Pennsylvania Code › Title 22 - EDUCATION › Part I - State Board of Education › Subpart A - Miscellaneous Provisions › Chapter 18 - FINANCIAL RECOVERY › Section 18.5 - Issuance of declaration under section 621-A(a)(2) of the School Code

Current through Register Vol. 54, No. 28, July 13, 2024
(a) Consistent with
				  section 621-A(a)(2)(i) of the School Code (24 P.S. §
											6-621-A(a)(2)(i)), the Secretary may consider
				  the following criteria when determining whether to issue a declaration that a
				  school district is in financial recovery status:
(1) The school district receives at least 85%
				  of its per pupil funding from the Commonwealth and collects less than 50% of
				  local taxes levied to fund the school district.
(2) The school district's unreserved fund
				  balance has declined for 3 consecutive years and is less than 5% of the school
				  district's annual expenditures. As used in this paragraph, a school district's
				  unreserved fund balance means the school district's unassigned fund
				  balance.
(3) The school district's
				  fixed costs are at least 30% of the school district's total annual
				  expenditures.
(4) The school
				  district's total outstanding debt is greater than the school district's total
				  annual expenditures.
(5) The
				  salaries of teachers or other employees of the school district are unpaid at
				  least 15 days after payment is due.
(6) The school district is subject to
				  withholding of its State appropriation under section 633 of the School Code
				  (24
				  P.S. §
												6-633).
(7) The school district is subject to
				  withholding of its State appropriation under section 785 of the School Code
				  (24
				  P.S. §
												7-785).
(8) The school district is subject to
				  withholding of its State appropriation under
				  53 Pa.C.S. §
												8283(c) (relating to
				  remedies).
(9) The school district
				  has defaulted on the payment of a debt due to a school district, intermediate
				  unit or charter school that remains unpaid on or after January 1 of the year
				  following the school year it was due and there is not a dispute regarding the
				  validity or amount of the claim.
(10) The school district's assigned and
				  unassigned total fund balance is less than zero in the school district's
				  general fund.
(11) The school
				  district's assigned and unassigned total fund balance in the school district's
				  general fund as a percentage of total expenditures is less than 3%.
(12) The school district experiences a
				  delinquent tax rate of more than 10%.
(13) The assessed valuation of taxable real
				  estate in the school district, as certified by the State Tax Equalization
				  Board, has not increased over the previous 5 years.
(14) An amount due a joint board of school
				  directors under a joint board agreement remains unpaid beyond the due date
				  specific in the joint board's articles of agreement.
(15) The school district has contracted a
				  loan not authorized by law.
(16)
				  The school district has accumulated and operated with a deficit equal to at
				  least 2% of the assessed valuation of the taxable real estate within the school
				  district for 2 successive school years.
(17) The school district experiences a
				  deficit of 3% or more for 3 consecutive school years resulting in a reduction
				  of unassigned fund balance each year.
(18) A new, merged or union school district
				  has been formed and one or more of the former school districts which compose
				  the merged or union school district was a distressed school district under
				  section 691 of the School Code (24 P.S. §
												6-691)
				  or a financial recovery school district under Article VI-A of the School Code
				  (24
				  P.S. §§
												6-601-A-6-693-A) at the time of the
				  formation of the new, merged or union school district.