Fiscal Tools

Indicators of Risk or Potential Insolvency

FCMAT has compiled lists of indicators of risk or potential insolvency based on more than 30 years of experience with local educational agencies (LEAs). Each item listed indicates a lack of function, commitment, or attention to one or more critical elements of an organization’s operations, which may eventually contribute to an LEA’s insolvency. The existence of any one of these indicators increases the risk of potential insolvency and the need for assistance from outside agencies. Lack of attention to these indicators will eventually lead to financial insolvency and loss of local control.

Identifying issues early is the key to maintaining fiscal health. Diligent multiyear planning will enable an LEA to better understand its financial objectives and to develop strategies to sustain a high level of fiscal efficiency and overall solvency. LEAs should discuss the indicators regularly and complete a Fiscal Health Risk Analysis (FHRA) annually to assess their fiscal health risk and progress over time.


The Fiscal Crisis and Management Assistance Team’s (FCMAT’s) primary mission is to help California’s local TK-14 educational agencies identify, prevent and resolve financial, operational and data management challenges by providing management assistance and professional learning opportunities.

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