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1. When a district fails to submit or update a five-year forecast as required by section 5705.391 of
the Revised Code or by Administrative Rule 3301-92-04.
2. When there is a potential current year deficit with no acceptable plan in place to avoid the
projected deficit.
3. When a district notified under division (B) of section 5705.391 of the Revised Code fails to
submit an acceptable plan to address a potential future year deficit within the timeframe allowed.
4. Whenever the Department discovers any other “fiscal practices or conditions” that could lead to a
declaration of Fiscal Watch or Emergency through the examination of a school district’s five-year
forecast required under division (B) of section 5705.301 of the Revised Code.
5. When the Auditor of State certifies a deficit between 2% and 8% of prior year general fund
revenue and elects not to place the district in Fiscal Watch, the district must be placed in Fiscal
Caution as required by section 3316.031(B)(3) of the Revised Code.
6. When the Auditor of State declares that a school district’s financial records are unauditable.
7. When the Auditor of State reports that a district has not complied with section 5705.412 of the
Revised Code by attaching a signed certificate to an appropriation measure, qualifying contract or
salary schedule.
8. When the Auditor of State identifies significant deficiencies, material weaknesses, direct and
material legal noncompliance or management letter comments which, in the opinion of the Auditor,
the aggregate effect of all such reported issues has an significant effect on the financial condition of
the district.
Consultation with School District Board of Education
Section 3316.031(B) of the Revised Code requires the Department to consult with the local board of
education before declaring a district to be in Fiscal Caution. The written and/or verbal
communication between the Department and/or the Auditor of State and the school district will
constitute the required consultation with the local board of education. Typically such communication
is with the district superintendent and treasurer but may involve the board president. If the State
Superintendent decides to place the district in Fiscal Caution, the local board of education shall
receive written notice at least 10 business days prior to the effective date of the declaration. The
written notice will be sent to the board president, district superintendent, and treasurer and shall
include but not be limited to an explanation of the circumstances that led to the decision and if there
are any steps the school district could take to avoid the declaration.
What does it mean to be in Fiscal Caution?
State law requires districts to provide written proposals for discontinuing or correcting the practices
and conditions that led to the declaration of Fiscal Caution. Districts will be given approximately 60
days to provide a written proposal. At the request of the district, the Department may grant the