Stockton Unified School District has been removed from California's high-risk designation nearly three years after the state cited serious fiscal and compliance problems, district officials announced.
In a July 2 letter to the Stockton Unified community, Superintendent Michelle Rodriguez said the California Department of Education notified the district on June 30 that it had satisfied the requirements to end the designation.
Stockton Unified was placed on high-risk status in October 2023 after the state cited fiscal and compliance issues, including findings in the Assembly Bill 139 Extraordinary Audit Report issued in February 2023. The report concluded there was sufficient evidence that fraud, misappropriation of funds or assets, or other illegal fiscal practices may have occurred.
The state also cited findings in Stockton Unified's 2021-22 annual independent audit and concerns raised by the San Joaquin County Office of Education during its review of the district's 2023-24 budget. The audit identified a material weakness in internal controls for financial statement reporting, a material weakness in internal control over the use of federal stimulus funds, and deficiencies in compliance with federal and state program requirements.
At the time, the district was projected to have at least a $30 million deficit by 2024, had been warned that it was at risk of insolvency, and was at the center of a multi-agency investigation involving the FBI and the U.S. Attorney's Office.
The designation subjected Stockton Unified to increased oversight from the California Department of Education and the San Joaquin County Office of Education. To be removed from the high-risk designation, the district was required to meet seven conditions, including resolving audit findings, eliminating its "going concern" designation, hiring a permanent chief business officer, submitting annual independent audits without material findings, meeting state and federal reporting requirements, demonstrating sound fiscal management, and cooperating with ongoing fiscal monitoring until completing two consecutive reviews without material findings.
The removal ends nearly three years of heightened state oversight after the district addressed longstanding fiscal, audit and compliance deficiencies.
According to Rodriguez, the district resolved all independent audit findings, eliminated the district's "going concern" designation, completed all required federal stimulus reporting, and demonstrated sound fiscal management through ongoing fiscal oversight, including annual audits and federal program monitoring reviews.
Rodriguez said Stockton Unified completed its first on-time independent audit in seven years in December 2024 and submitted another on time in December 2025. The district also reduced the number of federal program monitoring findings from 27 in 2024 to none during its most recent review this year.
"This milestone represents far more than the removal of a state designation," Rodriguez said. "It reflects the restoration of trust in our organization, the strength of our systems and our collective commitment to continuous improvement. Most importantly, it positions us to devote even greater focus to our true purpose, providing every student with a world-class education and ensuring they are prepared for college, career and life."
Board President Sofia Colón called the designation's removal "a stronger foundation for the future of every student we serve."
"This accomplishment reflects the dedication of our employees, the leadership of our administration and the steadfast commitment of our board of education to responsible governance and student success," Colón said.
Stockton Unified serves 32,712 students, employs 5,097 staff members and operates 55 schools, including 41 K-8 schools, 11 high schools and three alternative schools.
Record reporter Hannah Workman covers news in Stockton and San Joaquin County. She can be reached at hworkman@recordnet.com or on Twitter @byhannahworkman. Support local news, subscribe to The Stockton Record at https://www.recordnet.com/subscribenow.
This article originally appeared on The Record: Stockton Unified removed from California high-risk designation
