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Fiduciary Duty Legal authority Malfeasance
Who is minding the store? 2
Fiduciary Duty Legal authority Malfeasance
What this means…
VA Code: 22.1-89 Management of funds “Each School Board shall manage and control the funds made available to the School Boards for public schools and may incur costs and expenses.”
The School Board determines how the funds are to be spent. The local governing body determines appropriation levels.
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Fiduciary Duty Legal Authority Malfeasance
What this means…
VA Code: 22.1-91 Limitation on expenditures “No school board shall expend or contract to expend, in any fiscal year, any sum of money in excess of the funds available for school purposes for that fiscal year . . . .”
The School Board can not exceed the appropriation levels determined by the local governing body.
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So, who IS minding the store? Superintendent CFO/Director of Finance/Assistant Superintendent
School Board
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BUDGET
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Budget Superintendent’s role School Board role
Local governing body role
Who does what…when? 7
ORIGIN OF WORD “Budget”
VIDEO about word “budget” from Hotforwords.com
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ORIGIN OF WORD “Budget” The origin of our word budget is the Latin bulga, a little pouch or knapsack. The word turned up in English in the fifteenth century, having travelled via the French as “leather bag” where housewives kept their money. Video source: Hotforwords.com
Superintendent’s Role Development of needs-based budget Compensation decisions
Date requirements
What LCPS does…. 10
School Board Role Sometimes direction to Superintendent on priorities Public hearings (formally advertised)
Public input (community info) Submission to local governing body
What LCPS does…. 11
Local Governing Body Role Fiscal guidance? Appropriation – lump sum or state category?
It’s all about relationships….
What LCPS does…. 12
Budget Development: Key Players Board of Supervisors School Board
Superintendent Senior Staff Department of Business and Financial
Services School Administrators Parents and School Community Education Association 13
Standard Budget Reports Budget reports
Trend data Comparisons with previous year Explanations of changes – cost of
salaries Enrollment projections Peer comparisons
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FINANCE
Finance School activity funds Finance committee School operating fund
Where the money goes How to monitor? Financial reporting
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School Activity Funds Basic principles
Funds used for purpose collected Projects shall contribute to educational experience Funds derived by student body used for student body Students encouraged to participate in management
Funds managed with sound business practices
Note no oversight responsibility of PTAs/PTOs/Boosters 17
Finance Committee Contracts/Procurement
Virginia Public Procurement Act (VPPA)
Sanctions significant School Board policy Competition thresholds
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Standard Finance Reports Monthly financial reports
Reporting by state category Quarterly financial reports
Expenditure and revenue summary Expenditure detail (by Dept, by
Program, by Subobject)
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LCPS Monthly Report- State Category ex. State Category Operating Fund
Original Budget
Revised Budget
Actual
$540,362,397
$560,301,189
$443,090,286
$117,210,903
79.08%
$34,590,145
$38,420,337
$34,496,855
$3,923,482
89.79%
$2,308,489
$4,224,570
$3,059,755
$1,164,815
72.43%
Operation & Maintenance
$65,840,169
$64,436,188
$55,227,551
$9,208,636
85.71%
Pupil Transportation
$52,466,940
$53,052,165
$39,733,172
$13,318,993
74.89%
Technology
$25,277,522
$30,838,772
$22,709,099
$8,129,674
73.64%
$0
$7,434,609
$7,434,609
$0
100.00%
$720,845,662
$758,707,831
$605,751,327
$152,956,504
79.84%
$24,034,272
$24,034,272
$18,318,973
$5,715,299
76.22%
$744,879,934
$782,742,103
$624,070,300
$158,671,803
79.73%
Instruction
Admin, Attend & Health Facilities
Debt Service & Fund Transfers Fund Subtotal
Balance Expended
Food Service Fund Food Services TOTAL
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LCPS Quarterly Report – Summary ex. Expenditures Salaries Employee Benefits Contractual Services Internal Services Utilities Communication Insurance Materials, Supplies Training and Mileage Continuing Education Leases & Rentals Ops & Maintenance Capital Outlay Transfer Out Total Expenditures
FY Budget $443,907,086 $173,175,217 $20,616,004 $11,873,258 $16,236,799 $3,145,404 $1,460,919 $26,103,487 $1,820,412 $548,042 $536,484 $8,500 $1,843,271 $5,168,683 $706,443,566
Revenue County State Federal Other Appropriated Fund Bal. Total Revenue
FY Budget Revenue Received $470,818,084 $470,818,084 $196,451,138 $140,960,915 $120,000 $171,602 $5,654,344 $4,607,493 $33,400,000 $33,400,000 $706,443,566 $649,958,094
Projected Change to Fund Balance @ June 30
Expenditures Encumbrances Current Balance % Spent $283,244,196 $0 $160,662,890 64% $122,025,112 $0 $51,150,105 70% $13,282,156 $3,440,205 $3,893,643 81% $7,269,088 $0 $4,604,170 61% $8,340,677 $14,400 $7,881,722 51% $1,932,485 $5,476 $1,207,443 62% $1,230,325 $0 $230,594 84% $15,871,987 $1,654,404 $8,577,095 67% $1,016,703 $30,253 $773,456 58% $350,468 $1,385 $196,189 64% $371,729 $34,946 $129,809 76% -$24,748 $0 $33,248 -291% $342,180 $69,984 $1,431,107 22% $5,168,683 $0 $0 N/A $460,421,041 $5,251,053 $240,771,471 66% Current Balance % Rec. $0 100% $55,490,223 72% -$51,602 143% $1,046,851 81% $0 100% $56,485,472 92%
Projection $149,830,464 $47,980,520 $3,493,643 $4,604,170 $5,261,722 $1,147,443 $230,594 $8,577,095 $583,456 $196,189 $129,809 $33,248 $1,431,107 $0 $223,499,460
Balance $10,832,426 $3,169,585 $400,000 $0 $2,620,000 $60,000 $0 $0 $190,000 $0 $0 $0 $0 $0 $17,272,011
Projection
Balance
$0 $62,490,223 -$51,602 $1,046,851 $0 $63,485,472
$0 $2,953,903 $0 $0 $0 $2,953,903
$20,225,915
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VSBA Quarterly Report – Detail ex. E xp en d itu re L in es
C o lu m n A
C o lu m n B
C o lu m n C
C o lu m n D
C o lu m n E
C o lu m n F
C o lu m n G
O rg .
B u d g et
R evised
E xp en d .
A d d . E st.
E st. E xp en d .
D ifferen ce O rig .
A p p ro ved
A d ju st
B u d g et
Y ear-to -D ate
E xp en ses to
07-08
E n d o f Y ear
B u d g et 07-08
07-08
07-08
______________
___________
______________
C o lu m n H
B ased o n D ate B u d g et an d E st. o f R ep o rt
E xp .
__________ _____________ ___________ ____________ ____________
% D iff
C o lu m n I D o llar
O rig . B u d g et D iff R ev. B u d et N ew E st.
an d N ew E st.
_________
___________
Instruction Teacher S alaries
$266,303,358
$6,875,890
$273,179,248
$80,812,228
$188,948,433
$269,760,661
Librarian S alaries
$6,971,110
$42,265
$7,013,375
$2,371,251
$4,554,358
$6,925,609
($45,501)
99.35%
($87,766)
G uidance S alaries
$10,627,977
$19,863
$10,647,840
$3,441,603
$7,072,989
$10,514,592
($113,385)
98.93%
($133,248)
$5,569,744
$79,277
$5,649,021
$1,904,813
$3,673,516
$5,578,329
$8,585
100.15%
($70,692)
$289,988
$0
$289,988
$120,828
$169,160
$289,988
$0
100.00%
D irectors
$1,012,977
$0
$1,012,977
$422,071
$590,906
$1,012,977
$0
100.00%
P rincipal S alaries
$8,793,449
$47,745
$8,841,194
$3,621,924
$5,108,631
$8,730,555
($62,894)
99.28%
($110,639)
$11,865,702
$18,717
$11,884,419
$4,615,903
$7,116,165
$11,732,068
($133,634)
98.87%
($152,351)
$6,827,001
$68,340
$6,895,341
$2,873,355
$3,935,697
$6,809,052
($17,949)
99.74%
($86,289)
Ins. A sst. S alaries
$24,447,863
$229,670
$24,677,533
$5,942,650
$18,413,391
$24,356,041
($91,822)
99.62%
($321,492)
S ecretary S alaries
$14,564,177
$26,170
$14,590,347
$5,339,507
$9,068,255
$14,407,762
($156,415)
98.93%
($182,585)
S ubstitute S alaries
$13,009,486
$10,977,559
$2,740,885
$8,099,300
$10,840,185
($2,169,301)
83.33%
($137,374)
S upplem ental P ay
$4,430,768
$4,570,797
$1,502,291
$3,011,307
$4,513,598
$82,830
101.87%
($57,199)
($40,562)
99.86%
$0
$1,227,003
102.31%
$1,162,313
P sychologists A sst. S uperintendent
A sst. P rin. S alaries C oord. S alaries
($2,031,927) $140,029
F IC A
$28,533,667
($40,562)
$28,493,105
$8,451,041
$20,042,064
$28,493,105
VRS
$53,086,372
$64,690
$53,151,062
$17,725,014
$36,588,361
$54,313,375
Legal S ervices
$3,457,303
101.30%
($3,418,587)
$0 $0
$207,064
$0
$207,064
$44,611
$162,453
$207,064
$0
100.00%
$0
$48,245,662
$87,664
$48,333,326
$17,718,419
$30,614,907
$48,333,326
$87,664
100.18%
$0
Life Insurance
$3,985,553
$27,677
$4,013,230
$1,077,355
$2,935,875
$4,013,230
$27,677
100.69%
$0
O ther Insurances
$1,182,167
$3,786
$1,185,953
$1,144,706
$41,247
$1,185,953
$3,786
100.32%
P urchased S ervices
$6,002,860
$2,979,239
$8,982,099
$4,711,323
$4,083,308
$8,794,631
$2,791,771
146.51%
($187,468)
Tuition
$3,006,096
M edical P rem ium s
P rinting O ffice S upplies E ducational S upplies M edia S upplies Textbooks E quipm ent
$2,954,096
$1,573,849
$1,318,591
$2,892,440
($113,656)
96.22%
($61,656)
$57,847
$62,904
$120,751
$62,577
$55,654
$118,231
$60,384
204.39%
($2,520)
$186,504
$98,244
$284,748
$142,360
$136,622
$278,982
$92,478
149.58%
($5,766)
$26,094,153
$3,208,038
$29,302,191
$16,949,076
$11,759,737
$28,708,813
$2,614,660
110.02%
($593,378)
$636,534
$127,784
$764,318
$526,820
$222,020
$748,840
$112,306
117.64%
($15,478)
$4,945,916
$499,645
$5,445,561
$3,682,417
$1,652,870
$5,335,287
$389,371
107.87%
($110,274)
$1,590,858
$256,380
$1,847,238
($437,697)
80.84%
($62,799)
101.37%
($4,635,248)
$2,284,935 ______________ S u b -T o tal
$553,168,930
($52,000)
$0
($374,898) ___________ $12,208,250
$1,910,037 ______________ $565,377,180
__________ _____________ ___________ ____________ ____________ $191,109,735
$369,632,197
$560,741,932
$7,573,002
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EXPENDITURES
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LCPS School Operating Fund Where the money goes All other costs 12%
Salaries & benefits 88%
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Fund Balance/Surplus/Savings Coming soon to a Local Governing Body meeting Important issue facing School Boards across the
Commonwealth Why it happens and why it matters
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Why it happens and why it matters What is lapse and turnover? Fluctuations of budget to actual Position lapse and turnover CAUTION, CAUTION Only flexibility the division has…
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How To Address It Budget a large negative number Make assumptions for vacant / new positions
Other variables Predicting human behavior
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Surpluses Come From Savings Surpluses are not a surprise All school division’s budgets should have unspent
funds School divisions cannot exceed their appropriations
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REVENUE
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LCPS - Where the money comes from FY 2013 Carryover Local/County Funding State Revenue Federal Funds Other Funds Total State
Amount ($ in millions) $10.0 $528.0 $250.1 $14.1 $6.9 $809.1
30.9% Local/County 65.3% 30
Local/County Funding 60.0%
50.0%
47.7%
47.2% 43.7%
42.2%
39.7%
40.0% 34.6% 30.9%
30.8% 30.0%
20.0%
10.0%
0.0% Alexandria City
Arlington County
Fairfax County
Falls Church City
Loudoun County
Manassas City
Manassas Park City
Prince William County
Source: FY 2012 WABE Guide Tax Rate Value of 1¢
$1.235 per $100 of assessed value $8.0 million
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State Funding & the Local Composite Index • • •
Components True Value of Property Adjusted Gross Income Taxable Retail Sales
LCPS LCI - .5666
Source: DOE website
According to the LCI, locally we should be able to pay for about 57 percent of the costs of education and the Commonwealth should pick up 43 percent. 32
Sales Tax Calculation Weldon Cooper July 2010 Weldon Cooper LCPS LCPS Percentage Sales tax statewide Education share 1.125%
1,569,153 77,491 4.938%
Basic Aid Calculation Adjusted ADM (K-12) 66,814 State per pupil amount $5,594 Total $373.8 million
$106.9 billion
Less sales tax
($59.3 million)
$1.2 billion
Total Basic Aid
$314.5 million
LCPS percentage
4.938%
Sales tax funding
$59.3 million
State share State funding
.4334 $136.3 million
OTHER STUFF
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Other Stuff You Should Know Misinformation Simplify, simplify, simplify
Strategies to cut spending
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Misinformation
VIDEO from Saturday Night Live Gilda Radner and Chevy Chase “Violins on Television” Can be found at Hulu.com
The Things I’ve Learned…. The media sometimes gets it wrong If your version isn’t out there, it doesn’t exist.
Tell the story better Everyone has to help
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Simplify, Simplify, Simplify What kind of information do employees need? What can be easily understood?
The right data will tell your story. Peer comparisons Pupil/teacher ratios
Cost per pupil Compensation packages School-based and non-school based positions
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Strategies to Cut Spending Last in first out
Reduce staffing greater than SOQ Review current vacancies Reduce extended contracts Increase class size Healthcare co-pays and deductibles
Reduce employer share of healthcare Defer equipment replacement plans Mid-year salary enhancements Increase fees Selective elimination of programs
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QUESTIONS?
[email protected]
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