EXTERNAL FINANCIAL AUDIT
After interviewing our Superintendent, I found that our external audit is also conducted very similarly to the way Dr. Lu explained it in the course lecture. First, proposals are solicited from area audit firms. The submitted proposals are evaluated, one is selected and a contracted is prepared. The proposal is then submitted to the Board of Trustees for approval.
Our preliminary audit is generally done in August and completed in early August after the fiscal year has closed out August 31. The auditing firm sends a list of the documents that they will examine and the procedures they will follow. They generally stay in our small district for one and a half to two days. The auditors ask questions regarding procedures and they review documents. They also ask questions of some members of the Board of Trustees to make sure that they have been included in the financial process. The auditors then write up their report that complies with state laws.
The auditors prepare an in-depth booklet that identifies strengths and weaknesses of the school’s financial accounting. They will also communicate any findings that the district is out of compliance in any areas should this be the case. The auditors also help determine the district’s fund balance.
At the November School Board meeting, the accounting firm will communicate the results to the Board of Trustees and any other attendees. The results will be reported at a public hearing, a copy of the report is sent to local media and one is submitted to the Texas Education Agency.
Showing posts with label school budget. Show all posts
Showing posts with label school budget. Show all posts
Wednesday, September 14, 2011
Saturday, September 10, 2011
Review of FISD's Maintenance and Operations Fund
The source for funding for our maintenance and operations budget is two parts. Over seventy percent (70.29) of our funding comes from state revenue sources. The Foundation portion of the state funding, which is based on student count, weights, and tax effort, makes up over ninety percent of the state share. The other ten percent comes from the Available School Fund.
The other source for maintenance and operations funding comes from the local sources, primarily taxes. Earned interest, gifts, and delinquent tax collections are combined with the current year tax collections to generate this portion.
Our district was able to approve a balanced budget despite the funding cuts from the state. The district has over the past three years reduced its payroll costs through attrition and replacing more experienced teachers with younger, less experienced ones. Over two-thirds (68.75%) of the current budget is committed to payroll costs. While this is a significant portion of the budget, it is down considerably from years past. Another factor impacting the ability to maintain a balanced proposed budget is the district’s voters ratified a Tax Ratification Election (TRE) in 2008. This provides the district with much needed revenue. Approximately ten percent of this year’s projected revenue is the result of this funding source. The approval of the TRE is further enhanced because the district’s tax base grew by approximately nine percent from the previous year.
In addition to the impact of staff reductions over the years, the ability to control expenditures for the current year has been greatly impacted by the removal of capital outlay items of roof repairs and HVAC installations. While these situations might occur, they are not budgeted as they were in the prior year’s budget. Any emergency expenditures for these type projects would be met through budget amendments. Expenditures for lease purchase payments that were made last year are also removed.
The other source for maintenance and operations funding comes from the local sources, primarily taxes. Earned interest, gifts, and delinquent tax collections are combined with the current year tax collections to generate this portion.
Our district was able to approve a balanced budget despite the funding cuts from the state. The district has over the past three years reduced its payroll costs through attrition and replacing more experienced teachers with younger, less experienced ones. Over two-thirds (68.75%) of the current budget is committed to payroll costs. While this is a significant portion of the budget, it is down considerably from years past. Another factor impacting the ability to maintain a balanced proposed budget is the district’s voters ratified a Tax Ratification Election (TRE) in 2008. This provides the district with much needed revenue. Approximately ten percent of this year’s projected revenue is the result of this funding source. The approval of the TRE is further enhanced because the district’s tax base grew by approximately nine percent from the previous year.
In addition to the impact of staff reductions over the years, the ability to control expenditures for the current year has been greatly impacted by the removal of capital outlay items of roof repairs and HVAC installations. While these situations might occur, they are not budgeted as they were in the prior year’s budget. Any emergency expenditures for these type projects would be met through budget amendments. Expenditures for lease purchase payments that were made last year are also removed.
Saturday, September 3, 2011
Understanding TEA Budgeting Guidelines
TEA FINANCIAL ACCOUNTABILITY SYSTEM
RESOURCE GUIDE
2010
As I studied this resource guide, it was once again repeated to me that budgeting is a daunting task for which a superintendent must be adequately prepared. There are numerous resources to use in this process and the TEA Resource Guide is one of the most readily available and one of the most accessed by the superintendents and other financial officer that I have spoken with.
This document reiterates some of the other things I have learned in this finance course. Most importantly it states that a budget is the product of the planning process. In addition it describes the budget as an important tool for the control and evaluation of a school district’s sources and use of resources. And ultimately, an evaluation based upon budgeted and actual operations of a school can enlighten constituents as to the performance of a school district. I also learned that a budget is a continuous cycle of planning and evaluation used to achieve district goals.
There are several budgetary approaches. Line-item budgeting, performance budgeting, program and planning budgeting, zero-base budgeting and site-based budgeting are the ones explained in this document. Line-item budgeting, the type in which I am most familiar, is the type in which the financial officers base their expenditure requests upon historical expenditure and revenue data. Performance budgeting is, simply put, a budget where expenditures are based upon standard cost inputs multiplied by the number of units of an activity to be provided in that period. PPB, or program and program-planning budgeting is an approach where a variety of different budgeting systems which base expenditures primarily on programs of work and secondarily on objects. It is considered a transitional form of budgeting between traditional line-item and performance approaches. Zero-Base Budgeting (ZBB) is usually used on a periodic basis. The basic principle here is that the budget is prepared by dividing all of the operations into decision units. Then funds are allocated as a package. The final type of budgeting I wish to address is site-based budgeting. This process grants budgeting authority to principals at each campus to control a share of the budgeting process. This type budgeting is used along with one or more of previously mentioned types so that district-wide needs are also considered.
The next portions of the document include legal requirements that focus on local, state and TEA requirements, annual budgetary responsibilities and guidelines that provide roles, responsibilities and help in preparation of a budgeting calendar. The most important information I take from these sections is that to remain legal and timely – consult the manual. It is too easy to make errors that have enormous consequences.
The manual also provides in-depth explanations in estimating revenue and expenditures. Here again, I learned it is imperative to consult the most recent version of state documents and to keep up with new or revised laws and guidelines. I know I will use this information as a resource rather than attempt to memorize all the procedures. This policy has worked for me in other areas and it lessens the chances of making critical, yet avoidable mistakes.
There is a lot of new information that I have learned after studying this manual. I understand better the processes of planning, implementing and evaluating a budget and I feel that I will be able to use one or more of the budget types that were explained in this document. I also feel that I can put into place a goal driven budget based upon the needs of my students and other stakeholders. I also believe that I can adjust a budget throughout a school year when or if emergencies occur. In our small district, I have seen this done as one air conditioning unit replacement becomes of greater importance than something that may already have been earmarked to get an upgrade!
RESOURCE GUIDE
2010
As I studied this resource guide, it was once again repeated to me that budgeting is a daunting task for which a superintendent must be adequately prepared. There are numerous resources to use in this process and the TEA Resource Guide is one of the most readily available and one of the most accessed by the superintendents and other financial officer that I have spoken with.
This document reiterates some of the other things I have learned in this finance course. Most importantly it states that a budget is the product of the planning process. In addition it describes the budget as an important tool for the control and evaluation of a school district’s sources and use of resources. And ultimately, an evaluation based upon budgeted and actual operations of a school can enlighten constituents as to the performance of a school district. I also learned that a budget is a continuous cycle of planning and evaluation used to achieve district goals.
There are several budgetary approaches. Line-item budgeting, performance budgeting, program and planning budgeting, zero-base budgeting and site-based budgeting are the ones explained in this document. Line-item budgeting, the type in which I am most familiar, is the type in which the financial officers base their expenditure requests upon historical expenditure and revenue data. Performance budgeting is, simply put, a budget where expenditures are based upon standard cost inputs multiplied by the number of units of an activity to be provided in that period. PPB, or program and program-planning budgeting is an approach where a variety of different budgeting systems which base expenditures primarily on programs of work and secondarily on objects. It is considered a transitional form of budgeting between traditional line-item and performance approaches. Zero-Base Budgeting (ZBB) is usually used on a periodic basis. The basic principle here is that the budget is prepared by dividing all of the operations into decision units. Then funds are allocated as a package. The final type of budgeting I wish to address is site-based budgeting. This process grants budgeting authority to principals at each campus to control a share of the budgeting process. This type budgeting is used along with one or more of previously mentioned types so that district-wide needs are also considered.
The next portions of the document include legal requirements that focus on local, state and TEA requirements, annual budgetary responsibilities and guidelines that provide roles, responsibilities and help in preparation of a budgeting calendar. The most important information I take from these sections is that to remain legal and timely – consult the manual. It is too easy to make errors that have enormous consequences.
The manual also provides in-depth explanations in estimating revenue and expenditures. Here again, I learned it is imperative to consult the most recent version of state documents and to keep up with new or revised laws and guidelines. I know I will use this information as a resource rather than attempt to memorize all the procedures. This policy has worked for me in other areas and it lessens the chances of making critical, yet avoidable mistakes.
There is a lot of new information that I have learned after studying this manual. I understand better the processes of planning, implementing and evaluating a budget and I feel that I will be able to use one or more of the budget types that were explained in this document. I also feel that I can put into place a goal driven budget based upon the needs of my students and other stakeholders. I also believe that I can adjust a budget throughout a school year when or if emergencies occur. In our small district, I have seen this done as one air conditioning unit replacement becomes of greater importance than something that may already have been earmarked to get an upgrade!
Thursday, September 1, 2011
Superintendent's Roles and Responsibilities in the Budgeting Process
Week 2: Part 4:
After reviewing the readings for this course and interviewing my superintendent, I learned that while the superintendent often has the starring role in the budget process, he or she is wise to consider and consult a variety of resources to attain a budget that will satisfy the needs of the children of the school community. According to Valenti in Learning from the Best, a superintendent should be transparent and fully disclosing in all expenditure transactions, should hire only the most competent business staff and should ensure the integrity of financial affairs for the entire school community. Along with this, he adds that proper planning and number crunching are vital to preparing and maintaining a balanced budget. My superintendent also mentiioned ethics, honesty and full disclosure as integral parts of the financial planning process.Our school is a small 1A district where Pre-Kindergarten students through High School Seniors are served on the same campus. In our situation, the superintendent is primarily the lone financial officer. He is totally responsible for working up the budget even though input is sought from other stakeholders. Our business manager enters the numbers that are provided to generate the report. Sixty-seven percent of our current budget is salaries and benefits. Once the salaries are worked up and provided to her, she has a very detailed process that determines additional costs based on salaries. Those include workers' comp., unemployment compensation,health insurance, statuatory minimums cost , Teacher Retirement System expenditures, etc. In addition to the salaries, the other expenditures from the previous years are reviewed and adjusted depending on the level spent. Other anticipated items are included. For example, two years ago, a roof had to be replaced, last year air conditioning for the gymnasium was replaced and this year we anticipate purchasing at least one additional bus. It is all put together and you hope for enough funding to balance, and the superintendent continues to monitor the budget throughout the year and recommends budget ammendments as needed.Reflection:The superintendent's role as a financial officer is one of his or her greatest responsibilities. It was suggested in the readings this week that a superintendent devote twenty percent of his time to budgetary needs. This daunting task requires knowledge of the school and students' needs as well as knowledge of budgetary rules and procedures. Ethics is also mentioned as a great portion of meeting the budgeting officer requirements. A trust among the Superintendent and other district stakeholders must be maintained in order for the budget process to go smoothly. Another aspect of the superintendent's role that I have learned is that it is an ongoing, year-long process.
After reviewing the readings for this course and interviewing my superintendent, I learned that while the superintendent often has the starring role in the budget process, he or she is wise to consider and consult a variety of resources to attain a budget that will satisfy the needs of the children of the school community. According to Valenti in Learning from the Best, a superintendent should be transparent and fully disclosing in all expenditure transactions, should hire only the most competent business staff and should ensure the integrity of financial affairs for the entire school community. Along with this, he adds that proper planning and number crunching are vital to preparing and maintaining a balanced budget. My superintendent also mentiioned ethics, honesty and full disclosure as integral parts of the financial planning process.Our school is a small 1A district where Pre-Kindergarten students through High School Seniors are served on the same campus. In our situation, the superintendent is primarily the lone financial officer. He is totally responsible for working up the budget even though input is sought from other stakeholders. Our business manager enters the numbers that are provided to generate the report. Sixty-seven percent of our current budget is salaries and benefits. Once the salaries are worked up and provided to her, she has a very detailed process that determines additional costs based on salaries. Those include workers' comp., unemployment compensation,health insurance, statuatory minimums cost , Teacher Retirement System expenditures, etc. In addition to the salaries, the other expenditures from the previous years are reviewed and adjusted depending on the level spent. Other anticipated items are included. For example, two years ago, a roof had to be replaced, last year air conditioning for the gymnasium was replaced and this year we anticipate purchasing at least one additional bus. It is all put together and you hope for enough funding to balance, and the superintendent continues to monitor the budget throughout the year and recommends budget ammendments as needed.Reflection:The superintendent's role as a financial officer is one of his or her greatest responsibilities. It was suggested in the readings this week that a superintendent devote twenty percent of his time to budgetary needs. This daunting task requires knowledge of the school and students' needs as well as knowledge of budgetary rules and procedures. Ethics is also mentioned as a great portion of meeting the budgeting officer requirements. A trust among the Superintendent and other district stakeholders must be maintained in order for the budget process to go smoothly. Another aspect of the superintendent's role that I have learned is that it is an ongoing, year-long process.
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