Colorado Auditor Dianne E. Ray

DALLAS - An increasing number of Colorado school districts are showing signs of fiscal stress, according to a recent report from State Auditor Dianne E. Ray.

Based on five financial benchmarks, 42% of school districts in the state, or 76 out of 178, fell short on at least one of the benchmarks over a three-year period ending in 2013, the auditor said. That represents a 58% increase over last year's report when 48 school districts missed at least one benchmark.

The benchmarks include debt burden, asset sufficiency, operating reserve, operating margin and change in fund balance.

The most commonly missed benchmark was the operating margin ratio, according to the report.

"The trend identifies a decline over the three-year period, which could result from a reduction of the operating margin due to deliberate spending down of fund balance to supplement operations or planned capital project expenditures that used reserves," the report said.

The rural Silverton 1 was the only district to miss three benchmarks, according to the report. It was also the first time a district had missed three.

Silverton's school district dipped into reserves in 2013 and again in 2014. It also increased debt by passing a mill levy override to remodel its historic school.

All 20 school districts that missed two or more benchmarks cited issues such as the spend down of fund balance due to reductions in state funding. Sixteen school districts reported that they have experienced the effects of the reductions in state school finance funding.

Twelve school districts indicated that they have experienced increases in the cost of maintenance, repairs, and construction in order to maintain or improve facilities.

Several school districts reported they had used fund balance over the three-year period in order to provide matching funds for Building Excellent Schools Today program grants that help school districts fund capital and facility maintenance projects. BEST has funded $1,087,524,508 in public school capital construction projects, from $2.48 billion in requests since the state program was created in 2008.

At least four school districts reported significant reductions in student enrollment resulting in reduced state funding.

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