WAC 392-123-121

(1) At any time during the year, the superintendent of public instruction may require districts to submit monthly financial statements, budget status reports, and other financial information to determine if the adopted budget is in compliance with applicable laws and regulations. This includes, but is not limited to, assessment of:

(a) Whether the district budget is balanced after adjusting the estimated fund balance at the beginning of the budgeted fiscal year to the actual beginning fund balance;

(b) Whether the district budget is balanced after adjusting for actual enrollment; and

(c) Whether the district budget is balanced after adjusting for changes in contracts or other significant expenditure assumptions.

(2) If the superintendent of public instruction determines that the financial information provided by the district indicates that the district budget is not balanced and will either end in a negative position in any fund or will require budgeting receivables from a subsequent period to be in balance, the superintendent will provide written notice to the superintendent of the school district, the board president of the school district, and the superintendent of the appropriate educational service district. This notice will summarize:

(a) The condition identified in the assessment;

(b) The cause identified that led to the condition identified; and

(c) The date which the school board must submit a revised budget to the educational service district and the office of the superintendent of public instruction for review and approval; and

(d) The date which the school board must submit a two-year financial plan.

(3) If the district submits a revised budget for review that requires the use of receivables collectible in future years to balance the budget, the superintendent will only grant permission in writing with specific binding conditions designed to improve the district's financial health.

(4) If the district:

(a) Does not submit a revised budget; or

(b) The financial plan submitted by the district demonstrates that the district will not have an adequate fund balance at the end of the plan period or will be financially insolvent in accordance with RCW 28A.315.025.

The office of the superintendent of public instruction will consult with the educational service district where the district is located and convene a financial oversight committee in accordance with RCW 28A.315.221.