FOR IMMEDIATE RELEASE
17 , 2002
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Panel, then subsequently rescinded that action.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
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
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.