The Virginia Acts of Assembly and Code of Virginia direct the office of the Auditor of Public Accounts to establish a prioritized early warning system and annually monitor data and information from this system to identify whether a locality may meet the defined criteria for fiscal distress. As part of this annual monitoring process, our Office analyzes leading financial indicators through ratio analysis using data from each locality’s audited annual financial report. The annual monitoring process also includes a second component, a qualitative analysis, to evaluate demographic and non-financial factors, along with other applicable leading indicators and external information for applicable localities whose financial ratio results indicate a need for further review. This summary document provides more information on our Office's monitoring process and the financial ratio and qualitative analyses completed as part of this process.