Question: What is the next step if no budget is approved?

Response: If the budget review committee established pursuant to sections 42127.1 and 42127.2 and then the Superintendent of Public Instruction (SPI) disapproves the budget under 42127.3(b), the SPI will notify the district governing board in writing of the reason for the disapproval. For the remainder of the current fiscal year, the County Superintendent shall do the following as necessary:

· No later than November 30, the County Superintendent shall develop and adopt, in consultation with the SPI and governing board of the school district, a fiscal plan and budget that will govern the district and will allow the district to meet its financial obligations, both in the current fiscal year and with regard to the district’s multiyear financial commitments. The SPI may extend that date the Governing Board of the school district shall govern the operatioon of the district of the current fiscal year in accordance with that accepted budget,(EC 42127.3(b)(1).

· Cancel purchase orders, prohibit the issuance of nonsalary warrants, and otherwise stay or rescind any action that is inconsistent with the budget adopted pursuant to the above paragraph, with a written justification for any excercise of authority under this paragraph sent to the district’s governing board. (EC 42127.3(b)(2).

· Monitor and review the operation of the school district (EC 42127.3(b)(3).

· Determine the need for additional staff and may employ, subject to approval by the SPI, short-term analytical assistance or expertise to validate financial information if the district staff does not have the expertise or staff (EC 42127.3(b)(4).

· Require the school district to encumber all contracts and other obligations, to prepare appropriate cash-flow analyses and monthly or quarterly budget revisions, and to appropriately record all receivables and payables (EC 42127.3(b)(5).

· Determine whether there are any financial problem areas and may employ, subject to approval by the SPI, a certified public accounting firm to investigate financial problem areas (EC 42127.3 (b)(6).

· Withhold compensation of the members of the governing board and the district superintendent for failure to provide requested financial information (EC 42127.3(b) (7).

If an agreement is reached between the governing board of the school district and the County Superintendent, and the school district revises its budget to comply with this agreement, the County Superintendent of Schools shall approve the district budget and the budget review committee selection, or its review of the budget, shall be canceled (EC 42127.3 (c).