Failure to meet financial targets leads to dissolution petition for Prescott Schools
By Dan Thesman on Wednesday, December 17th, 2025 in Columbia Basin News More Top Stories
PRESCOTT – The Prescott School District (PSD) has faced a severe and prolonged financial crisis, culminating in a recommendation for its dissolution. PSD first signed a binding conditions agreement with the Washington Office of the Superintendent of Public Instruction (OSPI) in March 2024, stemming from issues like a negative 2022-23 general fund balance of $6,739.58, lack of financial controls, and delayed payments.
According to OSPI Chief Financial Officer T.J. Kelly, initial requirements focused on achieving a positive fund balance, but due to ongoing struggles, the PSD Financial Oversight Committee (FOC), which is convened under OSPI’s authority, recommended enhanced financial oversight in June 2025.
“Enhanced financial oversight is the most restrictive phase of state oversight for districts that are experiencing financial difficulty,” Kelly explained.
This summer, the FOC imposed stricter requirements, including creating staffing and debt elimination plans to resolve all debts by the end of the 2026-27 school year and demonstrating long-term stability with positive fund balances by 2027-28.
However, OSPI claims PSD failed to develop an acceptable financial recovery plan. In October 2025, the Financial Oversight Committee deemed the district insolvent due to its inability to create a plan that could eliminate all debts, meet financial targets, and ensure adequate cash flow. Consequently, the committee recommended that the Superintendent submit a petition for the district’s dissolution.
To reverse this outcome, the committee advised PSD to seek approximately $1 million in new funding sources and implement budget reductions for the 2026-27 school year. The specifics of these reductions would be determined after the legislative session concludes in March 2026. The dissolution petition would be withdrawn only if PSD successfully secures the necessary resources and presents a viable financial plan demonstrating its capacity for long-term stability and debt resolution.
The following individuals were appointed as members of the FOC on May 13, 2025: T.J. Kelly, Chief Financial Officer, OSPI; Shawn Lewis, School Apportionment and Financial Services Director, OSPI; Julie Rupe, School Finance Director, ESD 123 (added June 13, 2025); Michael Paquette, Assistant Superintendent, ESD 123 (nonvoting).
