Financial risk has spiked in Arizona school districts, with nine now in the 'highest risk' category compared to only two last year, according to a new State Auditor General report.
There are significantly more school districts financially at risk in Arizona this year compared to last year. On Jan. 27, another Arizona school district voted to close a school— this time, in Gilbert.
"It's politically difficult because parents are attached to their school," State Superintendent Tom Horne said. He added that closures are often the right move financially for districts. "If it’s not 100% filled, it’s inefficient and it’s wasting money."School finances are in the spotlight following a report from the State Auditor General, which found a substantial increase this year in the number of schools at high risk. Last year, only two districts statewide fit that category. This year, nine districts are in the highest risk category.In Maricopa County, the Isaac and Wilson elementary school districts are among those listed in the highest risk category. Nine other districts are described as approaching the highest risk, including the Balsz Elementary, Fountain Hills Unified, and Scottsdale Unified school districts.When asked what has changed in a single year, Horne said, "I have no clue, I’m sorry. I just don’t know why it would change. It might just be random change."One of the primary factors cited in the report is the weighted student count. Enrollment is decreasing in many schools as the Empowerment Scholarship Account program—or vouchers—hit a record 100,000 students enrolled.Horne, however, disagreed that the voucher program is the cause. "It’s definitely not ESA because the total amount of money doesn't matter; it's the amount of money per pupil," Horne said. "If it's properly managed—now, if you lose pupils and don’t bother to cut back on your expenses, yes, you're going to have problems."Officials with Scottsdale Unified said they take the findings seriously. The district has already closed two schools and signaled that two more closures may be coming.In a statement, the district said: "Scottsdale Unified takes the Auditor General’s analysis seriously and has already begun taking action to address the identified financial risks. The Governing Board has approved the closure of two schools for 2026–27, will consider further budget reduction decisions on February 10, and has signaled two additional closures and repurposing for 2027–28 as part of a multi-year financial stabilization plan. These steps, while difficult, are intentional and necessary to align facilities, staffing, and resources with current enrollment and revenue realities. The district is committed to making thoughtful, transparent decisions now to ensure long-term financial sustainability and protect classroom resources for years to come."Wilson Elementary School District also released the following statement: "Wilson Elementary School District is aware of the Auditor General’s financial risk analysis and current risk designation. Wilson is actively working with state agencies to address the items identified. The district has taken corrective steps to strengthen internal processes and oversight, and there is no evidence of financial instability or misuse of funds. Wilson remains committed to transparency, accountability, and full compliance, and will continue working collaboratively to move out of the high-risk classification."A link to the full audit is available here for parents to check their specific school district's financial risk level.
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