Financial Management for School Board Members -


10 Νοε 2013 (πριν από 4 χρόνια και 8 μήνες)

97 εμφανίσεις

Financial Management for School
Board Members

How to Develop a ‘Toolkit’ for
improving fiscal responsibility

Can School Finance be understood?


Like other big
picture items, we’ll break it
into smaller parts.

You don’t need to be an accountant or a
financial wizard to understand school

You do need to get meaningful
information in an understandable format
on a regular basis.

Legislative Action for FY2007

Requires school board member attendance for
financial responsibility training.

The addition of a third Local Financial Position
Report, February 1.

Authorization for DOE to intervene when a
school district meets the criteria for financial

Authorization to hold remaining 25% share of
state funds until Aug 31 report received.

Board and Administration Roles


providing information


providing explanation


providing guidance

Board Members

making decisions
based on information, explanation and
guidance provided.

Typical Problems

The “accountant myth”

don’t fall for it.

The myth says that an
accountant is someone
who explains to you a
problem you didn’t know
you had in a way you
can’t understand.

It’s not a myth

it’s an

Financial matters should
always be presented in a
way you can understand

Confusion is Not Acceptable

Accurate and
complete reporting is
part of the finance
officer’s job of
financial reality to the
board, the
administration and
the community.

Financial Reports Should Be


Reliable and



Reports to Expect


Budget: Budgets are planning documents showing
how your district intends to spend money. Board
approved documents.

Financial Report: Regular periodic statement showing
revenues and expenses for the year and a
comparison to budget.

Financial Position Reports: Required three times
annually; projected cash flows for Feb. 1, May 1 and
Aug 31.

Must be accompanied by a financial plan if the district is
experiencing cash flow problems.

Timing of the Budget

Preliminary Budget

customarily prepared in
Spring. Serves as a
“starting point” for the
budget year. Presented
in June/July.

Final Budget

after Unit Count is
complete and state
allocations are known.

Understanding a Budget

Key concepts:

No “money” exists in the
budget. Budget is based
on amount of money you
have in the bank.

It is a thoughtfully
prepared plan.

It should reflect the
priorities of the district.

It may need to be
amended during the

State’s Financial Management System

All School District funds are deposited with the
state and are in a bank account managed by
the state along with all other state agency funds.
It’s the state’s bank account.

State issues the checks.

Interest is earned on this state account and
distributed to school districts.

We don’t write checks. We send requests for

The Basics

School districts rely primarily on three
different funding sources.

State of Delaware Funds

Local Funds

Federal Funds

There are other funds that school districts
receive such as local grants.

There are separate “rules” for each category.
We’ll look at each one separately.

State Funds

Some state funding is

Division I funding (state salaries)

Some state funding affords

Division II (Energy; All Other Cost)

Some state funding allows
total flexibility

Division III (Equalization)


Division I funds can only
be used to pay for the
state share of salary and
benefits for
positions that
the state certified

as part
of the September Unit
Count or for positions that
the state categorically
granted to the district
through state laws

custodians, reading
specialists, etc.

State salaries are
determined by published
state salary scales.

Limited Flexibility

Division II State funds allow for some
flexibility within the category of the fund.

Examples: Energy money may be used for
electricity, or heating oil, or natural gas or

All Other Costs: Funds may be spent for
material, supplies, equipment and
contractual services. Cannot be used for
salaries or energy.


State funds occasionally
offer total flexibility. This
means that we can spend
this money on anything
that the board approved
in the budget

costs, materials, contract
services, equipment, etc.
No restrictions. Division
III Equalization

Local Funds

Raised by the school district through local tax

Four categories:

Current Expense

funds general operations.


funds special needs students
in identified

(not special education).

In district; in other school districts; in private placements


funds state programs that authorize a local

Minor caps 60/40; technology maintenance and block
grant; extra time 70/30; Reading Resource teachers
70/30; Math Specialists 70/30.

Debt Service

pays principal and interest on bonds
authorized by referenda.

Basic Rules of Local Funds

Funds are kept

Two rates are limited
by referendum

Current Expense and
Debt Service

Two rates are limited
by Board Action

Tuition and Match

Federal Funds

Federal funds are
always restricted as
to purpose and the
time period during
which the money
may be spent.

State approves
application and
grants funds to
districts as “sub
grantee” of state.

Federal Grant Components

Specific Amount for Salaries

Specific Amount for Benefits

Specific Amount for Professional Services

Specific Amount for Material and Supplies

Specific Amount for Capital Outlay

Cannot overspend any category without
complying with the DOE amendment process.

Typical Federal Grants


this grant is spent on services
and materials for special education

Title I

this grant provides enhanced
educational opportunities and materials
for children who meet certain income

Getting it All Together

Once the district
knows the total funds
available then the
spending plan is put

It always requires
expectations and

Budget Process

School Districts establish internal procedures
for development.

Information gathered from Unit Count

Spending requests gathered from schools and

Fixed expenses determined; discretionary spending

Review and feedback to/from DO/Schools and

State law requires the Superintendent to
present a prepared budget to the Board and to
the State.

You See the Budget

Now What?

Is there a process for
board review and
comment? Do you
want one?

Is there a period for
public comment? Do
you want one?

Not a “Spectator Sport”

Your Role

Official term for it is

A legitimate effort of
“due diligence”
through which you
have reason to
conclude that the
plan is

Monitoring Financial Health

Only one way to do it:

Periodic (Monthly/bi
financial reporting

Public discussion and Board Action

Methodology for review of reporting

Supporting documents (state reports)

Internal review

Other review


Approach it just as
you would approach
a bank statement

How much money is

How much was

How much was

How much is left?

Potential Signs of Trouble

If a number of things
are “missing” you
should be concerned

No budget

No regular reporting

Answers not given

Concerns not

The Teachable Moment

Learning difficult lessons

Becoming more involved

Becoming better informed

Establishing reasonable expectations

self and others

The higher level of accountability

End of the teacher year is not the end of
financial responsibility.

Items to Remember


Budgets must reflect “actual revenues”

Expenses cannot exceed revenues. In
other words, you can’t spend more than
you actually have.

“How we are doing”

the financial report

should be a regular reporting event and

Don’t take “no” for an answer.

Board Member Suggested Actions

Standardized Reporting

Complete annual financial audit