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Budget and Financial Reporting to the Board

TASBO 2009 Business Manager’s Academy. Budget and Financial Reporting to the Board. Welcome. Jon Graswich, CPA Chief Financial Officer DeAnne Hatfield, RTSBA Executive Director Business Services Northwest Independent School District jgraswich@nisdtx.org (817) 215-0025

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Budget and Financial Reporting to the Board

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  1. TASBO 2009 Business Manager’s Academy Budget and Financial Reportingto the Board

  2. Welcome Jon Graswich, CPA Chief Financial Officer DeAnne Hatfield, RTSBA Executive Director Business Services Northwest Independent School District jgraswich@nisdtx.org (817) 215-0025 dhatfield@nisdtx.org (817) 215-0041 www.nisdtx.org

  3. Agenda • Introduction • Legal Requirements • Financial Cycle • Summary • Questions and Answers

  4. IntroductionCub Scout Motto

  5. Legal Requirements Legal requirements for school district budgets are formulated by the State of Texas and implemented by TEA

  6. Statement of Texas Law Sections 44.002 through 44.006 of the Texas Education Code establish the legal basis for budget development in school districts. The following six items summarize the legal requirements from the code: • The superintendent is the budget officer for the district and prepares or causes the budget to be prepared. • The district budget must be prepared by a date set by the state board of education, currently August 20. • The president of the board of trustees must call a public meeting of the board of trustees, giving ten days public notice in a newspaper, for the adoption of the district budget. Any taxpayer in the district may be present and participate in the meeting.

  7. Statement of Texas Law • No funds may be expended in any manner other than as provided for in the adopted budget. The board does have the authority to amend the budget or adopt a supplementary emergency budget to cover unforeseen expenditures. • The budget must be prepared in accordance with GAAP (generally accepted accounting principles) and state guidelines. • The budget must be legally adopted before the adoption of the tax rate. However, if a school district has a July 1st fiscal year start date, then a school district must not adopt a tax rate until after the district receives the certified appraisal roll for the district required by Section 26.01, Tax Code. Additionally, a school district must publish a revised notice andhold another public meetingbefore the district may adopt a tax rate that exceeds the following: (1) The rate proposed in the notice prepared using the estimate; or (2) The district’s rollback rate determined under Section 26.08, Tax Code, using the certified appraisal roll.

  8. TEA Legal Requirements TEA has developed additional requirements for school district budget preparation as follows: • The budget must be adopted by the board of trustees, inclusive of amendments, no later than August 31. • Minutes from district board meetings will be used by TEA to record adoption of and amendments to the budget. • Budgets for the General Fund, the Food Service Fund (whether accounted for in the General Fund, a Special Revenue Fund or Enterprise Fund) and the Debt Service Fund must be included in the official district budget (legal or fiscal year basis). These budgets must be prepared and approved at least at the fund and function levels to comply with the state's legal level of control mandates.

  9. TEA Legal Requirements • The officially adopted district budget, as amended, must be filed with TEA through PEIMS (Public Education Information Management System) by the date prescribed in the annual system guidelines. Revenues, other sources, other uses, and fund balances must be reported by fund, object (at the fourth level), fiscal year, and amount. • Expenditures must be reported by fund, function, object (at the second level), organization, fiscal year, program intent and amount. • A school district must amend the official budget before exceeding a functional expenditure category, i.e., instruction, administration, etc., in the total district budget. The annual financial and compliance report should reflect the amended budget amounts on the schedule comparing budgeted and actual amounts. The requirement for filing the amended budget with TEA is satisfied when the school district files its Annual Financial and Compliance Report.

  10. Board Policy The District derives its legal status from the Constitution of the State of Texas and from the Texas Education Code as passed and amended by the Legislature of Texas. Texas Const., Art. VII

  11. Board Policy • CE(LEGAL) ANNUAL OPERATING BUDGET • CE(LOCAL) ANNUAL OPERATING BUDGET • CDA(LEGAL) OTHER REVENUES: INVESTMENTS • CDA(LOCAL) OTHER REVENUES: INVESTMENTS • CFA(LEGAL) ACCOUNTING: FINANCIAL REPORTS AND STATEMENTS (The Board Policy On Line is posted on the School Board web site)

  12. The Financial Cycle The Financial Cycle starts with strategic planning and ends with the audited financial statements.

  13. The Financial Cycle The seven steps of the Northwest ISD Financial Cycle are: • Budget Planning January-March 2010 • Budget Preparation February-March 2010 • Board of Trustee Budget Review April-May 2010 • Budget Adoption June 2010 • Tax Rate Adoption July-August 2010 • Financial & Investment Reporting July-June 2010-2011 • Audited Financial Statements November 2011

  14. Budget Planning The Budget Planning steps of the Northwest ISD are: • Review Budget Calendar 01/11/10 Board Meeting • Approve Budget Calendar 01/28/10 Board Meeting • Review Five Year Financial Forecast 01/28/09 Board Meeting • Review Strategic Plan - Goals & Objectives 01/28/10 Board Meeting • Approve Strategic Plan - Goals & Objectives 02/08/10 Board Meeting • Review District Improvement Plan 03/08/10 Board Meeting • Approve District Improvement Plan 03/29/10 Board Meeting (Board Demographic reports and Construction reports on a quarterly basis)

  15. Beliefs Vision Mission Strategic Goals and Objectives District Improvement Plan Department Action Plans Campus Improvement Plan BOARD approves Beliefs, Vision, Mission, Goals and Objectives. GOALS are broad - based descriptions of desired future accomplishments. OBJECTIVES flow from goals and are measurable descriptions of what is to be accomplished. 0 0 0 111 TARGETED OBJECTIVE – Identified District Goals and Objectives to be addressed during current year.

  16. Budget Preparation The Northwest ISD Budget Preparation steps are: • Budget Training/ Distribute Budget Packages 01/28/10 DLT Meeting • Complete Budget Packages February • Return Budget Packages 02/25/10 DLT Meeting • Cabinet Reviews Budget Requests 03/01/10 Cabinet Meeting

  17. Incorporate Student Art Art Contest for AP Art students Financial Services staff vote Board of Trustees recognition and nominal cash reward ($100) Frame for conference room Budget Manual is posted on the Financial Services department web site along with previous student art winners Budget Preparation

  18. Board of Trustee Budget Review The Northwest ISD Board of Trustee Budget Review steps are: • Budget Update 03/08/10 Board Meeting • Budget Update 03/29/10 Board Meeting • Budget Update 04/12/10 Board Meeting • Budget Update 04/26/10 Board Meeting • Budget Workshop 05/10/10 Board Meeting • Review Personnel & Compensation Plan 05/10/10 Board Meeting • Budget Workshop 05/24/10 Board Meeting • Adopt Personnel & Compensation Plan 05/24/10 Board Meeting (The Budget Updates are posted on the School Board web site)

  19. Budget Adoption The Northwest ISD Budget Adoption steps are: • Certify Estimated Rolls to Taxing Units 06/07/10 CAD • Calculate Estimated Rollback Rate 06/09/10 DCTA/C • Budget Update 06/14/10 Board Meeting • Publish Notice of Public Meeting 06/16-17/10 • Conduct Public Meeting and Adopt Budget 06/28/10 Board Meeting

  20. ASBO International’s Meritorious Budget Award The Meritorious Budget Awards Program (MBA) uses examples of the latest techniques from school business administrators to build your skills for developing, analyzing, and presenting your school system budget.

  21. Criteria Checklist • General Requirements • Introductory Section • Organizational Section • Financial Section • Informational Section

  22. 2007-2008 Texas Recipients • Alief Klein • Allen Lewisville • Carrollton-Farmers Branch Northwest • Clear Creek Pasadena • Conroe Rockwall • Fort Worth San Antonio • Houston

  23. GFOA Distinguished Budget Presentation Award The Budget Awards Program is designed to encourage governments to prepare budget documents of the highest quality to meet the needs of decision-makers and citizens.

  24. Criteria Guide • Policy Document • Financial Plan • Operations Guide • Communication Device

  25. 2007-2008 Texas Recipients • Alief Houston • Austin Klein • Big Spring Laredo • Carrollton-Farmers Branch Lewisville • Clear Creek North east • Conroe Northwest • Corpus Christi Rockwall • Dallas San Antonio • Fort Bend United

  26. What The Budget Document Is The budget document is a policy document, an operations guide, a financial plan, and a communications medium designed to meet the needs of decision-makers and citizens.

  27. What The Budget DocumentAin’t It is not a “magic” bullet.

  28. What The Budget DocumentAin’t It will not cause money to rain from the heavens.

  29. The “Magic” Bullet is the Strategic Plan The Northwest Independent School District approach to coping with the combination of fast student growth in a restricted funding environment with increasing academic standards has been to ensure that the budget process is driven by the Strategic Plan. The Board of Trustees and Administration review the Strategic Plan. The Administration performs a detailed review of all revenues and expenditures. The focus is on aligning the allocation of resources, both personnel and financial, with the accomplishment of the goals and objectives which are directly linked to the plan as described in the budget document. (The Budget Document is posted on the Financial Services department web site)

  30. Receiving the AwardBoard of Trustee Recognition

  31. Tax Rate Adoption The Northwest ISD Tax Rate Adoption steps are: • Certify Final Rolls to Taxing Units 07/25/10 CAD • Calculate Final Rollback Rate 07/31/10 DCTA/C • Propose Tax Rate 08/09/10 Board Meeting • Publish Notice of Public Meeting 08/11-12/10 • Conduct Public Meeting and Adopt Tax Rate 08/23/10 Board Meeting

  32. Financial & Investment Reporting The Northwest ISD Financial & Investment Reporting steps are: • Review Financial & Investment Reports Monthly Board Meeting • Approve Budget Amendments Monthly Board Meeting • Approve Final Amended Budget 06/27/11 Board Meeting

  33. Financial & Investment Reporting All investments made by the District shall comply with the Public Funds Investment Act (Texas Government Code Chapter 2256, Subchapter A) and all federal, state, and local statutes, rules or regulations. Gov’t Code 2256.026 • Financial and Investment Report Cover Sheet • Financial and Investment Report Spreadsheets • Investment Portfolio Summary • Economic Summary 3rd Quarter 2009 (The Monthly Financial & Investment Reports are posted on the School Board web site)

  34. Audited Financial Statements The Northwest ISD Audited Financial Statement steps are: • Approve Annual Financial Report 11/14/11 Board Meeting

  35. What is a CAFR? The Comprehensive Annual Financial Report (CAFR) is a report that tells the financial story of the school system through narrative, financial statements, and chart/graphs. The CAFR not only gives the summary and detailed information for the school year being reported, but also includes information for the previous ten years.

  36. ASBO International’s Certificate of Excellence in Financial Reporting The Certificate of Excellence in Financial Reporting (COE) Program reviews the accounting practices and reporting procedures used by school districts in their Comprehensive Annual Financial Reports (CAFR), and enhances the award winners' credibility among stakeholders.

  37. 2007 Texas Recipients Independent School Districts 35

  38. GFOA Certificate of Achievement for Excellence in Financial Reporting The Certificate Program, which was established in 1945, is designed to recognize and encourage excellence in financial reporting by state and local governments.

  39. 2007Texas Recipients Independent School Districts 51

  40. Why Should My School System Participate? Credibility Participation validates a school system’s commitment to fiscal and financial integrity and enhances its credibility with the school board and community Confidence Receiving the Certificate of Excellence Award gives the superintendent and school board confidence about their school system and the business management staff.

  41. Why Should My School System Participate? Savings A CAFR complies with disclosure requirements by providing ninety percent of what is needed for credit evaluation. (The CAFR is posted on the Financial Services department web site)

  42. Receiving the AwardBoard of Trustee Recognition

  43. SUMMARY

  44. Questions and Answers

  45. Workshop Concluded

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