The Virginia Acts of Assembly directs the Auditor of Public Accounts (Office) to establish a prioritized early warning system and annually monitor data and information from this system to identify potential fiscal distress within local governments across Virginia. As part of this system, the Office calculates 12 financial ratios using data from the localities’ audited financial reports and analyzes the results of each locality’s ratio performance using a points-based methodology. We also review any trends showing significant increases in total points from year to year.