ACSA Leadership Conference November 2013

Brett W. McFadden, CBO Pajaro Valley USD

Sandra J. Harrington, CBO Ukiah Unified School District

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The Big Picture: Areas of ResponsibilityThe Role of the Business DepartmentThe Role of the Principal

The Budget Process: Macro-to-MicroState BudgetDistrict BudgetSite Budgets

Other Areas of ResponsibilityAttendanceASBFundraising

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Understanding our roles…

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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!

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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

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Instructional and Site Leader

Budget Management

Recordkeeping

Legal Compliance

Safety

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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

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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

It’s a brand new world…2012/13 Local Control Funding Formula…Local Control Accountability Plan (LCAP)…Common Core State Standards…

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The old system:Formula driven

A new system:Local Control Funding Formula

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

Policy and budget making via formulas is gone

◦ Local control accountability plan and budget developed simultaneously = What you will do and be held accountable for

◦ Under an 8-year phase in

LCFF/ LCAP

The paradigm shift:Spending directly accountable to educational outcomes

Factors K-3 4-6 7-8 9-12

Grade Span Base Grant per ADA $6,845 $6,947 $7,154 $8,289

Adjustment factors 10.4% CSR -- -- 2.6% CTE?

CSR, CTE amounts $711.88 -- -- $215.51

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 each column to get target grant and divide by 8 to get yearly increase

Add on: Home-to-School Transportation and Targeted Instructional Improvement Grant Funded at 2012-13 levels

◦ $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

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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 Coreimplementation and planning

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

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Districts will need to develop a process for LCAP development and approval

• 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?

This is like zero-based budgeting

• 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?

Internal planning w/ the LCFF model

Facilitating, selling, communicating

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District revenues

Equates to a 23% drop in state

revenues

Eight year phase in of LCFF funding

Return to 2007-08 per ADA statutory funding levels

Phased recovery over time

• Projects education plan • Identifies sources of

revenue & expenditures• Informs the public• Guides evaluation of

programs• Trend Analysis

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Developed and adopted each year

Revised no less than two times per year

Many forms and schedules

Many factors contribute to change

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

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

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

Budget action: Adoption date:

Adopted budget* July 1Unaudited actuals (fiscal activity through year end) By September 15Annual independent audit of prior-year budget October each year1st Interim Report (activity through Oct 31) December 152nd Interim Report (activity through January 31) March 153rd Interim Report (activity through June 30) If required by COEFederal fiscal year Oct 1 – Sept 30

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•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

FederalStateLocal

Total Revenue

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

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* EdSource and Legislative Analyst’s Office

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EdSource Jan. 2011

* Not all revenues go to instruction. For example, $2.5 billion pays for child care and adult ed.

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

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

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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

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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.

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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

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

• Projects education plan • Identifies sources of

revenue & expenditures• Informs the public• Guides evaluation of

programs• Trend Analysis

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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!

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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

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Unrestricted fund•Usually recurring•Supply and equipment budgets•Typically less rules

Restricted fund•Categorical programs•Usually recurring•SIP, EIA-LEP, Title 1•Program-based with rules/restrictions

Grants/Donations•Usually one-time•Variable rules/restrictions•Provided for specific expenditures

PTA/Booster Clubs•Usually one-time•Political context – keep it in mind•Provided for specific expenditures•Be careful / ask questions

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

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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

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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!

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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. ◦ .

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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 spendtoday’s dollars on today’s students responsibly and within the legal guidelines

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• Know The Rules…

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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!!!!

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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.

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!

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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

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Allowable

Field trips and camps

Science and nature trips

Library materials

Awards for students/staff

Playground equipment

Magazine subscriptions

Student services

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Prohibited

Salaries for district employee

Supplies for district purposes

Faculty professional development

Expenses for PTC/PTAs

Maintenance/repair of equipment

Items of personnel use by district employees

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.

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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.

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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, SuperintendentConejo Valley USD

Former CBO, Principal and Teacher