FCMAT warns of continued fiscal risk; urges faster implementation of stabilization plans

The Amador County Unified School District and the Amador County Office of Education heard a fiscal health assessment from the state Fiscal Crisis & Management Assistance Team (FCMAT) on July 1, after the district recorded three consecutive “qualified” interim budget certifications.

FCMAT analysts told the boards the district’s fiscal “risk score” was in a high band — near 50% — and the county office’s score was about 41%, and urged trustees and staff to accelerate implementation of previously approved stabilization measures. "We are not here to assign blame or identify fault," said Rosslyn Manantala Smith, an FCMAT intervention specialist. "We are here to highlight areas of concern that will hopefully help you guide your course in getting to a better place fiscally."

Why it matters: A high risk score does not immediately remove local control, but FCMAT and state law link repeated qualified certifications and ongoing deficit spending to escalating oversight. If a district exhausts reserves and cannot meet payroll, state intervention and a costly state loan are possible, FCMAT said.

What FCMAT found - Trigger and score: FCMAT said the district’s third consecutive qualified certification for fiscal year 2024–25 required the FHRA review. The district-level score was reported just under 50%, higher than a prior 2019 FCMAT review. FCMAT said the county office score was roughly 41% and that some questions on the county tool are marked “not applicable” because of the single‑county governance structure. - Key drivers: FCMAT highlighted five main contributors to fiscal risk: (1) delays in reducing staffing previously paid by one‑time COVID‑era funds, (2) stalled consolidation plans and delayed expected savings, (3) higher-than-expected claims under the district’s self‑insured health plan, (4) rising special‑education contractor and nonpublic‑school costs tied to hard‑to‑fill positions, and (5) a long‑term decline in enrollment that reduces ongoing local revenue. - Collective bargaining and disclosure: Because personnel costs are the majority of district budgets, FCMAT flagged shortcomings in pre‑settlement analyses and in providing required public disclosures to the district’s oversight agency before board action on tentative agreements. "When districts provide an analysis up front about the multi‑year impact of tentative agreements, boards can make more informed decisions," said Carolyn Benno, FCMAT chief analyst. - Budget development and monitoring: FCMAT recommended clearer written budget assumptions, a formal budget calendar, stronger monitoring of restricted grant funds and more frequent alignment of budget projections with actuals while the district remains in fiscal distress. - Cash and debt: FCMAT drew attention to future debt obligations tied to certificates of participation (COPs) and warned that planned savings assumed in earlier consolidation proposals are not yet realized; without those savings, COP payments will rely on the unrestricted general fund and further strain reserves.

Board and staff response Superintendent Jared Critchfield and Chief Business Officer Robert Norton participated in the public Q&A with FCMAT. Board members asked about the meaning of the FHRA score, the extent to which recent corrective actions (for example, adjustments to staffing and administrative ratios and corrective audit responses) would lower risk, and timelines for implementing the fiscal stabilization plan that the district approved earlier this year.

Actions and next steps recommended by FCMAT FCMAT advised the district and county office to: (1) continue implementing and updating the board‑approved fiscal stabilization plan; (2) work closely with the California Department of Education (CDE) and disclose bargaining impacts to CDE and the public as required; (3) phase out the district’s self‑insured health program and continue to reduce unanticipated claims exposure; (4) decide whether and how to proceed with operational consolidation (the district has that item under discussion); and (5) prioritize a small set of high‑impact changes from the FHRA for immediate attention. FCMAT said it can re‑run the FHRA later to measure progress.

What FCMAT said about state intervention FCMAT warned that ongoing deficit spending and depletion of cash could lead to stronger state oversight, a required state loan and possible placement of a state administrator — an outcome FCMAT representatives described as costly and disruptive. "One of the most effective ways to avoid fiscal instability and insolvency is to have well‑informed and trained leadership both at the board level and at the administrative level," Smith said.

Where to get more detail FCMAT provided a written FHRA report to the board and district staff; FCMAT officials said the report includes appendices comparing the district’s results to the 2019 review and lists the specific tool questions where the district most needs improvement.

Endnote FCMAT staff said they will continue to coordinate with the district and CDE; trustees asked staff to bring regular updates on the stabilization plan and the status of the actions FCMAT identified.