FOR IMMEDIATE RELEASE
February 6, 2003
Board Approves Oversight Panel for
Cairo School District
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
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.”
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.
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.
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.
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.
Superintendent Robert E. Schiller has 10 days to appoint the
three-member oversight panel.
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.