Budget Development

1. Budget Development Kern County Superintendent of Schools Division of Administration and Finance

2. What is a budget? • Spending Plan • Critical Financial Management Tool • District Goals and Priorities Expressed in Dollars

3. Major Budget Variables • Student Enrollment • Student Attendance • School Facilities • Educational Funding/Revenues • Program Expenditures • Board Priorities

4. When is it due? • Single Adoption • July 1st • Dual Adoption • September 8th

5. What to file? • Source – SACS software • Adopted Budget for all Funds • Average Daily Attendance (Form A) • Revenue Limit Summary (Form RL) • Technical Review Checklist (Form TRC) • Criteria and Standards Review (CS) • Summary of Interfund Activities for all funds (Form SIAAB)

6. What to file? • SACS (con’t) • Certification of Budget Adoption with required 2 signatures • Multi-Year Projection • SACS • School Services • Excel Spreadsheet • Include detailed assumptions

7. What we look for… • Budget Review checklist • Certification page submitted and signed • Summaries of interfund activities agree with transfer detail in all funds • Form A: Estimated Actuals agree with school district attendance reports and budget ADA agrees with form RL

8. What we look for… • General Fund Review: Actuals and Budget • Verify that summary/detail totals agree • Verify that the restricted columns on page 2, line F, are zero or positive • Verify that any contributions to restricted programs were entered on the detail pages and agree with the summary page • Verify that the ending balance for the prior fiscal year, line F2, equals the beginning balance for new fiscal year line F1a

9. What we look for… • General Fund Review: Actuals and Budget • Verify that the current year beginning balance, line F1a, equals the ending balance reported to the CDE last year • Verify that the components of ending balance equal line F2 • Verify that apportionment, object 8011, agrees with the form RL • Verify that property tax accounts, 8021-8089, equal the amount listed on the form RL, line 25

10. What we look for… • General Fund Review: Actuals and Budget • Verify that the PERS reductions are entered on page 4 (8092), offset on page 7 (38xx) and agrees with the form RL, line 21. Remember that the offset of expenditures may be divided up among the various funds • Verify that Special Ed, Continuing Ed, Community Day school ADA transfers are entered on page 4 (8091)

11. What we look for… • General Fund Review: Actuals and Budget • Accounts 5710 and 7310 net to zero in columns C and F • Accounts 5750 and 7350 are offset with equal amounts in special funds • Revenue limit summary submitted and agrees with the general fund • Verify that SACS forms match budget reports (BDX110) • TRC check

12. Reasonable Budget Estimates • Reasonable Budget estimates for • Revenue limit sources (ADA) • Federal sources of revenue • State categorical revenues • Local sources of revenue • Certificated salaries • Classified salaries

13. Reasonable Budget Estimates • Reasonable Budget estimates for • Employee benefits • Books and supplies • Services • Capital Outlay • Other Outgo • Transfers • Other sources/Uses

14. Criteria Standards review • Criteria Standards review • ADA variance • Deficit variance • Minimum reserve level • Fund balance trend • Contingent liabilities • Use of one-time resources • Special Ed funding

15. Criteria Standards review • Criteria Standards review • Multi-year commitments • Contributions to restricted programs • Retiree health and welfare liability • Temp borrowing between funds • Capital Projects • Collective bargaining status

16. Multi-Year Projection • Multi year Projection • Enrollment and ADA trends • Health and Welfare % increases (unless capped) • COE billback • Deficit spending projected in the two out years? • Does the projection satisfy the reserve requirement in the next two out years?

17. Other Checks • All other funds • Verify that summary/detail totals agree • Verify that the ending balance for prior year, line F2, equals the beginning balance for the new year, line F1a • Verify that the new year beginning balance, line F1a, equals the ending balance reported to the CDE last year • Verify that the components of ending balance equal line F2 • Criteria and Standards submitted • Verify that software matches budget reports

18. Estimating Actuals • What is my ending balance going to be? • Unrestricted • Restricted • Estimated ending balances in current year becomes the beginning balances in the budget year.

19. Revenue Limit – Form RL • The form RL draws data from the following sources: • K12 (P2 for unaudited, P1 if the P2 is not yet available) • P2 School District Attendance report • P2 J29 – Statement of Taxes • RL Estimate provided by COE

20. Form RL – cont. • The Form RL revenue limit ADA should agree with Form A. • The Form RL State and local property taxes should agree with form 01. • PERS reduction (line 21) should agree with object 8092, and total object 3800-02 in all funds.

21. AB 1200 Guidelines • Fiscal Monitoring Guidelines • Sets Standards for Budget Review and Monitoring • County Office Powers and Responsibilities • Criteria and Standards • Greatly Enhances Fiduciary Management Statewide

22. AB 1200 Guidelines • Self Certification at Each Phase of Budget cycle • Budget Adoption • Interim Report Periods • Certification • Positive • Qualified • Negative

23. AB 1200 GuidelinesThree Major Certifications • Positive • Will Complete Year with Positive Fund and Cash Balance • District is solvent and can meet obligations • Qualified • May not Complete Year with positive fund and/or cash balance • Financial Indicators require scrutiny – modest intervention • Negative • Will not complete year with positive fund/cash balance • Financial Indicators require aggressive action

24. AB 1200 Guidelines • County Office • Reviews each District Certification • May change the district certification if the situation warrants • Reports findings to the State Controller • Various actions available to County Office • Assign a fiscal advisor and/or • Budget Review Committee

25. Budgeting for Categoricals • The Keys – Single Adoption • Estimating what the ending balance or carryover will be for each categorical program • Knowing what new $ will be in the new year • SACS software requires that grant programs are balanced. Revenues must equal expenditures

26. Helpful Hints • Reduce program encroachments as much as possible • Consider charging programs and other funds an indirect cost rate to cover the cost of administration • Others?

27. Questions?

28. Questions? • If you have any questions regarding budget development please feel free to contact us for additional help. • Steve Mattern 636-4691 • Kim Baehr 636-4617 • Maxx Garris 636-4641 • Robert Harte 636-4689 • Maria Rameriz 636-4494