Financial Accounting and Reports

The board may decide to have the district’s money received and disbursed through the office of the county treasurer, or it may elect to have district money received by the county treasurer paid over to the treasurer of the district. The law requires the county treasurer to provide an itemized statement of account not later than the 10th day of each month.

Financial accounting

The law requires school district financial records to be kept in accordance with generally accepted principles of governmental accounting. Appropriate entries from the adopted budget are made in the records for the respective funds.

The board has the responsibility to oversee the district’s fiscal affairs. State law requires that the board receive a quarterly financial report for the general fund and on any other funds in accordance with the board’s request. More frequent reports can be requested so the board can fulfill its trustee responsibilities. The quarterly report must include several comparisons so the board can review the current state of revenues and expenditures. All financial and audit reports are public records.

Since 2010, the Public School Financial Transparency Act has required school districts to post financial information online in downloadable format and to link to CDE ’s website where additional district reports may be found. [C.R.S. § 22-44-301 et seq.]


The Local Government Audit Law requires the board of education to provide for an annual audit of the district’s financial statements for each fiscal year. [C.R.S. § 29-1-603.] The audit must be conducted in accordance with generally accepted auditing standards by a certified public accountant licensed to practice in Colorado.

The auditor must ensure that the school district is complying with the Financial Policies and Procedures Handbook adopted by the State Board of Education. The audit report shall contain a report of receipts and expenditures of each fund.

The audit report must be filed with the state auditor in accordance with the timeline set out in state law.

Creating debt

A board of education is authorized to borrow money on a short-term basis with repayment to be made within six months. [C.R.S. § 22-40-107.] Limits on the amount to be borrowed and interest rates are defined by statute.

The Colorado Constitution provides that a political subdivision (which includes a school district) cannot incur any multiple year fiscal obligations or contract a general obligation debt by loan in any form unless the debt is approved by the voters. Generally, debt is not created by an obligation that can be met out of current district revenues (within one year’s budget) or by an obligation that does not obligate payments out of future revenues. As interpreted by the courts, discretionary or contingent obligations in future years do not constitute debt.

Installment purchase

State law requires the district to submit any installment purchase or lease agreement to a vote of the people when the
repayment obligations in the agreement extend beyond one year. This same restriction applies to expenditures from the capital reserve fund for an installment purchase or lease agreement with an option to purchase for a period exceeding one year and not to exceed 20 years.

However, Colorado courts have held that the election requirement does not apply to these types of agreements, even though the terms may be greater than one year, if the district’s obligation to make payments under the agreement is subject to making an annual appropriation to pay those amounts. These are, in the courts’ view, discretionary or contingent obligations.

Bonded indebtedness

Bonded indebtedness may be incurred only (1) to acquire or purchase buildings or grounds; (2) to remodel or add to any school building; (3) to construct school buildings; (4) to equip or furnish buildings; (5) to improve school grounds; (6) to fund floating indebtedness; (7) to acquire, construct or improve a capital asset; or (8) to support charter school capital construction or the charter schools’ land and facilities needs. [C.R.S. § 22-42-101.] The proposition to create bonded indebtedness must be approved at an election, which can only be held in November each year.

The process of incurring bonded indebtedness is complex and will require the assistance of competent fiscal agents and bond counsel.