An Audit Report on Certification of the Permanent School Fund's Bond Guarantee Program for Fiscal Year 2015
Report Number 16-014
The State Auditor's Office certifies that, for the fiscal year ended August 31, 2015, the amount of school district and charter district bonds guaranteed by the Permanent School Fund's (Fund) Bond Guarantee Program (Program) was within the limits applicable to the Program. In addition, the Fund had sufficient capacity of $4.4 billion to meet the State Board of Education's (Board) requirement to hold no less than 5 percent of the total guarantee capacity in reserve for the same time period.
As of August 31, 2015, the total principal of the 3,117 outstanding bond issues guaranteed by the Program was $64.0 billion. (See attachment for additional information on the Program's fiscal year 2015 activity.)
As of August 31, 2015, the Program could guarantee an additional $18.9 billion in bonds before reaching the limit imposed by Board rules and statute, net of its $4.4 billion reserve. The final remaining capacity is equal to 21.7 percent of the Program's statutory capacity.
The guarantee saves school districts and charter districts money by enhancing their bond ratings to the highest possible rating. Without the Program's guarantee, school districts and charter districts would need to (1) purchase private bond insurance or (2) pay higher interest rates on the bonds they sell.
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