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News

FOR IMMEDIATE RELEASE
February 6, 2003

State Board Approves Oversight Panel for
Cairo School District

SPRINGFIELD, February 6, 2003 – The State Board of Education acted today to create a Financial Oversight Panel for financially struggling Cairo School District 1 in Alexander County. The Cairo School Board voted unanimously January 23 to petition the State Board for a Financial Oversight Panel and emergency financial assistance.

The Cairo school district is facing severe financial difficulties and the school board has concluded that emergency state assistance is necessary to complete the school year,” said State Superintendent of Education Robert E. Schiller. “Hundreds of our school districts have deep financial problems, but Cairo’s situation adds to the growing list of districts that – without state assistance – might have to provide less than a full year of school for students.”

State Board staff members have been working with the district to analyze its current funding status. With that information, Cairo district Superintendent Robert Isom concluded the district “was in the midst of a major financial crises.” As of December 31, 2002, the district was utilizing restricted funds in excess of $60,000 to meet ongoing operational expenditures. In January 2003, the district issued Tax Anticipation Warrants totaling $414,000 which is the maximum allowable by law. Current financial projections indicate that the district will likely exhaust all available resources in its three operating funds within the next sixty days. By that time, the district will need to secure a line of credit for an additional $400,000 to $500,000 to meet current year expenses.

With a Financial Oversight Panel in place, the Cairo 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.

Under the law, the panel can recommend an Emergency Financial Assistance grant from the state of $230,000 and an Emergency Financial Assistance Loan of $900,000. The State Board could provide the grant from funds remaining in the Emergency Financial Assistance Fund if the FOP concludes it is needed. If the panel recommends the emergency loan, it would have to be approved by the General Assembly and Governor.

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.

State Superintendent Robert E. Schiller has 10 days to appoint the three-member oversight panel.

Cairo will be the sixth district to operate with an 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 an FOP since 1994.  Round Lake School District 116 in Lake County and Hazel Crest School District 152 ½ in Cook County each operated with an FOP but have since been placed under the oversight of School Finance Authorities.  The State Board created a Financial Oversight Panel in December 2002 for Livingston School District 4 in Madison County.

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