This bill adds new sections to chapter 28A.505 RCW creating minimum general fund balance requirements for school districts and a monthly financial reporting requirement to the Office of the Superintendent of Public Instruction (OSPI). Beginning in the 2030-31 school year districts with 2,000 or more average annual full-time equivalent students must maintain a restricted general fund balance equal to at least 6% of the prior year’s state apportionment, and districts with fewer than 2,000 FTE must maintain at least 8% of the prior year’s state apportionment. OSPI must calculate each district’s minimum restricted balance using total prior year apportionment as calculated no later than April 30th and must adopt rules to implement both new sections. The restricted balance may only be used for specified purposes: unanticipated enrollment changes over 2.5%, temporary cash flow needs within the school year, emergencies or preservation of life/health/safety, and one-time expenses preapproved by OSPI. A district may temporarily spend below the minimum only after a board resolution stating the reason and amount and submission of an OSPI‑approved plan to restore the balance within 12 months after the end of the subsequent school year; a district generally may not be approved to do this two years in a row except for emergencies. If a district fails to restore the balance per the approved plan, OSPI must redirect monthly apportionment payments in 12 equal installments to restore the minimum. OSPI must include failure to replenish the minimum balance in a district’s financial health indicators. The bill also requires monthly financial reporting to OSPI beginning in the 2028-29 school year: districts must submit, by the last day of the subsequent calendar month, at minimum monthly expenditures, monthly revenue, end‑of‑month cash balance, interfund loan activity, and other debt or borrowing transactions. If required monthly data are not submitted within 45 days after the reporting month, OSPI may withhold the subsequent apportionment payment until the data are provided. The act makes procedural and fiscal-management changes and creates enforcement tools (withholding and redirection of apportionment funds) for noncompliance. Several details are not provided in the extracted text: formal definitions (for example, how average annual FTE or “one-time expenses” are calculated), the exact RCW subsection numbers for the new sections, the detailed methodology OSPI will use for calculating total apportionment beyond the April 30th timing, and the specific criteria or procedures OSPI will use to approve restoration plans or preapprove one-time expenses.

If enacted, school districts will need to hold a dedicated minimum general fund balance starting in the 2030–31 school year (6% of prior year state apportionment for districts with 2,000+ FTE, 8% for smaller districts) and begin sending detailed monthly financial reports to OSPI starting in 2028–29. District boards will have limited flexibility to tap those reserves only for specified short-term cash needs, enrollment losses beyond 2.5%, emergencies, or preapproved one-time expenses, and any use below the minimum requires a board resolution and an OSPI‑approved restoration plan to rebuild the balance within about a year. Districts that fail to file timely monthly reports risk OSPI withholding their next apportionment payment, and districts that don’t restore required reserves as approved can have a portion of future apportionment redirected monthly in 12 equal installments until the shortfall is repaid. The most affected parties are school district finance offices and boards, which will likely need to increase reserves, change spending plans (limiting ongoing salary/benefit commitments from those restricted dollars), and add staff time to meet monthly reporting and plan requirements; OSPI will take on additional calculation, rulemaking, monitoring, and enforcement duties. It’s unclear from the text how key terms and calculations (for example, how FTE and total apportionment are defined or how OSPI will evaluate restoration plans and preapprove one‑time expenses) will be applied in practice, which could affect how large the required reserves are and how strictly the restrictions are enforced.