Financial Management for School Board Members - WordPress.com

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10 Νοε 2013 (πριν από 3 χρόνια και 7 μήνες)

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Financial Management for School
Board Members

How to Develop a ‘Toolkit’ for
improving fiscal responsibility

Can School Finance be understood?


YES!!!


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
finance.


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
distress.


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

Board and Administration Roles


Administration


providing information


Administration


providing explanation


Administration


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
excuse.


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

Confusion is Not Acceptable


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

Financial Reports Should Be


Relevant



Reliable and
Verifiable



Comparable



Consistent

Reports to Expect


ALWAYS:


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


prepared
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
year.

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
checks.

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
restricted
.


Division I funding (state salaries)


Some state funding affords
limited
flexibility.


Division II (Energy; All Other Cost)


Some state funding allows
total flexibility
.


Division III (Equalization)

Restricted


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
propane.

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

Flexibility


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


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

Local Funds


Raised by the school district through local tax
levies.


Four categories:


Current Expense


funds general operations.


Tuition


funds special needs students
in identified
programs

(not special education).


In district; in other school districts; in private placements


Match


funds state programs that authorize a local
match.


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
separate.


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


IDEA


this grant is spent on services
and materials for special education
students.


Title I


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


Getting it All Together


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


It always requires
balancing
expectations and
ability.


Budget Process


School Districts establish internal procedures
for development.


Information gathered from Unit Count


Spending requests gathered from schools and
departments


Fixed expenses determined; discretionary spending
planned.


Review and feedback to/from DO/Schools and
departments.


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
“fiduciary
responsibility.”


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

Monitoring Financial Health


Only one way to do it:


Periodic (Monthly/bi
-
monthly/quarterly)
financial reporting


Public discussion and Board Action


Methodology for review of reporting


Supporting documents (state reports)


Internal review


Other review

But it’s SO TECHNICAL


Approach it just as
you would approach
a bank statement


How much money is
there?


How much was
added?


How much was
spent?


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
addressed



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



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
discussion.


Don’t take “no” for an answer.

Board Member Suggested Actions


Standardized Reporting


Complete annual financial audit