Marysville School District’s financial condition jeopardizes future operations, audit finds

The Marysville School District’s ability to keep operating is in doubt, based on its declining financial condition, according to an audit by the Office of the Washington State Auditor.

The district serves about 9,700 students, and its finances have eroded rapidly over the past year. Auditors found the district’s current financial position “raises substantial doubt about its ability to continue as a going concern.”

A public school district has not been in a comparable situation since 2007, when the much-smaller Vader School District was dissolved after its financial condition declined and a maintenance and operation levy failed.

“This is the most alarming audit of a public school’s finances in 17 years,” said State Auditor Pat McCarthy. “Local leaders have a financial and a community responsibility to right their ship. The stakes are too high for Marysville and its children.”

One measure of a government’s financial health is the number of days of operating expenses it holds in its general fund, which is ideally 60 days or more. As of Aug. 31, 2023, the district maintained 18.6 days’ worth of operating expenditures, already a comparatively low figure. Auditors analyzed the district’s financial reports through June 2024, and found the district had more expenditures than funds available – for a measure of negative 11.6 days of operating expenses.

The audit was originally scheduled to review the district’s finances for the fiscal year ending in August 2023, but subsequent events involving the school’s financial condition led auditors to continue work into the current fiscal year.

Because the district had not been able to submit a balanced budget, the Office of Superintendent of Public Instruction placed it in binding conditions in August 2023, allowing the agency and the local educational service district to assist. The state agency subsequently convened a financial oversight committee, a higher level of intervention, to work with the school district.

The audit report was released today, immediately after a public work session held by the school district. The report can be found here: Marysville School District’s Financial Statements and Federal Single Audit Report.

Media questions: Assistant Director of Communications Adam Wilson, Adam.Wilson@sao.wa.gov, 564-999-0799