We examined the population of audited financial reports from all of Washington State's 292 School Districts via the State Auditor's Office. We found that 19 percent of school districts do not produce audited financial statements, and an additional 34 percent have problems ranging from relatively minor to severe. Of the remainder, 46 percent are generally compliant, yet only one percent of school districts produce disclosures that fully comply with generally accepted accounting standards (GAAP). This rate and quality of disclosures is significantly less and of lower quality than many other systems of financial reporting. The current reporting system appears to have significant flaws.