Transcript O’Fallon Township High School District 203

Budgeting Revenues &
Expenditures: Tips and Tools
May 2010
Presenters: Nikita Johnson and David Bein
Topics for Discussion
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Purpose of a Budget
Budget Philosophies
Budget Calendar and Assumptions
Budgeting Revenue
Budgeting Expenditures
Reminders
Common Problems
Budget Purpose
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Satisfies a minimum level of financial/program
information for state, local and federal
governments
Provides both expending and taxing authority
Meet requirements imposed by Illinois law
Estimate of revenues and expenditures
Provides a tool to measure fiscal performance
Plan to accomplish the financial goals of BOE
Budget Philosophies
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Business as usual
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Zero Based
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Start from scratch each year
A lot of work
Site Based
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Add a pre-determined percent increase to previous year
Be very careful
Gives authority and responsibility to those making decisions
Possible inequities throughout district
Combination of the above
Budget Calendar and Assumptions
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Start with assumptions on key budget drivers
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State and federal government budget projections
Tax cap, if applicable
Salary increases
CPI increase
New, changed or dropped programs (e.g., RTI)
Staffing
Non-routine expenditures (e.g., textbooks, uniforms)
Technology
Capital projects/expenditures
Budget Calendar and Assumptions
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Work backward from your due dates to figure out when
you need to have key tasks completed.
A typical plan might be:
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Final budget in September
Tentative budget 30 days before in August
Near final budget in July, headcount revised
Department budgets due in May
Department budgets distributed in March
Budget plan distributed in January
And just when you think you’ve got it all set, don’t forget
that if you’re doing an amended budget it is due by the
end of June, with a presentation the month before!
Budgeting Local Revenue – 1000 Accts
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Property Taxes
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Usually the largest source of revenue State-wide
EAV (& new const. in capped districts) must be estimated
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Talk to county and township officials for estimates
Talk to clerk regarding actual extensions
Talk to Treasurer for tax distribution dates
CPI
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Determine the rate to be used for the Tax Levy
Keep record of historical rates
TOOL: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt
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Budgeting Local Revenue – 1000 Accts
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CPPRT
Distribution from Illinois Dept. of Revenue
 Offsets GSA for all but Flat Grant Districts
 Beware of decreases for next year
TOOL:
http://www.revenue.state.il.us/LocalGovernment/replacemnt1
0.htm
Interest on Investments
 Knowledge of investment practices
 Estimates of anticipated cash surpluses and interest rates
TOOL: http://www.federalreserve.gov/releases/h15/current/
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Budgeting Local Revenue – 1000 Accts
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Food Service
Tie to enrollment changes
 Be aware of any program and/or price changes
 Reimbursement rates change annually
TOOL: http://www.isbe.net/nutrition/htmls/data.htm
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Textbook Rentals and Fees
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Rentals
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Need to know collection rates
$1 increase usually does not mean an additional $1
Outside organizations
Ed or O&M fund
Budgeting State Revenue – 3000 Accts
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General State Aid
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Largest state revenue
Watch ADA
Foundation level
Download state form
Compare estimate to prior years’ for reasonableness
Obtain GSA estimator from ISBE
Pay attention to what is happening at the State level regarding
reductions
TOOL: http://www.isbe.state.il.us/funding/html/gsa.htm
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Budgeting State Revenue – 3000 Accts
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Special Education
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Usually second largest source of state funding
Be aware of:
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Enrollment
New mandates
Reimbursement levels
State budget and changes to legislation
Talk to Director of your program (in house and/or coop)
Budgeting State Revenue – 3000 Accts
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Pupil Transportation
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Regular and Special Ed
Understand your district’s relationship between expenditures and
percentage of reimbursement
Other
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Categorical and Grant Programs
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Have a knowledge of when claims and/or disbursements are made
Use FRIS
Be aware of past audit findings
Watch out for Appropriations & Prorations
TOOL: http://www.isbe.net/funding/pdf/sped_appro_pro.pdf
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Budgeting Federal Revenue – 4000 Accts
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Difficult to forecast and budget
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Review historical trends
Know the program or population being served
Federal Grants are potentially difficult to budget
because of the timing of approvals
For FY11 – be mindful of ARRA carryover, if any
American Recovery & Reinvestment Act
(ARRA)
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Formula/Existing Grants
 Rules for existing grants generally apply for ARRA funds.
State Fiscal Stablization Funds (SFSF)
 Used for some 2009 and 2010 GSA payments.
Competitive Grants
 Race to the Top
 Title II-D (technology)
Be careful with supplement vs. supplant rules.
New revenue codes are required for tracking revenues and
expenditures.
TOOL:
http://www.isbe.net/rules/archive/pdfs/23IAC100EmergAmnd_Code.p
df
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Budgeting Expenditures – General knowledge
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Review assumptions on key budget drivers, make
additional assumptions and collect other expense
related information, including:
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Current and projected enrollment
Current and projected number of employees
Status of negotiations
Current fiscal year – year to date results
Limitations imposed by revenue projections
TIP: Keep a reference list of your assumptions
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Budgeting Expenditures - Salaries
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Largest portion of expenditures
Forecast each employee group separately, knowing
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Salary schedules
Employee counts / FTE
Turnover rates
Retirements
Early retirement incentives
Lane change costs
Budgeting Expenditures - Salaries
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Drives other costs, such as
 IMRF fund benefits
 Life & long term disability insurance
TIP: Avoid using a fixed percentage to save time—salaries are your largest
expense and it’s worth the time to analyze in detail.
TIP: Review TRS retirees past earnings history to determine whether you
may be subject to a penalty.
TOOL:
http://trs.illinois.gov/subsections/employers/calculators/ExcessSalIncrC
alculator.aspx
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Budgeting Expenditures - Benefits
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IMRF fund
 Social Security – 6.2%
 Medicare – 1.45%
 Pension contribution – employer specific
TRS / THIS
 .58% / .63% of certified payroll
 9.4% member contribution – how is this paid?
 .84% THIS member contribution – how is this paid?
TIP: If possible, try not to charge salaries to federal grants (tentative FY11
employer contribution is 25.12%); ARRA SFSF money can be used for
salaries without paying the TRS contribution for federally funded
salaries.
TOOL: http://trs.illinois.gov/subsections/employers/employerservices.htm
TOOL: http://www.imrf.org/pubs/er_pubs/booklets/employer_rates.pdf
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Budgeting Expenditures - Benefits
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Health / Dental
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Usually fastest increasing portion of budget
Difficult to contain—work with your insurance
committee to minimize increases
Life & long term disability
Tuition reimbursement
ERO employer contributions
TRS 6% cap penalties
Budgeting Expenditures – Other
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Purchased Services, Supplies & Materials, Capital
Outlay, Other Objects, Tuition
Variety of methods to project costs
Status quo
 Flat increase
 Per capita allocation/linked to enrollment
 Zero-based/Building/department requests
TIP: Spend grant money first
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Reminders
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Justification / Assumption / Rationale should be
available to support budget when presented
Be ready to explain large increases / decreases in
line items
The budget is an estimate and should not be
expected to come out to the penny – but be ready
to explain large variances in line items
Up to 10% of the budgeted amounts in each fund
can be transferred to other line items in the same
fund
Reminders
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Expending more than the budgeted total requires
the adoption of an amended budget
Use account numbers that are consistent and in
line with the updated IPAM
Provision for Contingency can be very helpful as
many surprises can happen during the year
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Do not use this account for recording expenses
Transfer budget dollars to appropriate account
TOOL: http://www.isbe.net/finance/htmls/rule_changes.htm
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Common Problems
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Cash flow vs. fund balances
Negative cash/investment balances
Implementation of budgetary controls and
monitoring throughout the fiscal year
Student activity accounts
Other Useful Links
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http://www.isbe.net/finance/default.htm -- ISBE School Finance Page
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Budget Forms
Submit Budget
Mechanics of the School District Budget
Annual Financial Reports
FRIS Inquiry
GSA Inquiry
School District Financial Profile
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www.iasaedu.org Illinois Association of School Administrators
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www.bls.gov
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http://www.tax.illinois.gov/LocalGovernment/RASEST10.pdf CPPRT
http://www.state.il.us/agency/idol/Facts/mw.htm Department of Labor
http://nces.ed.gov/ccd/data_tables.asp IES Education Statistics
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Consumer price index and inflation calculator
Questions?