Preliminary Ratings. The Preliminary Rating is either Meets Target or Pending Further Analysis. The Meets rating means that the information contained in the financials under review indicates that the school is meeting or exceeding the target for the standard in question. The Pending rating means that the school is not meeting the target based on the financials under review. A school that misses the target on any one measure may or may not be at financial risk. It may be in immediate distress, financially trending negatively, both or neither. There are two types of additional information that the Commission may need before assigning a Final Rating. The first is more current information. When conducting a year-end evaluation of a school’s financials, the Commission will be reviewing audit numbers that are typically at least four months old by the time the audit has been finalized. The Commission’s further analysis will often include review of current, unaudited, financials. The second is more detailed information about the school’s financial position to assess the reasons behind the failure to meet the target. For example, a school might make a strategic long-term financial decision that results in it missing a target in the near term. The Commission’s follow-up will consider the more current and more detailed information to determine whether the Preliminary Rating is still applicable and the degree to which it is, in fact, an indication of financial risk or distress. The Final Rating is Meets Target, Does Not Meet Target, or Falls Far Below Target. A Meets rating indicates sound financial viability based on the overall financial record. Either the school has already met the target based on the financials under review, or previous financial concerns that produced a preliminary Pending rating have been adequately remedied based on more current financial data or addressed adequately based on additional information such that the Commission concludes that performance against the target indicates sound financial viability.
