent actions by a district that lead the county office to conclude that the district will not be able to meet its financial obligations. AB1200 spells out the procedures by which a county office monitors, assists, warns, or intervenes in the fiscal operation of a school district. A district can appeal a disapproved budget or a negative or qualified interim certification all the way up to the State Superintendent of Public Instruction. In any of these situations, a county office or even the state could ask for FCMAT’s assistance and assessment.