Transcript COUNTRY CLUB HILLS S.D. #160

Presented by Brenda Burkett and Ann Williams
Brenda R. Burkett, CPA, CSBA
Chief Financial Officer
Norman Public Schools
Norman, OK
7/20/2015
Ann C. Williams, MBA
Treasurer
Bradley Bourbonnais CHSD #307
Bradley, IL
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•Manage Payroll Functions
•Manage Accounts Receivable
•Manage Accounts Payable Process
•Manage Purchasing Procedures
•Manage Annual Budgets
•Prepare Financial Reports
•Manage Cash Flow
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The greatest portion of the price of education is
concentrated in the form of personnel
Education is labor intensive
Personnel costs are the single most expensive
(and most important) item in school budgets
Personnel costs (salary and benefits) make up
70-90% of most school budgets
After estimating enrollment and envisioning
programs, costing out salaries is the next most
important task in successfully balancing
revenues and expenditures
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Enrollment drives staffing
Ability to properly determine staffing needs is a
function of organizing and using information
about the district and its current and prospective
staff
Projections indicating a need for new staff
require budget input
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Hiring decisions must be coordinated with the
budget office, which must find money for salaries
 Must determine if budget constraints will allow for
additional staff to be hired
 If so, consider whether the district should hire
beginning teachers or whether it can afford more
experienced staff
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Employee compensation includes
 Salaries
 negotiated benefits (i.e. teacher’s retirement
and various kinds of insurance)
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Compensation also includes
 employer costs for workers’ compensation
coverage, unemployment insurance, and
social security
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As the hiring decisions are made, and the
staff member’s payroll information is
processed, it is critical that data be correctly
entered into the payroll system
There are many items pertaining to
compensation that must be accurately keyed
into the system, for a person’s pay and
benefits to be correct
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One of the most critical functions of the payroll
office is to ensure that pay tables and deduction
codes are set up and entered correctly into the
software
 It doesn’t matter if you’ve entered the staff
person’s correct pay step into the computer. If
the pay step amount is not correct in the
computer, underpays or overpays will occur.
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Deduction codes and the correct percentages
should be entered and double checked for accuracy
 Retirement payments into the Teachers Retirement
System, and taxes paid to the IRS, are dependent
on accurate percentages being set up in the payroll
software
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Leave Benefits: There is often time away from
the job not deducted from pay, including sick
leave, bereavement leave, and personal leave
 Other Comp: Direct and indirect compensation
such as overtime pay, supplemental salaries,
and performance pay may also occur
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Leave balances available to employees are handled
either by regular accruals, or by days given on an
annual basis or some other benchmark in the
employment process
 A system must be in place for all leave requests so
proper reduction of leave balances occurs, or pay
docks are processed, if no leave is available
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There are many different categories of
employees that work in a school system, and
often their start dates and contract days vary
 Many districts require 10 month employees
receive their annualized pay over 12 months, to
handle monthly insurance premiums or annuity
deductions that continue on a year-round basis
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Summer checks run in June (July and August
checks that are for salaries to be charged in
current fiscal year) will have taxes, retirement
payments and other deductions withheld
 Payment of these deductions require close
supervision to ensure paid in the right month
and paid by certain deadlines
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Payroll oversight entails making sure that
the amounts paid are correct, and that the
benefit calculations are accurately figured
Deduction registers should be scrutinized
for reasonableness
Random sampling should be performed to
check % calculations
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 Verify contract amounts by requiring signature
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annually from all staff members
Audit annual contract amounts
Verify data input from the salary schedule
Verify deductions for benefits, taxes, etc.
Audit every hourly payroll (determine %)
Submit (and evaluate) monthly overtime report to
BOE
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The purpose of Accounts Receivable is to
track revenues that are not yet received by
the District
Procedures should be set in place to
accumulate, categorize, report and control
revenues due the district
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Procedures and practices should remain the same
across time and reports. If differences occur, they
should be due to substantive differences in the
events and conditions reported rather than because
of arbitrary accruals
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The Accounts Receivable function can
provide a method for accruing revenues
earned for a certain period, for consistency
and comparative analysis to that same period
the year before.
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Revenue and Accounts Receivable
applications should be designed with superior
and flexible functionality to generate,
maintain, inquire, collect and report on
revenues earned
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Review student accounts quarterly
Review transportation expenses to ensure
homeless expenses are shared (when
applicable)
Review joint agreement contracts regularly
Track and report oustanding revenue from
previous fiscal years
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Spot check vendor list regularly
Use invoice numbers to prevent duplicate
payments
Scan payments to look for obvious errors
Audit bills that may frequently have errors
 phone bills
 FedEx/UPS
 Attorney bills
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BID or RFP?
Review the bidding process for your state
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Is public notice required?
Require sealed bids
Is a public bid opening required?
Consider the lowest RESPONSIBLE bidder-one who
conforms in all material aspects to the requirements and
criteria set for in the invitation to bid
Consider a Request for Proposals
 Attorneys, architects, auditors, etc
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Vendor relations
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Specifications
Vendor selection
Bid/RFP opening
Bid analysis
Board approval
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Consider electronic purchase order process
Request Net 60 or 45 rather than 30
Inform vendors of board meetings date
Don’t buy out of a catalog until you look
online
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What type of budget works best for your
district?
 Line item
 Function level
 Program based
 Zero based
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What is a zero based budget?
What are the benefits?
Debt reduction plans
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What does “budget” mean to your district?
What is it’s purpose?
Are amendments acceptable? If so, when?
Four elements
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Planning
Receiving funds
Spending funds
evaluating results
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Enrollment Projections
 ADA-average daily attendance (used in IL)
 ADM-average daily membership
 Projection Methods
▪ Trend analysis
▪ Cohort survival
 Personnel Projections
▪ The single most important and expensive resource in
schools
▪ Student/teacher ratio is critical to quality and costs. Why?
▪ Would you use student/teacher ratio to calculate all
positions in a district? Why or why not?
▪ What type of adjustments might be required for small or
large schools?
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Estimating expenditures
 Identify programs and functions
 Determine types and quantities of resources
needed
 Estimate costs of each program or function
 Consider the teacher contract
▪ How much schedule movement can you anticipate?
▪ Is there a new Master’s program in town?
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In order to balance the budget, we must deal
with three types of adjustments
 Budget reductions
 Budget increases
 Budget shifts
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Two types of budget reductions may occur
due to…
 Cost savings through improved efficiencies
 Cost reductions due to program reductions
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Continuum for budget reduction
 Obtain reduced prices for services
 Increase productivity
 Defer spending
 Make across the board cuts
 Eliminate “non-essential” services
 Reduce instructional positions and programs
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Reductions through improved efficiencies
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Energy conservation
Risk management
Purchasing
Privatization
Training for operations/support staff
Deferral of expenditures
Use of more efficient equipment
Early retirement plans
Lower salary increases
Lower cash carryover (working cash)
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Budget reductions due to program reductions
 Reduce instruction staff
 Reduce course offerings
 Reduce support staff
 Reduce non essential services
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Reductions are inevitable, but how can we
increase revenues to avoid cuts?
 Charge for services provided
▪ Facility use by others (pool, auditorium, etc.)
▪ Parking
 Charge for non academic services
▪ Transportation (if not mandated)
 Private sector support
 volunteers
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The budget is “done”, what now?
 Compare budget to “actuals”
▪ Are actual expenditures within the budgeted amount?
▪ How much is left to spend?
 Look at encumbrances
▪ Defined-obligations in the form of purchase orders,
contracts or salary commitments chargeable to an
appropriation and for which part of the appropriation is
reserved
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Consider the Budget at a Glance…..
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Determine cash on hand requirements
Cash on Hand = projected estimate of the
number of days a district could meet operating
expenditures provided no additional revenues
were received.
 Review historical cash flow patterns
 Evaluate anticipated changes in patterns
(recession)
 Establish Board Policy
 Create plan to build fund balances over time
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Cash
 Recognizes revenue when received
 Recognizes expenses when paid
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Accrual
 Recognizes revenue before it is received
 Recognizes expenses when they are incurred
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Which method is better for your district?
Why?
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Presented by Ann Williams
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Serve as a School Leader
Review Financial Impact of Strategic Planning
Goals
Develop Financial Goals
How Bond Sales Work
Develop Outside Funding Sources
Develop Multi-Year Forecast
Estimate Real Estate Property Tax Revenues
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As a school leader, our role is to…..
 Educate the community and the staff on the fiscal
condition of the district
 Represent the district at all times
▪ During the school day
▪ With the media
▪ On the weekends in the grocery store
 Implement best practices in all areas of operation
▪ Nutrition programs
▪ Transportation
▪ Business Office
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What is marketing?
Who is the budget's marketing audience?
After the budget document has been created,
it must be presented inside and outside of the
organization
Primary purpose of budget presentation
 To explain the contents
 To explain the why’s
 To gain approval
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Working with the media
Community relations
 Employ a customer focus
▪ know your audience
 Develop basic operational strategies
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Market long term, all year long
Create a citizen’s task force (opinion shapers)
Integrity-don’t make promises you can’t keep!
School staff (ambassadors to the community)
Emphasize education
Be effective!
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Create a strategic financial plan committee
 Review district’s mission
 Review district’s strategic plan
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Link financial goals to mission and strategic
plan
Create a financial profile of today and
tomorrow
 Revenue to expenditure ratio
 Revenue to Fund balance ratio
 Days cash on hand
 Short and long term debt
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Administration contracts with a bond consultant to
issue bonds.
 Interest rate is negotiated
 After bonds are sold, the district receives the
current cash value of bonds.
 District pays the bonds back with interest over a
specified period of time
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Life Safety
 Used for state approved projects
 Subject to debt repayment limit
 No referendum needed
Working Cash
 Used to generate revenue which can be loaned or transferred to Education, O
& M, Life Safety and Transportation
 Subject to debt repayment limit
 Backdoor referendum
Building
 Land, building and equipment costs for new facilities or renovations/additions
 Requires a referendum
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Districts can add to their tax levy to pay back
bonds.
Taxpayers contribute additional dollars to
cover the bond payments
Incoporporate an explanation of the district’s
bonds into your annual tax levy presentation
It’s critical that districts communicate the
impact of bond issuance over the term of the
bond period
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Tax Anticipation Warrants
 “Credit card debt”
 For short term cash flow needs
 Issued against anticipated property tax income
 Maximum of 85% of total tax levied
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Business partnerships
District Foundation
Athletics
Other non academic services (pool,
auditorium, etc.)
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Review revenue for previous years and
analyze patterns
Consider anticipated changes
 TIFs
 New construction (or lack of)
 Collection rates
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