Rhode Island School Districts

Local School District Deficits

Rhode Island General Laws Section 16-2-9 requires that:

• The school committee of each school district shall be responsible for maintaining a school budget that does not result in a debt. (16-2-9(d));
• In the event that any obligation, encumbrance, or expenditure by a superintendent of schools or a school committee is in excess of the amount budgeted, or that any revenue is less than the amount budgeted, the school committee shall prepare and submit a corrective action plan as follows: (16-2-9(f));
• Within five (5) working days of its discovery of potential or actual over expenditure or revenue deficiency;
• Submit to the town council president and such other person who by local charter or statute serves as the city or town's executive officer;
• A written statement of the amount of and cause for the over obligation or over expenditure or revenue deficiency;
• A written statement of the school committee's plan for corrective actions necessary to maintain a school budget that does not result in a debt; and
• Request approval of the plan from the Auditor General.

Please refer to the additional requirements of Rhode Island General Laws Section 45-12-22.1 through 45-12-22.7 which describe procedures to be followed by municipalities and local and regional school districts in monitoring their financial operations, reporting projected deficits, and developing corrective action plans.

Local School District Appropriation Deficiencies

Rhode Island General Laws Section 16-2-21.4 requires that:

• Whenever a city or town school committee determines that its budget is insufficient to comply with the provisions of the sections 16-2-21, 16-7-23, or 16-7-24 it must follow the steps required by section 16-2-21.4. This process may eventually result in a decision by the school committee to seek additional appropriations by bringing an action in the superior court.
• When the school committee brings an action in the superior court to increase appropriations, the chief executive officer of the municipality shall cause to have a financial and performance audit of the school department in compliance with generally accepted government auditing standards (as promulgated by the Comptroller General of the United States). 
• The audit shall be conducted by the Auditor General, the Bureau of Audits, or a certified public accounting firm qualified in performance audits. The Auditor General shall select the auditor if the audit is not directly performed by his or her office.

The results of the audit shall be made public upon completion and paid for by the school committee to the state or private certified public accounting firm. 

Regional School District Deficits

Rhode Island General Laws Section 16-3-11 requires that:
The school committee of each regional school district shall be responsible for maintaining a school budget that does not result in a debt. (16-3-11(e))

• In the event that any obligation, encumbrance, or expenditure by a superintendent of schools or a school committee is in excess of the amount budgeted, or that any revenue is less than the amount budgeted, the school committee shall prepare and submit a corrective action plan as follows: (16-3-11(e)(3))
• Within five (5) working days of its discovery of potential or actual over expenditure or revenue deficiency,
• Submit to the town council president and such other person who by local charter or statute serves as the city or town's executive officer;
• A written statement of the amount of and cause for the over obligation or over expenditure or revenue deficiency, and
• A written statement of the school committee's plan for corrective actions necessary to maintain a school budget that does not result in a debt.
• Request approval of the plan from the Auditor General.

Please refer to the additional requirements of Rhode Island General Laws Section 45-12-22.1 through 45-12-22.7 which describe procedures to be followed by municipalities and local and regional school districts in monitoring their financial operations, reporting projected deficits, and developing corrective action plans.

Regional School District Appropriation Deficiencies

Rhode Island General Laws Section 16-2-21.4 requires that:

• Whenever a regional school committee determines that its budget is insufficient to comply with the provisions of sections 16-2-21, 16-7-23, or 16-7-24 it must follow the steps required by section 16-2-21.4. This process may eventually result in a decision by the school committee to seek additional appropriations by bringing an action in the superior court.
• When the school committee brings an action in the superior court to increase appropriations, the chief elected officials from each of the member municipalities shall cause to have a financial and performance audit of the school department in compliance with generally accepted government auditing standards (as promulgated by the Comptroller General of the United States). 
• It shall be conducted by the Auditor General, the Bureau of Audits, or a certified public accounting firm qualified in performance audits. The Auditor General shall select the auditor if the audit is not directly performed by his or her office.

The results of the audit shall be made public upon completion, and paid for by the school committee, to the state or private certified public accounting firm.