How Should the TUSD Governing Board Measure the CFO's Performance?

Financial Sustainability, Budget Accuracy, Internal Controls, and Management Accountability Must Be Part of the Evaluation

John C. Blackshire, Jr. The Accountware Group | October 16, 2026

The Tucson Unified School District (TUSD) is facing significant financial challenges that raise an important question about executive management accountability:

How should the Governing Board determine whether the District's Chief Financial Officer (CFO) is effectively managing its financial responsibilities?

TUSD manages hundreds of millions of dollars in public resources, operates a large network of schools, and employs thousands of teachers, administrators, and support personnel.

The District's financial management responsibilities are therefore comparable in complexity to those of many substantial business organizations.

Yet financial accountability in a school district is often evaluated differently from financial accountability in the corporate world.

A CFO may be judged primarily on whether annual budgets are prepared, financial reports are submitted, and expenditures comply with legal spending limits.

Those activities are necessary, but they are not sufficient.

An effective CFO must do more than report what happened financially. The CFO must help management anticipate what is going to happen and recommend actions to prevent financial deterioration.

This distinction is particularly important at TUSD.

The District's five years of Arizona Department of Education (ADE) budget reports, its FY2026 Annual Financial Report, and the Arizona Auditor General's financial-risk assessment raise substantial questions about financial planning, budget forecasting, operating sustainability, and the management of financial risks.

The Governing Board should respond by establishing a comprehensive set of measurable CFO performance expectations.

1. TUSD's Financial Condition Makes CFO Performance Measurement Essential

The Arizona Auditor General's January 2026 financial-risk assessment identified TUSD among Arizona's highest-financial-risk school districts.

The assessment examined six indicators:

1. Declining Weighted Student Count.

2. Operating budget-limit reserves.

3. Capital budget-limit reserves.

4. General Fund operating margin.

5. General Fund changes in fund balance.

6. Capital monies redirected to operations.

These indicators concern financial sustainability, not simply accounting compliance.

TUSD's FY2026 Annual Financial Report also presented troubling results.

These figures should be understood in their proper accounting context. The excess of expenditures over revenues before transfers does not necessarily equal the recurring structural deficit, and M&O fund balance is not the same as available cash.

Nevertheless, the results demonstrate significant financial pressure.

The five ADE budget reports also show that TUSD's unused M&O budget authority carried forward declined from approximately $38.18 million in FY2024 to $7.98 million in FY2027.

This is a reduction of approximately 79%.

Budget carryforward is not cash or accumulated operating profit. It represents unused statutory expenditure authority.

However, the reduction is another indication of declining budget flexibility.

These financial developments raise a fundamental management question:

Was the District's financial leadership providing sufficiently accurate forecasts, timely warnings, and effective corrective-action recommendations as the financial risks increased?

That is precisely the kind of question a CFO performance evaluation should answer.

2. Financial Sustainability Should Be the CFO's Primary Performance Objective

The CFO should be responsible for providing the Superintendent and Governing Board with reliable financial information and actionable recommendations to maintain sustainable operations.

The Board should monitor several financial sustainability measures.

The CFO should provide a multiyear financial recovery plan with measurable annual milestones.

The plan should identify the recurring expenditure reductions or recurring revenue improvements necessary to restore sustainable operations.

It should also explain the financial consequences if enrollment declines faster than projected.

The Governing Board should not evaluate the CFO solely on whether the District remains within its statutory expenditure limitations.

A district can comply with budget expenditure limits while continuing to experience serious operating deficits and deteriorating financial reserves.

The more meaningful measure is whether management is restoring long-term financial sustainability.

3. Budget Forecast Accuracy Must Become a Major Performance Measure

One of the most important CFO responsibilities is forecasting.

TUSD's enrollment has declined for several years, placing pressure on the revenue generated through Arizona's school funding formulas.

The District's FY2027 budget planning reportedly incorporated an approximately 2% decline in Weighted Student Count.

However, preliminary information presented in October 2026 indicated a decline closer to 5.4%.

The difference is substantial.

The CFO should be responsible for ensuring that the financial implications of enrollment assumptions are accurately calculated and communicated.

The Governing Board should measure:

• Revenue forecast accuracy.

• Expenditure forecast accuracy.

• ADM and Weighted Student Count forecast accuracy.

• Accuracy of state funding calculations.

• Timeliness of forecast revisions.

• Quality of optimistic, expected, and adverse financial scenarios.

• Accuracy of projected year-end fund balances.

The Board could establish initial targets such as revenue and expenditure forecast variances within 2%, with exceptions documented for material changes outside management's control.

Such targets would be management objectives, not requirements imposed by Arizona law.

The District should also maintain an 18-to-24-month rolling financial forecast and a five-year financial outlook.

Forecasting should not be treated as a once-a-year budget exercise.

It should be an ongoing management control.

4. The FY2027 ADE Revenue Control Limit Difference Requires Explanation

The FY2027 ADE Expenditure Budget Report identifies an important discrepancy.

• District-reported Revenue Control Limit: Approximately $294.82 million.

• ADE-calculated Revenue Control Limit: Approximately $277.90 million.

• Difference: Approximately $16.93 million.

This discrepancy does not, by itself, establish that the District overstated revenue or violated accounting requirements.

Differences may result from reporting dates, updated student counts, funding adjustments, or other calculation issues.

However, the amount is significant enough to require a documented reconciliation.

The Governing Board should ask:

• When did management become aware of the difference?

• What caused it?

• Did it affect the assumptions used in preparing the FY2027 budget?

• What changes were made after ADE's calculation became available?

A CFO performance framework should require material funding discrepancies to be investigated, reconciled, and communicated promptly.

The objective is not to avoid all forecast differences. It is to identify, explain, and respond to them before they create larger financial problems.

5. Cash Management and Liquidity Should Be Measured Monthly

Financial sustainability also requires effective cash management.

The CFO should maintain a rolling cash-flow forecast showing projected receipts, expenditures, payroll obligations, debt payments, and available liquidity.

For TUSD, I recommend an 18-month cash-flow model updated monthly.

The Governing Board should monitor:

The CFO should provide early warning if the District is projected to fall below its minimum operating liquidity requirements.

It is essential to distinguish cash balances, fund balances, and statutory budget authority. These measures are related but are not interchangeable.

6. Financial Reporting Should Be Evaluated for Accuracy, Not Just Timeliness

Preparing financial statements and submitting regulatory reports are core CFO responsibilities.

Arizona's Uniform System of Financial Records establishes accounting and financial reporting requirements for school districts.

However, submitting reports on time is only one element of effective financial management.

The Board should evaluate the CFO on:

• Timely completion of monthly financial statements.

• Accuracy of financial information.

• Reconciliation of significant accounts.

• Timely submission of ADE reports.

• Compliance with the Uniform System of Financial Records.

• Number and significance of audit adjustments.

• Correction of material reporting errors.

• Quality of financial explanations provided to the Governing Board.

The CFO should ensure that financial reports are understandable to Board members who may not have professional accounting backgrounds.

A financial presentation should clearly identify operating results, changes in fund balances, liquidity, budget variances, significant risks, and required management actions.

The purpose of financial reporting is to support effective governance and management decisions, not simply to satisfy filing requirements.

7. Internal Controls and Audit Committee Support Are CFO Responsibilities

The CFO is a key executive responsible for the design, implementation, and operation of financial internal controls.

Under the COSO Internal Control Framework, management is responsible for establishing effective controls addressing financial reporting, operational objectives, and compliance.

The CFO should be evaluated on whether the District maintains effective controls over:

• Cash receipts and disbursements.

• Purchasing and accounts payable.

• Payroll and employee compensation.

• Budget monitoring.

• Financial reporting and account reconciliations.

• Grants and restricted funding.

• Capital expenditures.

• Fraud prevention and detection.

• Segregation of duties.

• Corrective action for audit findings.

The Governing Board should also examine how effectively the CFO supports the Audit Committee.

A functioning Audit Committee should receive timely financial information, significant audit findings, risk assessments, and management corrective-action plans within the responsibilities established by its charter.

The CFO should not wait for Audit Committee members to discover significant financial problems independently.

Management should proactively bring material issues to the committee and Governing Board.

The Board should establish a financial-reporting calendar identifying which reports require management certification, Audit Committee review, and Governing Board consideration.

These responsibilities should be consistent with Arizona law and the District's governing documents.

8. The CFO Must Provide Financial Analysis of School Operations

TUSD's financial challenges cannot be resolved through accounting adjustments alone.

The District must understand the financial consequences of enrollment changes, staffing levels, administrative expenditures, transportation costs, and school facility utilization.

The CFO should provide detailed financial analysis to support those decisions.

Important measures include:

The CFO should prepare a five-year financial analysis for significant school closures, consolidations, or grade reconfigurations.

The analysis should include recurring savings, one-time implementation costs, transportation changes, staffing consequences, and facility maintenance requirements.

Financial considerations should inform these decisions without replacing educational, accessibility, and community considerations.

A successful CFO provides the financial information necessary for the Superintendent and Board to make informed decisions.

9. A Proposed CFO Performance Evaluation Framework

I recommend that TUSD adopt a formal CFO performance scorecard with six categories.

These percentages are suggested management priorities, not existing TUSD policy.

The CFO ordinarily reports through the Superintendent. Accordingly, the Superintendent should be responsible for the formal employee evaluation, with the Governing Board establishing the financial performance expectations and reviewing results relevant to its oversight duties.

The Board should also distinguish between recommendations made by the CFO and decisions made by the Superintendent or Governing Board.

A CFO should be accountable for producing accurate analysis and communicating risks, but should not be held solely responsible for decisions outside the position's authority.

10. The Board Needs a Quarterly CFO Performance Dashboard

The Governing Board should receive a concise quarterly dashboard covering 12 key financial management indicators.

Each indicator should include the approved target, actual results, historical trend, management explanation, and corrective-action timetable.

The dashboard should be made available to the public, subject to applicable confidentiality requirements.

The objective is to establish a consistent, transparent process for monitoring financial management performance.

11. The Difference Between Accounting and Financial Leadership

There is a fundamental distinction between accounting and financial leadership.

Accounting records and reports financial transactions.

Financial leadership uses that information to anticipate risks, evaluate alternatives, recommend corrective action, and support sustainable operations.

Both are essential.

But the CFO of a school district facing declining enrollment and operating deficits must provide more than accounting information.

Consider several examples.

• Preparing an annual budget is an activity. Developing a sustainable multiyear financial plan is a management result.

• Submitting the Annual Financial Report is an activity. Ensuring that the Board understands the District's financial condition and significant risks is a management responsibility.

• Calculating enrollment-related revenue is an activity. Identifying the financial consequences of enrollment declines and recommending expenditure adjustments is financial leadership.

• Preparing a cash-flow report is an activity. Anticipating cash shortages and recommending preventive action is financial management.

• Developing an audit corrective-action plan is an activity. Demonstrating that internal-control deficiencies have been corrected is a performance outcome.

These distinctions should be central to the CFO's evaluation.

12. Questions the Governing Board Should Require Management to Answer

Given TUSD's financial condition, I believe the Governing Board should require documented responses to several questions.

First: What is the District's projected recurring operating deficit for FY2027 and FY2028?

Second: What is the timetable for eliminating the negative M&O fund balance?

Third: How accurately did management forecast student enrollment and related revenues during the previous five fiscal years?

Fourth: What explains the approximately $16.93 million difference between TUSD's FY2027 Revenue Control Limit calculation and ADE's calculation?

Fifth: What is the projected monthly cash position over the next 18 months?

Sixth: What recurring expenditure reductions have been implemented, and how much verified savings have they produced?

Seventh: What is the financial impact of the District's school-reconfiguration alternatives?

Eighth: What material financial risks and internal-control deficiencies remain unresolved?

Ninth: What processes ensure that the Governing Board and Audit Committee receive significant financial information before critical decisions or regulatory deadlines?

These are reasonable questions for the financial leadership of a large public institution.

Conclusion: TUSD Needs Financial Leadership Measured by Results

The financial management of Tucson Unified School District should be evaluated using the same fundamental principles applied to other large, complex organizations.

Management must establish realistic financial objectives, measure results, identify risks, explain significant variances, and implement corrective action.

TUSD's declining enrollment, negative M&O fund balance, reduced budget flexibility, and financial-risk classification make these responsibilities especially important.

The CFO should be expected to provide accurate accounting records and timely financial reports.

But those are minimum professional expectations.

The broader responsibility is to help the Superintendent and Governing Board understand the District's financial trajectory and make informed decisions before financial problems become more difficult to correct.

The central measure of an effective CFO is not how many financial reports are prepared. It is whether the District's financial leadership provides reliable forecasts, early warnings, effective controls, and credible recommendations that support sustainable operations.

The Governing Board should establish those expectations formally and require management to report progress against them throughout the year.

TUSD's students, employees, taxpayers, and community deserve financial management that is transparent, forward-looking, and accountable for measurable results.

Sources and Further Reading

1. Arizona Auditor General, Tucson Unified School District Financial Risk Analysis.

2. Arizona Auditor General, Uniform System of Financial Records for Arizona School Districts.

3. Arizona Department of Education, TUSD FY2023–FY2027 BUDG75 and BUDG25 Budget Reports.

4. Tucson Unified School District, FY2026 Annual Financial Report.

5. COSO, Internal Control—Integrated Framework (2013).

6. The Accountware Group, TUSD's Budget Tells a Sad Story.

7. The Accountware Group, How Should the TUSD Governing Board Measure the Superintendent's Performance?.