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News

FOR IMMEDIATE RELEASE
December 17 , 2002

State Board of Education considers Financial Oversight Panel for Livingston School District

The State Board of Education is considering the establishment of a Financial Oversight Panel to guide efforts to address the financial problems of the ailing Livingston School District 4. The district’s financial condition will be discussed at the State Board's meeting Wednesday in Chicago, and a vote is scheduled Thursday.

“The Livingston district presents symptoms that are all too common among Illinois school districts today,” said State Superintendent of Education Robert E. Schiller. “They’re running out of cash and will probably have to borrow more money to get through the end of the school year. In cases such as these, the state needs to step in to provide both immediate and long-range assistance.”

Livingston, in Madison County, has been on the State Board’s list of districts “Certified In Financial Difficulty” since 1988. The Livingston School Board voted in November to petition the State Board to appoint a Financial Oversight Panel, then subsequently rescinded that action. The State Board will consider establishing an involuntary FOP because the district’s finances are deteriorating and the district did not follow the financial plan approved by the State Board in June.

The State Board is authorized by state statutes to impose a FOP on certified districts that do not adhere to approved financial plans. Livingston’s previous plans had shown modest reductions in outstanding debt, and the FY2003 plan was approved in June contingent on the continued reduction of outstanding debt.

However, a recent audit of the district raised numerous concerns regarding declining fund balances and the necessity of borrowing further.

If a Financial Oversight Panel is established for Livingston, the Livingston Board would have to develop a financial plan to be approved by the Panel, and the FOP would have to review and approve every financial transaction of the district.

“This is a big step, but a necessary one,” said Schiller. “Hundreds of Illinois districts are in deficit, and the situation is not getting better. In the near term, state oversight such as this can help a district right the ship. In the long run, only a serious look at the way Illinois funds public education will help us improve the picture.”

Livingston would be the fourth district to operate with a FOP. Mt. Morris, the first district to have an FOP, has since annexed to another district. East St. Louis School District 189 in St. Clair County has operated with a FOP since 1994. Round Lake School District 116 in Lake County and Hazel Crest School District 152 ½ in Cook County each operated with a FOP but have since been placed under the oversight of School Finance Authorities.

Establishing a Financial Oversight Panel makes the district eligible for a grant and a loan from the Emergency Financial Assistance Fund if requested by the FOP and approved by the State Superintendent. The Financial Oversight Panel would be composed of three individuals appointed by the State Superintendent of Education and would exist for no less than 3 years and possibly up to 10 years.

Illinois State Board of Education
100 North First Street
Springfield, IL 62777