ASBO & GFOA Budget Presentation and CAFR Requirements

1. 2007 TASBO 61st Annual Conference ASBO & GFOA Budget Presentation andCAFR Requirements

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

3. Agenda • Introduction • Budget Presentation • Comprehensive Annual Financial Report • Summary • Questions and Answers

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

5. The Financial Cycle The seven steps of the Northwest ISD Financial Cycle are: • Strategic Plan / Five-Year Forecast Fall-January • Budget Preparation February - March • Board Budget Review April - May • Budget Adoption June • Tax Rate Adoption July - August • Financial & Investment Reporting July - June • Audited Financial Statements November

6. Association of School Business Officials International Meritorious Budget Award

7. 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.

8. 2005-2006 Texas Recipients • Alief Houston • Allen Klein • Carrollton-Farmers Branch Laredo • Conroe Lewisville • Dallas Northwest • Fort Bend Rockwall

9. Government Finance Officer’s Association Distinguished Budget Presentation Award

10. 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.

11. 2005-2006 Texas Recipients • Alief Fort Bend • Austin Houston • Big Spring Laredo • Carrollton-Farmers Branch Lewisville • Conroe North East • Corpus Christi Northwest • Dallas United

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

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

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

15. 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.

16. ASBO & GFOACriteria Checklist Applicants rate their budget against the criteria using the checklist and identify any adjustments that can be incorporated into the final document. To receive these awards, a school entity must publish a budget document as a policy document, an operations guide, a financial plan, and a communications medium.

17. ASBO International’s Meritorious Budget Award

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

19. Government Finance Officer’s Association Distinguished Budget Presentation Award

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

21. ASBO Criteria ChecklistGeneral Requirements The General Requirements relate to the overall budget document but do not necessarily apply to a specific section of a document. They set criteria concerning the document cover page, the sectional division and table of contents, page numbering information not included in the budget document, response to previous review team comments, use of graphs and charts, and the technical preparation of the document.

22. ASBO Criteria ChecklistIntroductory Section Introduces the reader to the document as a whole. It highlights important information contained in the budget. Users rely on this section to get an overview. They want a quick overview – a snapshot of what they can expect to find in the rest of the document.

23. ASBO Criteria ChecklistIntroductory Section • A liftable executive summary • A copy of the MBA certificate (if awarded in the preceding year) • A listing of school board members and top level administrative personnel

24. Organizational Section Provides the context and framework within which the budget is developed and managed. The context for the budget is substantially predicated on the type and level of service to be provided to the students of the community. The framework also includes the District's organizational and financial structure as well as the controls that direct and regulate the development and administration of the budget.

25. Criteria ChecklistOrganizational Section • Explanation of the school entity • Significant budget and financial policies • Organizational Chart • Statement of the mission • Major goals and objectives • The operating and capital budget development process • The budget administration and management process

26. Financial Section The heart of the school budget document. The budget financial schedules present the adopted budgets for the District compared with the results of past budget plans and with future projections.

27. Criteria ChecklistFinancial Section • Scope and format of budget presentations (i.e., schedules0 • Use of the pyramid approach in the presentation of budgets • Complete information presented including fund balances, revenues, expenditures and other funding sources/uses • Inclusion of capital budgets and a list of major capital projects • Description of capital spending impacts on the operating budget • Current debt, legal debt limits and effects on current/future budgets

28. School & ProgramsSection Provides the Mission Statements carried out by the school or program, objective methods of results by school or program, and includes the resources, both personnel and dollars, allocated to the school or program to carry out the stated mission.

29. School & ProgramsSection 1. ASBO - Optional. 2. GFOA - Required: • Display by Organizational Units or Programs. • Describe activities, services or functions carried out. • Provide objective methods to measure progress toward accomplishing the government’s mission as well as specific unit program goals and objectives.

30. Informational Section Contains information on past and future budgets and factors influencing the proposed budget. Puts the adopted budget into context and it explains past budget decisions.

31. Criteria ChecklistInformational Section • Revenue Sources, Assumptions and Trends • Values of Taxable Properties • Property Tax rates and Collections • Analysis of Tax Burden • Comparison of Revenues and Expenditures • Budget Forecasts

32. Criteria ChecklistInformational Section 7. Student Enrollment History and Forecasts 8. Personnel Resource Allocations 9. Bond Amortization Schedules 10. Performance Measurements 11. Other Useful Information 12. A Glossary of Terms

33. ASBOApplication Materials • (1) Application Form • (4) Transmittal Letter • (4) Budget Document • (4) Criteria Location Checklist • (4) Responses to Last Year’s Comments (if applicable) • (-) Fee ($350 - $900)

34. ASBOApplication Deadline • Submitted within 90 days of FINAL legal adoption date. • Adoption processes may include several dates. • Budget Adoption in June. • Tax Rate Adoption in August. WWW.ASBOINTL.ORG

35. GFOAApplication Materials • (5) Application Form • (4) Transmittal Letter • (4) Budget Document • (5) Criteria Location Guide • (5) Responses to Last Year’s Comments (If applicable) • (-) Fees ($165 - $630)

36. GFOAApplication Deadline • Two options: • Proposed budget • Within 90 days of submission to governing body. • Adopted budget • Within 90 days of adoption. WWW.GFOA.ORG

37. 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.

38. ASBO International’s Certificate of Excellence in Financial Reporting

39. Certificate of Excellence inFinancial 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.

40. 2005 Texas Recipients • Independent School Districts 35 • Educational Service Centers 2

41. Government Finance Officer’s Association Certificate of Achievement for Excellence in Financial Reporting

42. 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.

43. 2005 Results Texas Recipients • Independent School Districts 50 • Educational Service Centers 1

44. What is the mission of ASBO’s COE Program? To encourage and recognize excellence in the preparation and issuance of school system’s Comprehensive Annual Financial Reports.

45. What is the application deadline? School systems must submit their application to ASBO no later than six months after a school system’s fiscal year end. For example, Fiscal Year EndApplication Deadline June 30 December 31 August 31 February 28

46. What is the fee to participate in the program? The application fee is based on the school system’s total revenue, all funds. All school systems (regardless of ASBO International membership) may apply. Below is the fee information: Total Revenue, All FundsASBO Member Under $1 Million $350 $1 to $5 Million $450 $5 to $10 Million $550 $10 to $25 Million $700 $25 to $50 Million $800 $50 to $100 Million $900 $100 to $250 Million $1,000

47. How long does the review process take? The process takes approximately 4-5 months. As part of each review, reviewer comments are provided back to the submitting school district to be used in preparation of subsequent CAFR’s.

48. What needs to be submitted to be considered for the program? The application materials include: • One copy of the completed application form • Three copies of the CAFR • Three copies of the school system’s responses to last year’s comments (if applicable) • Three copies of the Self-Evaluation Worksheet (Self-Evaluation worksheets are required for first time participants or if a school system did not apply to the program for the previous year.) • Application Fee

49. What are the benefits/features of the program? • All applicants receive constructive comments about their CAFR from trained accounting professionals.Those who receive the award also receive: • A prestigious award plaque • A printed award certificate to be used in the school system’s next CAFR • Professional recognition in ASBO’s and ASBO affiliate publications • Media recognition • Strengthened budget planning and forecasting

50. What are the benefits/features of the program? The Certificate of Excellence in Financial Reporting Award is recognized by: • Bond Rating Agencies • Securities Analysts • Underwriters • Educational, teacher, and citizen groups • Accounting Professionals