Transcript No Slide Title

October 28, 2010
October 28, 2010
January 21, 2010
October 28, 2010
1
October 28, 2010
Total Budgetary Appropriations
• Governmental Funds
–
–
–
–
General Fund
Special Revenue
Debt Service
Capital Renovation
$1,533,283,498
$ 341,016,845
$ 208,616,298
$ 224,000,000
• Enterprise Funds
– Food Service
– Other Enterprise Funds
$ 111,834,796
$ 12,068,784
• Internal Service Funds
– Health Insurance
– Worker’s Compensation
– Other Internal Service Funds
•
$ 139,744,988
$ 15,822,490
$
20,398,169
Additionally the district is responsible for several fiduciary funds
2
October 28, 2010
The Financial Governance Pyramid
HISD Administrative
Regulations
HISD Board Policy
TEA Regulations
Texas State Statutes
Federal Regulations
Governmental Accounting Standards Board (GASB)
3
October 28, 2010
Internal Controls—What and Why????
• Safeguard assets
• Ensure validity of financial transactions and financial reporting
• Promote adherence to policies and procedures
• Improve effectiveness and efficiencies of operations
• Ensure employee turnover will not disrupt operations
4
October 28, 2010
Internal Controls-Best Practices
By the Governing Body:
– Create strong internal audit function
– Implement rigorous external audit requirement
– Require rotation of external auditors
– Require a board audit committee
– Adopt control related policies
By the Central Administration:
– Develop and implement control related procedures
– Implement risk assessment policy
– Develop & implement formal accounting and reporting procedures
Source: Governmental Finance Officer’s Association
5
October 28, 2010
Board of Education Policies-Financial Operations
CAA– FINANCIAL ETHICS
– Fraud and Financial Impropriety
– Financial Controls and Oversight
– Fraud Prevention
– E-Rate Compliance Policy
– Code of Silence
CDA– CASH MANAGEMENT AND INVESTMENT POLICY
– Annual Review and Resolution
– Annual Compliance Audit
– Investment Officer Training
– Quarterly Reporting
– External Investment Committee
6
October 28, 2010
Board of Education Policies-Financial Operations
CE–ANNUAL OPERATING BUDGET
– Budget Adoption
– School Policy Carryover
– Mid-Year Reporting
CFA– FINANCIAL REPORTS
– Annual Financial Report
– Single Audit Report
– Schools FIRST Management Report
CA– DEBT MANAGEMENT
– Debt Management Policy
– Financial Management Policy-Reserve for Operations
7
October 28, 2010
Chief Financial Officer
8
October 28, 2010
Role of the Chief Financial Officer
•
Advise the Board of Education, Superintendent of Schools and senior staff on
financial matters
•
Continuous improvement in financial reporting to ensure transparency of financial
information to the public
•
Oversee investment practices for over $1 Billion of revenues
•
Oversee the development of the annual operating budget for all funds of the district
•
Develop debt structure for issuance of bonds; seek opportunities to refund
outstanding debt and maintenance of bond ratings
•
Provide strategic direction for improvement of financial procedures for all schools
and operating divisions
9
October 28, 2010
Finance Division – Awards & Ratings
Distinguished Budget Presentation Award
18 years
Certificate of Achievement for Excellence in Financial
Reporting (CAFR Program)
36 years
Meritorious Budget Award
11 years
Certificate of Excellence (COE) in Financial Reporting
22 years
Superior Achievement Rating
8 years
Texas Comptroller Leadership Circle
1 year
The National Institute of Governmental Purchasing
3 years
10
October 28, 2010
Controller’s Office
11
October 28, 2010
Controller’s Office - Facts
ACCOUNTS PAYABLE
• Process payments for more than 9,000 active
vendors.
• Process over 8,000 prepaid travel requests
and employee reimbursements.
• Print approximately 300 checks daily.
BOND FUND ACCOUNTING
GENERAL FUND ACCOUNTING
• The General Fund is the District’s principal
•
•
•
•
• Manage financial accounting for all capital
project funds, including the current 2007
Facilities Capital Program totaling $1.045
billion.
• Ensure that project funding is balanced,
new contracts are appropriated and
encumbered, and funds are expended
consistent with established budgets.
• Process payments to contractors,
architects, engineers, and other constructionrelated vendors.
• Provide information to bonding companies,
contractors, subcontractors, taxpayers, and
government agencies.
INTERNAL SERVICE FUND ACCOUNTING
• Manage accounting for the printing and
•
•
•
•
ENTERPRISE FUND ACCOUNTING
• Manage the accounting for a $91.7 million
Food Service operation for the breakfast
and lunch programs, including monthly
profit-and-loss accounting by school.
• Manage the accounting for a $10.6 million
Medicaid Dept. of special reimbursement
programs.
• Manage accounting for revenues of $12.8
million generated by the Business
Development operations of the District’s
Marketing Office.
fund, accounting for the majority of operating
expenditures and related revenues.
Consulting/Contract Clearinghouse.
Expenditure transfer requests.
School and third-party receivables
(tuition, grants, insurance settlements, etc.)
Monthly balancing and reconciliation of
general fund and property taxes.
distribution activities of the Print Shop’s
four locations.
Manage accounts for the Health Insurance
plan administered by the District.
Manage account for the District’s Workers’
Compensation program.
Manage accounting for fee-for-service
operations, scholarship funds, and special
activity accounts.
Process Student Activity Funds transactions
and reconcile bank accounts for secondary
schools.
PAYROLL
• Process b i-weekly payroll for 30,000
employees.
• Process deduction billings for more than
100 different payroll vendors.
• Process direct deposits and garnishments.
• Process retirement paperwork and leave
payouts for retirees.
PROPERTY MANAGEMENT
• Manage accounting for $3.8 billion in fixed
assets, including land, buildings, construction
in progress, equipment, vehicles, and
furniture.
• Review and process monthly acquisitions,
retirements, transfers, and depreciation
entries.
• Coordinate, review, and process physical
inventories of fixed assets for schools and
departments.
SPECIAL REVENUE ACCOUNTING
• Manage accounting for more than $300
million designated-purpose grants
received from federal, state, and local
agencies totaling in excess of $300 million
annually for the purpose of accomplishing
specified educational tasks.
• File over 100 monthly and quarterly financial
reports to grantor agencies.
• Monitor fund balances and revenue
collections.
• Audit and process external billings submitted
for reimbursement.
TREASURY
• Manage District debt service comprising over
$2.4 billion in debt principal outstanding.
• Manage Investment of District funds with an
average balance of $1.5 billion.
• Manage cash and liquidity averaging
over $1.1 billion in transactions per month.
• Receipt and deposit cash and checks
totaling $45 million annually.
• Report payroll and sales tax.
• Manage primary banking relationships.
12
October 28, 2010
Controller’s Office
13
October 28, 2010
Controller’s Office – Budget & Funding Sources
• Current Annual Budget - $5.2 M
– Personnel & Benefits - $4.97 M
– Operational Cost - $.23 M
• Funding Sources
–
–
–
–
General Fund - $2.95 M
Special Revenue - $.71
Capital Projects - $.66
Food Service & Internal Service Funds - $.88 M
Funding Sources
Current Budget
$13,476
$12,700
$65,526
$152,266
$13,697
6100 Payroll & Benefits
$27,919
$106,706
$105,177
$655,686
$645,852
CP1
FD1
GF1
6200 Contract Services
6300 Supplies
$710,976
IS1
$2,948,894
IS2
6400 Other Operational
$4,970,497
6600 Capital Outlay
14
October 28, 2010
Controller’s Office – Key Accomplishments
•
Compliance Controls
– Fully implemented Phase I of the Governance, Risk Management &
Compliance (GRC) software platform.
•
Treasury Controls
– Implemented twice daily current day review of account activity
– Implemented machine registration at Chase
– Implemented Post No Check service on non check issuance accounts
– Implemented “Virtual PC” system
– Developed of a Treasury Procedures Manual
15
October 28, 2010
Controller’s Office – Key Accomplishments – Cont.
•
Met quarterly reporting requirements for ARRA Section 1512 Reporting
•
Implemented tracking of personal discretionary leave, assuring employees use
state and local personal leave in the manner as mandated in Board Policy –
DEC (LOCAL).
•
98% of Staff participated in 8 hours or more of job related professional training
– Seminars
– Webinars
– Online Training
•
Participated in pilot of 2009-2010 ePerformance appraisals
•
Reduced school receivables by 26% when compared to FY2009.
•
Developed Procedures Manual for School and Department Closures.
•
Successfully conducted four (4) In-Service – Activity Funds Training for
Schools financial staff
16
October 28, 2010
Controller’s Office – Key Accomplishments – Cont.
•
Launched Pilot Project – to streamline the centralized activity funds operation
overall deposit recap process
•
Developed and implemented a business process for the four replacement
construction projects funded by the Public Facility Corporation.
•
Developed a key word index consultant and contract payment database, linking
key words to the corresponding consultant agreement or contract.
•
Implemented scanning of financial documents
•
Facilitated the reduction of the projected $13M loss to $5.9M.
─ Monitor food cost reduction through inventory control.
─ Help implement the “flex hours” program introduced by Aramark
─ Developed and implemented an electronic budget template Food
Service to improve the timeliness, efficiency, and effectiveness of
budget to actual variance reporting, aligned with the district’s budget
office allocation methodologies
17
October 28, 2010
Controller’s Office – Efficiency & Effectiveness Projects
•
Develop and implement a new capital improvement structure for establishing
budgets, recording commitments, and reporting financial information to upper
management, oversight committees, and outside organizations.
•
Implement the recommended organizational changes by the Council of Greater
City Schools for the Finance component in the Construction Services
Department.
•
Host the following activity fund in-service:
Elementary Schools
Secondary Schools
New Principal
•
Implementing new work flow process:
•
School Pilot Program - Phase II – cash deposits and internal transfer of funds.
18
October 28, 2010
Controller’s Office – Efficiency & Effectiveness Projects – Cont.
•
Research alternative business process to further enhance accounts
payable automation.
•
Develop a tool to consolidate grant/financial status data into a
report for internal and external customers
•
Perform fixed asset spot check audits at a least 25% of all district
locations.
•
Implement the new production planning module to affect a proper
planning and utilization of inventory.
•
Develop and implement a cafeteria cash audit procedure.
•
Implement a web based solution to accepting payments (credit and
debit cards) for various District initiatives.
•
Initiate review of District payment methodologies for increased
efficiency and reduction of costs through electronic payment
systems (i.e. ACH, wires, payment by check).
19
October 28, 2010
Budget & Financial Planning Division
20
October 28, 2010
Budget & Financial Planning - Facts
SCHOOL BASED BUDGETING

Develop, implement and monitor
annual budgets, totaling over $800
million.

Provide budgetary support to for over
300 schools and 24 School
Improvement Officers.

Process over 5,000 position
management actions annually to
facilitate, control and monitor staffing
changes at the campus level.





BUDGET TRAINING


Conduct six bi-annual district wide
workshops related budget coding,
position management, and general
information topics to principals,
business managers and financial
support staff.
Conduct over 200 school visits a year
to assist, consult, and trouble-shoot
fiscal, staffing, and operational
deficiencies.
Conduct annual Comparability
Compliance test, calculate Excess
Costs and other functional categories
to ensure fiscal compliance.
Prepare and present for adoption by
the Board of Trustees the Resource
Allocation Handbook used for campus
budget development.
Prepare campus model budgets when
new programs are being considered
for cost impact and other
management reports requested for
programs evaluation.

BUDGET OPERATIONS

Develop, implement and monitor
annual budgets, totaling over $2.3
billion.

Develop alternate delivery methods of
training:
o Online modules
o Webinars
o Video presentation
Provide budgetary support to for over
140 Departments, 7 Internal Service
Funds, 3 Enterprise Funds and all
district wide programs.

Process all district position
management actions in accordance
with district policy and procedure and
budgetary constraints
Work with all Finance Divisions on
development of training opportunities

Monitor, validate and process
corrections to district payroll for
submission to the SAP finance
system.

Submission of required PEIMS
reports and other Texas Education
Agency report for compliance with
state law.

Prepare annual state and local
revenue projections and prepare
Truth-in-Taxation calculations and
notices required by state law.
Prepare and Present Budget Training:
o Budget Development
o Managing Your Budget
 Campus Level
 Departmental
SPECIAL REVENUE BUDGETING

Develop, implement and monitor annual
budgets, totaling in excess of $300 million
annually for more than 300 specific
purpose grants received from federal,
state and local agencies.

Monitor expenditures for compliance to
grant requirements and timelines.

Process position management actions
and validate compliance with approved
grant positions.

Prepare annual budget book,
budgetary updates, and financial
surveys.

Prepare management reports to facilitate
timely expenditure of grant funds.

Maintain SAP and PeopleSoft
account code master data.

Assist with all federal and state audits of
grant budgets and expenditures.

Special projects as requested by the
internal and external sources.
21
October 28, 2010
Budget & Financial Planning
22
October 28, 2010
Budget & Financial Planning – Budget & Funding Sources
• Current Annual Budget - $2.2 M
– Personnel & Benefits - $2.12 M
– Operational Cost - $.08 M
• Funding Sources
– General Fund - $1.8 M
– Special Revenue - $.39
– Food Service & Internal Service Funds - $.01 M
Current Budget
$19,862
Funding Sources
$398,518
$30,842
6100 Personnel &
Benefits
$29,944
$25,475
$27,948
FD1
6200 Contract
Services
GF1
6300 Supplies
$2,122,207
IS3
SR1
6400 Other
Operating
$1,750,914
23
October 28, 2010
Budget & Financial Planning – Key Accomplishments
• Adoption of 2010-2011 budget on time
• Full implementation of ARRA Stimulus fund budgets
• Participated in performance management scorecard & eperformance pilot programs
• Successful transition of budget from 5 regional offices to 3 school
level departments
• Developed additional training module for campuses: “How to
Manage Your Budget”
• Successful recapture of TIRZ state revenue for 2006-2007 thru
2008-2009
• Identification of maintenance of effort issues and potential savings
24
October 28, 2010
Budget & Financial Planning – Efficiency & Effectiveness Projects
• Online Position Management Process
• Redesign of Authorized Position Report
– Improved vacancy monitoring
– Improved timeliness of information
• Expanded Training Opportunities
– Online Modules
– Webinars
– Video
• Online Federal Time & Effort Tracking Process
• Expansion of Adopted Budget Book – Campus Data
25
October 28, 2010
Procurement Division
26
October 28, 2010
Procurement Services – Facts & Figures
PROCUREMENT
PROCARD
• Processed 127,700 purchase orders (PO’s)
• Average lead-time to process a purchase requisition:
5 business days
• Conducted 155 Annual Bid projects
• Facilitated 130 Cross Functional Procurement
Teams
• 36 Spend Categories with 375 Product
Classifications
• Leveraged Acquisitions = Cost Savings
• Created district wide newsletter - “BuyLines” as
method of announcing bid vendors
• Total number of PROCARDS in use: 1,374
• Total number of PROCARD transactions:
118,281
• Total dollars spent on PROCARDS: $20,107,217
• Conducted 6 training sessions a year
• Annual review of merchant code categories
• Daily audits of previous day transactions
• Monthly review of PROCARD transaction
receipts
• Publishes quarterly “ProCents” Newsletter
highlighting cardholder policies
TRAVEL
• Total number of travel requisitions processed: 3,381
• Average lead-time to process a travel requisition: 5
business days
• Provide on-going Travel training
• Negotiated discounts with airlines and rental cars
27
October 28, 2010
Procurement Services
Houston Independent School District
ORGANIZATION, OCTOBER 2010
General Manager
Procurement Services
Procurement Services
General Manager
Stephen M. Pottinger
Business Operations
Team Leader
SRM Catalog Content
Administrator
1 FTE
1 FTE
Customer Service
Representative
SRM Designer
1 FTE
1 FTE
General Clerk III
1 FTE
Procurement
Manager
7 FTE
Senior Buyer
PROCARD
Representative
7 FTE
4 FTE
Buyer
General Clerk II
Travel Service
Representative
9 FTE
Position funded through the
Facilities Bond Program Capital
Projects
Food Services Funds (FD1)
2 FTE
28
October 28, 2010
Procurement – Budget & Funding Sources
• Current Annual Budget - $2.6 M
– Personnel & Benefits - $2.4 M
– Operational Cost - $.2 M
• Funding Sources
– General Fund - $2.28 M
– Capital Projects - $.08
– Food Service - $.24 M
Current Budget
$44,009
Funding Sources
$3,200
$43,000
$129,804
$84,195
6100 Payroll &
Benefits
$255,740
CP1
6200 Contract
Services
FD1
6300 Supplies
GF1
$2,401,597
6400 Other
Operational
6600 Capital
Outlay
$2,281,674
29
October 28, 2010
Procurement Services – Key Accomplishments
• Re-engineered spend categories (material groups)
• Documented and flow-charted major business processes
• Customer service initiative
– Developed “How To Do Business With Houston ISD” brochure
– Developed desk reference manual for campus administration
• Staff Training – National Institute Governmental
Purchasing webinars
• Developed supplier scorecard
• Implemented annual proposal calendar
30
October 28, 2010
Procurement Services – Efficiency & Effectiveness Projects
• Launch supplier relationship management (SRM) catalog
shopping for schools
• Obtain professional certification all managers
• Host supplier fairs for each commodity team
• Conduct customer satisfaction surveys
•
Focused MWBE outreach
October 28, 2010
Procurement Services – Supplier ScoreCards
32
October 28, 2010
Procurement Services – Annual Proposal Calendar
33
October 28, 2010
Finance & Procurement Key Performance Indicators
34
October 28, 2010
Key Performance Indicators
• Controller’s Performance Management
Scorecard Fall 2009
• Budget Department Performance
Management Scorecard Spring 2009
• Association for Financial Professionals
Benchmark
• Council Great City Schools Key Performance
Indicators
• Departmental Dials
35
October 28, 2010
Challenges and Risks
•
•
•
•
•
•
•
Decentralization
Size of the district
State funding
Health insurance reform
Unfunded mandates
Competition “School Choice”
Loss of local control
36
October 28, 2010
QUESTIONS & COMMENTS
37