A school district located in a polygamous community has cleared a financial audit and has just one final hurdle -- approval from the Arizona State Board of Education -- to end nearly four years of state oversight.

The Arizona Auditor General's Office notified the state education office in September that the Colorado City Unified School District operated in the black during the 2008 school year and has met other financial criteria needed to move it out of receivership.

The district has asked the board to take that action at its Oct. 26 meeting.

"We hope it's good news," said Carol Timpson, district superintendent. "It should be just a formality. The receiver is ready for it, we're ready for it."

The district consists of one school -- El Capitan, which has an enrollment of 450 students. Those students come from Centennial Park, Hildale and Colorado City, Cane Beds and other nearby areas.

"The education of the children has never suffered," said Timpson, noting El Capitan has been nationally recognized as a highly performing school.

The state took over the district in December 2005 as financial straits resulted in staff cutbacks, salary reductions and even bounced paychecks.

The Arizona Attorney General's Office alleged then-administrators -- all FLDS members -- had mismanaged and misappropriated funds, causing the financial problems.

School administrators said the problems were caused by inadequate tax revenue and declining enrollment, triggered when members of the Fundamentalist Church of Jesus Christ of Latter Day Saints withdrew children from public school in 2000.

Enrollment dropped by half as a result.

In 2008, the state closed the investigation into whether previous administrators misappropriated funds without filing any charges.

The district had to pay for the state-ordered monitoring, a cost that totaled close to $500,000, Timpson said. Most of that expense came in the first year of receivership.

She said the district will save $30,000 to $70,000 a year once oversight ends.

But, "The biggest thing it is going to save us is time," Timpson said. "It is going to be huge for us to not have so many entities we have to report to."