ACSA Leadership Conference November 2013
Brett W. McFadden, CBO Pajaro Valley USD
Sandra J. Harrington, CBO Ukiah Unified ...
The Big Picture: Areas of Responsibility
The Role of the Business Department
The Role of the Principal

The Budget Process...
Understanding our roles…

3


It will depend on the size of the district
◦ Larger districts (6k ADA +) – more of a leadership and strategic role, wit...


Customer Service and Support – We are dedicated to helping you “Do It Right”



The responsibilities of the business o...


Instructional and Site Leader



Budget Management



Recordkeeping



Legal Compliance



Safety

6


School finance is complicated – even seasoned veterans make mistakes



Keep your own records – it is the site leader’...








Projects education plan for fiscal year
Shows sources of funds and expenditures
School Site Council
School ...
It’s a brand new world…2012/13
Local Control Funding Formula…
Local Control Accountability Plan
(LCAP)…Common Core State
S...
The old system:
Formula driven

A new system:
Local Control Funding Formula

10
11


The LCFF is the most sweeping change to school finance policy in 40 years



Policy and budget making via formulas is ...
Factors

K-3

4-6

7-8

9-12

$6,845

$6,947

$7,154

$8,289

Adjustment factors

10.4% CSR

--

--

2.6% CTE?

CSR, CTE a...
◦

$1.25 billion for Common Core implementation –
one-time over two years

◦

CTE one-time grants - $250 million statewide...


Check your LCFF funding and 8-year target

◦ Figures could be inaccurate, do double check
◦ Double check F/R lunch coun...
Core Includes (but not limited to)
Teachers/classroom

Adult Ed

Professional Dev.

Sports/Athletics

Facilities/Planning
...
Districts will need to develop a process for LCAP development and approval

This is like zerobased budgeting

• What do yo...
18
District revenues

Equates to
a 23%
drop in
state
revenues

Phased recovery over time

Return to 2007-08 per ADA
statutory...
•
•
•
•
•

Projects education plan
Identifies sources of revenue &
expenditures
Informs the public
Guides evaluation of pr...


Developed and adopted each year



Revised no less than two times per year



Many forms and schedules



Many facto...


Locally Controlled Funding Formula (LCFF) – A Paradigm shift
◦ Base funding
 Determined by ADA, Grade span target fund...


Add-ons to LCFF
◦ Home-to-School Transportation
◦ Targeted Instructional Improvement Grant (TIIG)



State Lottery


...


Revenue
◦ CBEDS
◦ ADA
◦ COLA
◦ New Programs
◦ Eliminated Programs
◦ Statewide ADA



Expenditures
• New Programs
• Del...
Budget action:
Adopted budget*
Unaudited actuals (fiscal activity through year end)
Annual independent audit of prior-year...
Total
Revenue

Federal
State
Local
LEAs typically get their revenues from five sources:*
1.

State aid: state sales and income taxes – allocated via the Prop...
EdSource Jan. 2011
* Not all revenues go to instruction. For example, $2.5 billion pays for child care and adult ed.
28


Unrestricted Income – Resource “0000”
◦ Not restricted or designated by the donor
 Not subject to specific constraints...


All school district budgeting is organized according to the Standardized
Accounting Code Structure (SACS)



SACS prov...
The seven fields in SACS and the required minimum digits for each are:
Note: These are minimums, districts may require add...
Fund:

A fund identifies specific activities or defines certain objectives of BHUSD in accordance with CDE.
Most activity ...
1000’s - certificated employees
•Contract teachers/others
•Hourly teachers
•Substitute teachers (staff development)
2000’s...
4000’s – Books & Supplies
•Instructional materials, books, other materials
•Support materials/supplies, software
•Computer...
•
•

•
•
•

Projects education plan
Identifies sources of revenue &
expenditures
Informs the public
Guides evaluation of p...


Knowing what to do and when is key to success



Develop clear timelines on your site / program budgets over the cours...


As principal / assistant principal, you will oversee several types of budgets



The type of funds will depend on dist...
Unrestricted fund
•Usually recurring
•Supply and equipment budgets
•Typically less rules

Grants/Donations
•Usually one-ti...


Spring
◦
◦
◦
◦
◦

Begin planning for FY and instructional year
Determine inefficiencies, deficiencies, and areas of imp...


You will likely have several different funding sources – ASB, yearbook,
PTO/A, site discretionary, campus supervision, ...


Personnel costs are often the top expenditure – especially for programs
◦ About 85 percent of your total budget is lock...


Remember – all revenues are “green”



Spend most restricted dollars first



Spend time sensitive funds first



Co...


Developing and implementing budgets is a critical skill for all site leaders



Knowing it and doing it well increases...
•

Know The Rules…

44




Average Daily Attendance
◦ Legal Responsibility
 Accountability
◦ Recordkeeping
 Complete & Accurate
◦ Audit focus...


California Basic Education Data System (CBEDS)
◦ A count of enrolled students
◦ Updated every year in October
◦ Statist...


Establish monthly activity reports and closely track expenditures and income



Identify a site-level staff member to ...


This is typically an account to deposit funds raised by and/or for students –
specifically mentioned in Education Code ...
Allowable

Prohibited

Field trips and camps

Salaries for district employee

Science and nature trips

Supplies for distr...


You don’t need to be a budget “whiz” to be a great instructional leader



Business office staff won’t expect you to b...


A great site and program leader should be a passionate advocate for their school
and/or program



It is okay to have ...
As a leader, you are only going to be as “popular” as your last
“yes”. Strive to be trustworthy, consistent, fair, and set...
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School finance 101 for new principals acsa leadership conference nov 2013 (final)

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School finance 101 for new principals acsa leadership conference nov 2013 (final)

  1. 1. ACSA Leadership Conference November 2013 Brett W. McFadden, CBO Pajaro Valley USD Sandra J. Harrington, CBO Ukiah Unified School District 1
  2. 2. The Big Picture: Areas of Responsibility The Role of the Business Department The Role of the Principal The Budget Process: Macro-to-Micro State Budget District Budget Site Budgets Other Areas of Responsibility Attendance ASB Fundraising 2
  3. 3. Understanding our roles… 3
  4. 4.  It will depend on the size of the district ◦ Larger districts (6k ADA +) – more of a leadership and strategic role, with reliance on department directors for technical expertise ◦ Smaller districts (3k ADA -)– more technical expertise and hands on, may rely more on the county office of education for direct service  But the CBO is the one that’s in charge of the operational and fiscal aspects of the district – the stuff that makes the wheels go round  Their top priority – keeping the district fiscally solvent! 4
  5. 5.  Customer Service and Support – We are dedicated to helping you “Do It Right”  The responsibilities of the business office include: ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ Accounting Budgeting Purchasing Technology Facilities Maintenance, ops, grounds, and transportation Food services Risk management and safety And any other operational, technical, administrative matter  Advice for a new principal – get to know the business office staff well, “always take care of the gate keepers”  Keep in mind that they are not typically educators – they often will speak and think differently than instructional folks 5
  6. 6.  Instructional and Site Leader  Budget Management  Recordkeeping  Legal Compliance  Safety 6
  7. 7.  School finance is complicated – even seasoned veterans make mistakes  Keep your own records – it is the site leader’s responsibility ◦ District financial systems are often hard to understand – keep your own excel spreadsheets  Don’t rely solely on the district office for record keeping  There will often be a delay from when a site encumbers or spends funds and when that activity shows up on a district report and/or updated budget  Distinguish between ongoing commitments and one-time expenditures – you may look like you have the budget, but your ongoing commitments may limit your ability to spend funds at the end of the year 7
  8. 8.        Projects education plan for fiscal year Shows sources of funds and expenditures School Site Council School Plan for Student Achievement Informs the public Guides evaluation of a year’s program Guides comparison to prior years
  9. 9. It’s a brand new world…2012/13 Local Control Funding Formula… Local Control Accountability Plan (LCAP)…Common Core State Standards… 9
  10. 10. The old system: Formula driven A new system: Local Control Funding Formula 10
  11. 11. 11
  12. 12.  The LCFF is the most sweeping change to school finance policy in 40 years  Policy and budget making via formulas is gone LCFF/ LCAP ◦ Local control accountability plan and budget developed simultaneously = What you will do and be held accountable for ◦ Under an 8-year phase in The paradigm shift: Spending directly accountable to educational outcomes 12
  13. 13. Factors K-3 4-6 7-8 9-12 $6,845 $6,947 $7,154 $8,289 Adjustment factors 10.4% CSR -- -- 2.6% CTE? CSR, CTE amounts $711.88 -- -- $215.51 Grade Span Base Grant per ADA Add the following amounts to the base grant and adjustments above: • Supplemental grant - 20% of the grade span base grant multiplied by the districtwide % eligible students • Concentration grant - 50% of the grade span base grant multiplied by the districtwide % eligible students that exceed 55% of total enrollment Add on: Home-to-School Transportation and Targeted Instructional Improvement Grant Funded at 2012-13 levels Add each column to get target grant and divide by 8 to get yearly increase
  14. 14. ◦ $1.25 billion for Common Core implementation – one-time over two years ◦ CTE one-time grants - $250 million statewide ◦ Prop. 39 energy efficiency grants – dedicated solely to schools via formula
  15. 15.  Check your LCFF funding and 8-year target ◦ Figures could be inaccurate, do double check ◦ Double check F/R lunch count and EL student enrollment ◦ Check that your base year amount is correct  Watch for updates and direction on Local Control Accountability Plan  Start educating your board, employees, unions, community now  Integrate LCFF planning into Common Core implementation and planning 15
  16. 16. Core Includes (but not limited to) Teachers/classroom Adult Ed Professional Dev. Sports/Athletics Facilities/Planning Books/Supplies Educational Services Utilities Maintenance Health & Welfare Operations BTSA For New Teacher Textbooks Gate IT Board of Trustees Business Services Safety and Security HR Student Services State categoricals Child Care Transportation Healthy Start Nutrition/Food Migrant Ed (State) Nurses Speech/Hearing State/Federal Accountability New unrestricted funding is limited
  17. 17. Districts will need to develop a process for LCAP development and approval This is like zerobased budgeting • What do you do now? • How much does that cost? • What must you absolutely do to stay operational? • Where do you want to be? • What do your students need? Internal planning w/ the LCFF model Facilitating, selling, communicating • How much do you get under LCFF? • What is your yearly revenue growth? • What is the break down – restricted vs. unrest.? • What are your immediate and long term needs? • What does your board look like and want? • Where is your community? • Where are your unions? • What is your communications and political game plan? 17
  18. 18. 18
  19. 19. District revenues Equates to a 23% drop in state revenues Phased recovery over time Return to 2007-08 per ADA statutory funding levels Eight year phase in of LCFF funding 19
  20. 20. • • • • • Projects education plan Identifies sources of revenue & expenditures Informs the public Guides evaluation of programs Trend Analysis 20
  21. 21.  Developed and adopted each year  Revised no less than two times per year  Many forms and schedules  Many factors contribute to change
  22. 22.  Locally Controlled Funding Formula (LCFF) – A Paradigm shift ◦ Base funding  Determined by ADA, Grade span target funding levels ◦ Supplemental and Concentration funding  Determined by Unduplicated English learners, FRPM eligible and foster care students ◦ Data Integrity  CalPADS – Directly tied to funding ◦ Includes previously designated funding sources  EIA, CSR (add on), ROP, Tier III Flex Categoricals ◦ Accountability Requirements – LCAP  A work in process
  23. 23.  Add-ons to LCFF ◦ Home-to-School Transportation ◦ Targeted Instructional Improvement Grant (TIIG)  State Lottery  Common Core Standards Implementation ◦ One-time funding – Ongoing Need  Spending authority over two years ◦ Technology, Professional Development, Instructional Materials
  24. 24.  Revenue ◦ CBEDS ◦ ADA ◦ COLA ◦ New Programs ◦ Eliminated Programs ◦ Statewide ADA  Expenditures • New Programs • Delivery of Programs • Carry Over Balances • • • • Balance from prior year programs Calculated when year-end closing completed September 15th Audited by external auditors • Step & Column • Salary Costs • Unemployment Insurance • Worker’s Compensation • Cost of Doing Business
  25. 25. Budget action: Adopted budget* Unaudited actuals (fiscal activity through year end) Annual independent audit of prior-year budget 1st Interim Report (activity through Oct 31) 2nd Interim Report (activity through January 31) 3rd Interim Report (activity through June 30) Federal fiscal year Adoption date: July 1 By September 15 October each year December 15 March 15 If required by COE Oct 1 – Sept 30 •If no state budget by July 1, a revised budget must be adopted within 45 days after the state budget is adopted •Federal expenditure reporting will follow the federal fiscal year 25
  26. 26. Total Revenue Federal State Local
  27. 27. LEAs typically get their revenues from five sources:* 1. State aid: state sales and income taxes – allocated via the Proposition 98 funding formula 2. Property taxes: Collected locally but allocated to schools based on a state-determined formula (Prop. 98) 3. Federal aid: Earmarked for special purposes, most notably Child Nutrition, Special Education, and No Child Left Behind (NCLB) 4. Local miscellaneous: Can include such sources as community contributions, interest income, developer fees, and revenues from local parcel tax elections 5. Lottery: Portions of the proceeds from the California State Lottery goes to school districts on a per-pupil basis, providing a token per-pupil allocation to school districts and charter schools * EdSource and Legislative Analyst’s Office 27
  28. 28. EdSource Jan. 2011 * Not all revenues go to instruction. For example, $2.5 billion pays for child care and adult ed. 28
  29. 29.  Unrestricted Income – Resource “0000” ◦ Not restricted or designated by the donor  Not subject to specific constraints  May be used for any purpose not prohibited by law  Restricted Income – Resource “1000-9999” ◦ Legally restricted use ◦ Restricted use defined by owner  For specific purposes
  30. 30.  All school district budgeting is organized according to the Standardized Accounting Code Structure (SACS)  SACS provides a level of consistency for budget comparisons and reporting  It provides: ◦ Ability to identify expenditures by type and amount ◦ Ability to make reasonable comparisons between districts and programs  Districts are required to use SACS for state and federal reporting purposes 30
  31. 31. The seven fields in SACS and the required minimum digits for each are: Note: These are minimums, districts may require additional digits ◦ ◦ ◦ ◦ ◦ ◦ ◦ Fund - 2 digits Resource - 4 digits Project Year - 1 digit Object - 4 digits Goal - 4 digits Function (Activity) - 4 digits District Defined – 4 digits 31
  32. 32. Fund: A fund identifies specific activities or defines certain objectives of BHUSD in accordance with CDE. Most activity occurs in Fund 01, our general fund. Resource: The resource code is used to classify revenue and expenditures that have special accounting or reporting requirements or that are legally restricted. This code explains what restricted/unrestricted funding source is being used. Object: The object code classifies expenditures by type of commodity or service. (e.g. – certificated salaries, benefits, instructional supplies, travel & conference) Project Year: Identifies the reporting year for a project that has more than one reporting year during the LEA’s fiscal year. Location: The site code designates a specific, school or department structure or group of structures that form a campus or department under an administrator’s responsibility. Goal: The goal identifies the instructional goals and objectives. It groups costs by population, setting, and/or educational mode. Examples include regular education K-12, continuation schools, migrant education, and special education. This code explains who is being served. Function: The function identifies activities or services performed to support or accomplish one or more goals or objectives. Examples include instruction, school administration, and transportation. This code explains what you are doing with the funds. District Defined: District specific code that ties to a specific function/project not identified within other codes. 32
  33. 33. 1000’s - certificated employees •Contract teachers/others •Hourly teachers •Substitute teachers (staff development) 2000’s - classified employees •Contract employees -Instructional assistants -Clerical -Technology/media •Extra/overtime •Substitutes 3000’s - benefits •Health/welfare •Mandatory (Social Security, Medi-Care, Workers’ Compensation) •STRS/PERS
  34. 34. 4000’s – Books & Supplies •Instructional materials, books, other materials •Support materials/supplies, software •Computers/furniture/equipment 5000’s – Services/Operating Expenses •Travel/conference •Memberships •Leases, maintenance agreements •Equipment repairs 6000’s – Capital Outlay •Furniture/equipment 7000’s Indirect costs
  35. 35. • • • • • Projects education plan Identifies sources of revenue & expenditures Informs the public Guides evaluation of programs Trend Analysis 35
  36. 36.  Knowing what to do and when is key to success  Develop clear timelines on your site / program budgets over the course of the fiscal year  Make sure your fiscal and instructional actions match up – if you change your plan, change your budget to reflect the change (if needed) ◦ LCAP ◦ School Site Council ◦ School Plan for Student Achievement  Memorialize your actions – text explanations should accompany your budgets to explain what you did, why, and when you did it.  Keep your district office budget person up to speed – always! 36
  37. 37.  As principal / assistant principal, you will oversee several types of budgets  The type of funds will depend on district protocols and fiscal practice ◦ ◦ ◦ ◦ ◦ ◦ ◦ Site discretionary funds Site operations and administration Books and supplies Associated Student Body (ASB) funds Federal grants – QEIA, Title I, SIG Clubs, parent groups, site council Special funds – facilities, recycling, after-school 37
  38. 38. Unrestricted fund •Usually recurring •Supply and equipment budgets •Typically less rules Grants/Donations •Usually one-time •Variable rules/restrictions •Provided for specific expenditures Restricted fund PTA/Booster Clubs •Categorical programs •Usually one-time •Usually recurring •Political context – keep it in mind •SIP, EIA-LEP, Title 1 •Provided for specific expenditures •Program-based with rules/restrictions •Be careful / ask questions 38
  39. 39.  Spring ◦ ◦ ◦ ◦ ◦ Begin planning for FY and instructional year Determine inefficiencies, deficiencies, and areas of improvement Determine available funding and what you want to accomplish Develop budget that coincides with program implementation and goals/objectives Begin discussions with School Site Council   Identify and align budgeted expenditures with Single Plan for Student Achievement Start of the instructional year ◦ Resource allocation and match up ◦ Oversee program and evaluate program startup ◦ Review SPSA and budget for alignment  During the year ◦ Periodically evaluate program and budget ◦ Compare any variances to prior year ◦ Monitor year-to-date spending and where you are to budget  Monthly Budget Certification Reports – Review, transfer and certify ◦ Keep district office personnel up to date on status and progress ◦ Recommend taking these actions monthly 39
  40. 40.  You will likely have several different funding sources – ASB, yearbook, PTO/A, site discretionary, campus supervision, etc. etc.  Understand the rules of each – what you can, and what you can’t  Work with your district office staff to develop one overall site / program budget that includes all funds and spending  Organize it in a way you can easily see the macro and micro  You should be able to describe the basics of your site / program budget to your staff, parents, board members, superintendent 40
  41. 41.  Personnel costs are often the top expenditure – especially for programs ◦ About 85 percent of your total budget is locked up in salaries and benefits  Things to remember and factor into site/program budgeting: ◦ ◦ ◦ ◦ ◦ ◦ ◦ ◦ Total compensation – not just salary, but benefits too! Length of position Certification Funding source – one-time vs. ongoing, categorical ? Job description – especially if a new position Management vs. labor position – is it subject to collective bargaining? Reporting and accountability Layoff notification, bumping, 39-month rehire list, and other seniority requirements Remember to work closely with the Human Resources and Business Office when personnel changes are necessary or clarification is required. We are here to help! 41
  42. 42.  Remember – all revenues are “green”  Spend most restricted dollars first  Spend time sensitive funds first  Consider multi-funding  Good balances are prudent – but remember, the money is meant for students, so spend it appropriately and timely  Use the SMART goal approach to evaluate effectiveness – did your spending positively impact learning and achievement?  Budget Integrity in Purchasing –Budgets have to be sufficient or purchase orders should not be processed. ◦ . 42
  43. 43.  Developing and implementing budgets is a critical skill for all site leaders  Knowing it and doing it well increases your chances for success in all areas – student achievement, site management, instructional leadership  It can be a career ender if you don’t pay attention and get sloppy  Always use the Business Office as a resource to help spend today’s dollars on today’s students responsibly and within the legal guidelines 43
  44. 44. • Know The Rules… 44
  45. 45.   Average Daily Attendance ◦ Legal Responsibility  Accountability ◦ Recordkeeping  Complete & Accurate ◦ Audit focus  Errors can costs $$$$$$$ ◦ Determines funding levels  State, Federal ◦ Safety  Where is my child? Data Integrity ◦ CBEDS  LCFF = Critical to get your data right!!!! 45
  46. 46.  California Basic Education Data System (CBEDS) ◦ A count of enrolled students ◦ Updated every year in October ◦ Statistical data drives various fund sources  Average Daily Attendance (ADA) ◦ Average student attendance on any given day ◦ Calculated three times a year for State Reporting ◦ Determines base LCFF funding, lottery funding, etc.
  47. 47.  Establish monthly activity reports and closely track expenditures and income  Identify a site-level staff member to act as bookkeeper – but monitor them, you are ultimately responsible!  Follow district and board-adopted procedures  Distribute monthly reports to club members, staff, and business office  Put in controls for cash management and collection  See FCMAT manual – www.fcmat.org WARNING – Don’t take this for granted. ASB funds can quickly get out of control! 47
  48. 48.  This is typically an account to deposit funds raised by and/or for students – specifically mentioned in Education Code 48930-48938  Warning! – This is the most common account that is noted for audit exceptions and mismanagement  Site leaders are responsible management and reporting  It is critical that site leaders master the essentials of proper supervision and management of ASB funds 48
  49. 49. Allowable Prohibited Field trips and camps Salaries for district employee Science and nature trips Supplies for district purposes Library materials Awards for students/staff Playground equipment Faculty professional development Expenses for PTC/PTAs Maintenance/repair of equipment Magazine subscriptions Student services Items of personnel use by district employees 49
  50. 50.  You don’t need to be a budget “whiz” to be a great instructional leader  Business office staff won’t expect you to be a budget expert – and they may not want you to be  You do, however, need to have a baseline competency and appreciation of budget concepts and technical practices  More importantly, you need to respect timelines and administrative processes – they are there because they are required to be and to protect you and the district as a whole. 50
  51. 51.  A great site and program leader should be a passionate advocate for their school and/or program  It is okay to have a bit of “push the envelope” mentality for your site/program – all great leaders display an element of this trait  But respect the fiscal process – understand how far the envelope goes  Know the fiscal and HR process – understand it – and stay current on it  Respect fiscal and HR staff – give them proper heads up – give them the opportunity to serve students too. 51
  52. 52. As a leader, you are only going to be as “popular” as your last “yes”. Strive to be trustworthy, consistent, fair, and set a positive model of the work habits and interpersonal behaviors you value in the organization. The popularity will eventually follow. Dr. Jeff Baarstadt, Superintendent Conejo Valley USD Former CBO, Principal and Teacher 52
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