ISBE Accounting Update

1. ISBE Accounting Update Debby Vespa, ISBE School Business and Support Services Division Administrator dvespa@isbe.net (217) 785-8779 Craig Schilling, Glenbrook High School District 225 Assistant Superintendent/Business Affairs cschilling@glenbrook.k12.il.us (847) 486-4725

2. New Requirements and Schedules for Fiscal Year 2007 Budget

3. Public Act 94-0234 Requires: • Balanced Budget or Deficit Reduction Plan • Submittal of District Budgets to ISBE

4. Balanced Budget ISBE Defines Balanced Budget as: • Total Expenditures for Four Operational Funds; Educational, Operations and Maintenance, Transportation, and Working Cash will be Compared to Total Revenue for same Funds • If Total Revenues are Greater Than or Equal to Total Expenditures, the Budget is Balanced. No Deficit Reduction Plan is Required

5. Balanced Budget (Con’t.) • If Total Expenditures are Greater Than Total Revenues, the Total Deficit Must Be Less Than 1/3 of Total Ending Fund Balance of the Four Funds • If the Deficit is Greater Than 1/3 of the Total Ending Fund Balance, a Deficit Reduction Plan is Required

6. Balanced Budget (Con’t.) Example: If the Total Expenditures Exceed the Total Revenues for the Educational, Operation and Maintenance, Transportation, and Working Cash Funds by $100,000, Then the Total Ending Fund Balance for the Same Funds Must Be At Least $300,000 or Greater Otherwise the District Will Be Required to File a Deficit Reduction Plan

7. Balanced Budget (Con’t.)(New In Fiscal Year 2007 Budget Form)

8. Deficit Reduction Plan (Con’t.)(Schedule On FY 2007 Budget Form)

9. Deficit Reduction Plan (Con’t.)

10. Deficit Reduction Plan (Con’t.)

11. Deficit Reduction Plan (Con’t.) • Financial Projections are Required In the Same Format for Fiscal Years 2007-2008, 2008-2009, and 2009-2010.

12. Deficit Reduction Plan (Con’t.)

13. Public Act 04-0714 Contracts • All Districts are Required to file a Report Regarding ‘Vendor Contracts’ as an Attachment to Their Budget. • ‘Vendor Contracts’ Referes to All Contracts and Agreements that Pertain to goods and Services that were Intended to Generate Additional Revenue and Other Remunerations For the District in Excess of $1,000

14. Public Act 04-0714 Contracts (Con’t) Including, But Not Limited To, Vending Machine Contracts, Sports and Other Attire, Class Rings, and Photographic Services. • Beginning July 1, 2006 All Such Contract Must be Board Approved • All Such Contracts Should be Listed on the Schedule Even If They Were Executed Prior to July 1, 2006 and Not Board Approved

15. Public Act 04-0714 Contracts (Con’t)(Schedule on FY 2007 Budget Form)

16. New Requirements and Schedules for Fiscal Year 2006 Annual Financial Report

17. Federal Requirements for Indirect Costs Calculations • Termination Costs • Mass/Abnormal Retirement • Termination Cost & Mass/Abnormal Retirement Schedule

18. Federal Requirements for Indirect Costs Calculations (Con’t) • Termination Costs • Upon the Severance of Employment, Pay to an Employee for Unused Sick or Vacation Time • Mass/Abnormal Retirement • Abnormal Retirement is a Retirement that is Not Provided to all Employees • Indirect Cost Must Be Calculated on Case By Case Situation

19. Federal Requirements for Indirect Costs Calculations (Con’t)

20. Federal Requirements for Indirect Costs Calculations (Con’t)

21. Federal Requirements for Indirect Costs Calculations (Con’t)

22. Watch for Future Revisions

23. Future Changes to Accounting Procedures • Incorporated a Separate Tort Fund In Place of the Current Rent Fund • Revise Site and Construction to Capital Improvements • Revise Bond and Interest to Debt Fund • Add Functions to Allow for Transfers to Align New Funds • Enhance Accountability of Activity Funds

24. Questions?