This bill introduces new requirements for school district accounting, budgeting, and reporting in Washington State. Starting in the 2027-28 school year, school districts with general fund balances below specified thresholds will be placed under formal financial monitoring for one year, with the possibility of extensions if they continue to fall short. The thresholds are set at six percent of the prior year's state apportionment for districts with 2,000 or more average annual full-time equivalent students, and no less than eight percent for those with fewer than 2,000 students. The Office of the Superintendent of Public Instruction (OSPI) is tasked with calculating these thresholds, providing technical assistance to monitored districts, and reporting their financial health indicators.

Additionally, beginning in the 2028-29 school year, districts under formal financial monitoring must submit monthly financial data to the OSPI, including expenditures, revenue, cash balances, interfund loan activity, and any debt transactions. This new reporting requirement aims to enhance oversight and support for school districts struggling with financial management. The OSPI is also authorized to adopt rules to implement these new sections of the law.