Audit Finds Financial Strain Growing in 16 Colorado School Districts

By: Marianne Goodland | Colorado Politics

Sixteen school districts in Colorado, almost all of them rural, are showing signs of financial stress, according to an audit released on the fiscal health of the state’s 178 public school districts.

Eighteen other districts, however, are moving off the list with improvements to their fiscal health in the 2023-24 fiscal year.

The Ellicott School District, east of Colorado Springs, was under the bullseye Monday, with five missed benchmarks in 2023-24, up from one in 2022-23. The district had no missed benchmarks just two years earlier. 

Of the 16 school districts that missed financial benchmarks, four were in rural El Paso County.

The annual fiscal health report covered three years, from fiscal year 2021-2022 through 2023-24. It examined debt and general fund reserve balances, using six ratios to determine a school district’s financial health. 

Those ratios look at whether a district can pay its bills in the short term, known as the asset sufficiency ratio; at its debt burden; the operating reserve, which shows the district’s ability to cover future expenses; its operating margin; and deficit fund balance. 

Jennifer Okes, the district operations special advisor for the Department of Education, told the Legislative Audit Committee that the state’s 178 school districts serve 881,000 students.

School districts are funded through two sources: local property taxes and state dollars provided by the Colorado General Assembly. In 2024, 11 school districts were funded entirely by local property taxes. That’s up from four in the previous fiscal year.

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