Finance & Budget Basics for new Principals & Headmasters

1. BPS Finance & Budget Team July, 2014 Finance &Budget Basics for new Principals & Headmasters Type Date Here Type Presenter Name/Contact Here

2. Agenda Who we are: a quick introduction What we do: the budget development process, weighted student funding How we do it: our key tools • BPS Financial Applications • Budget Structures & “Chart of Accounts” • All Funds Budget Report • Budget Transfer Process & Guidelines • Monthly Financial Report • Overall Procurement Process & Guidelines • Trends from FY13 Wrap Up and Q&A

3. Who we are: presenters at this session Erika Giampietro Deputy Chief Financial Officer egiampietro@boston.k12.ma.us 635-8306 Naveen Reddy Director of Business Improvement nreddy@boston.k12.ma.us 635-9555 Jordan Cupps Finance liaison (networks B and D) jcupps@boston.k12.ma.us 635-8302

4. Who we are: Finance Network Liaisons • What we do: • We are your budget partners (we work with you to develop your budget to best meet your unique needs and then to spend against it successfully, in compliance, and on-time) • We are your “one stop shop” for all Finance and Budget related questions (if we don’t know the answer, we’ll refer you to someone who does)

5. What is Weighted Student Funding? • Weighted Student Funding, or WSF, or Weighted Student Formula, is a way to distribute resources to schools • It is based on a per pupil allocation: “the dollars follow the student” • The per pupil allocation is differentiated by student need • WSF is not new to school districts (the methodology is used in San Francisco, Cincinnati, Baltimore, DC, New York City, and others) • We are entering our third year of WSF Allocates funds based on student needs, improving equity, transparency and simplicity 5

6. Weighted student funding: Principles for effective school budgeting Weighted Student Funding is a more equitable, transparent, and empowering budget approach

7. What we do: the School Budget Development Process Superintendent’s Budget Proposal to School Committee by 1st Wed. in February. Policy Priorities developed by School Committee and Superintendent. Development of Superintendent’s Budget Proposal Preliminary Budget Figures Developed Enrollment Projections Budget figures reviewed and adjusted by Schools & Site Councils Anticipated programmatic changes from schools. Enrollment figures reviewed by Schools Summer / OCT NOVEMBER DECEMBER JAN / FEB

8. What we do: School Budget Development Process In December, each school is sent a preliminary budget figure and is asked to allocate its allotted resources consistent with: • federal, state and local statutes and regulations • applicable court orders • collective bargaining agreements • School Committee policy • the goals of the Boston Public Schools • and the particular priorities of the school Completed budgets are typically due back the first day after the winter recess. Both the school administrator and school site council must “sign-off” on the school budget.

9. Discretionary vs. Non-Discretionary In past analyses, the BPS has estimated that 90-95% of a schools’ general fund budget could be considered constrained by mandates, policies, regulations and/or requirements. (perhaps more so in difficult budget years) Potential areas of flexibility include: Administrators, Library Aides, Instructional Supplies, Planning & Development Specialists, some clerical positions, and grant funds such as Title1. Areas of particular constraint include Special Education, and META compliance. The greatest flexibilities are not granted by the district, but created at the school level by innovative scheduling, staffing and budgeting. In other words, there are many requirements which must be met but there can be some flexibility in HOW they are met.

10. Financial ToolsBoston Administrative Information Systems (BAIS) - PeopleSoft Boston Administration Information System (BAIS) represents the various ERP systems including PeopleSoft Financials (FN), PeopleSoft Human Capital Management (HCM) and the PeopleSoft Portal (The HUB) All budget & procurement information is available in BAIS Financials (PS FN) and staffing and payroll information is available in BAIS Human Capital Management (PS HCM) The HUB is the gateway to access these applications Future Force is a bolt on application in PS HCM which is used to create budgets during the budgeting process Maximo is an enterprise wide work order system for managing work orders with Facilities and Planning & Engineering PeopleSoft Financial Training: Scheduled for July 26; contact Dolores Sullivan (dsullivan@boston.k12.ma.us - 635-9456) for more information

11. Budget Codes (Chartfields) Development and implementation of the school budget will require a familiarity with the BPS “Chart of Accounts” and PeopleSoft functionality. In PeopleSoft the fields that store the charts of accounts and provide BPS with the basic structure to segregate and categorize transactional and budget data are called ChartFields.

12. Budget Codes (Chartfields) Budget Ref Business Unit Project Class Dept Account Fund Program Fields that make up the “Chart of Accounts” Organize financial and budgetary information in PeopleSoft - each unique combination of values defines a budget line item. Used in requisitions, stipend requests and budget transfers. Enable BPS to capture and report information to the required level of detail.

13. Budget Codes (Chartfields) Budget Ref Business Unit Class Project Dept Account Fund Program Business Unit: For requisitions it is “BPS01” & Budget transfers it is “BOSTN’ Budget Ref= Fiscal Year, i.e. 2014. Deptis the RC designation - six digits beginning with 101. For example, the Adams School is 101203. Fund is either 100 for General Fund,200 for Grants, or 203 for ARRA Grants. Projectcaptures the grant number for all external funds. Title 1, for example is BPS14150 in FY2014. For general fund, leave project/grant field blank.

14. Budget Codes (Chartfields) Budget Ref Business Unit Project Class Dept Account Fund Program Account refers to the Expense Object, or the category of expenditure. For example, Stipends (51202), Regular Education Teacher (51002), or Contracted Services (52907). Programdelineates the programmatic area. For example, Bil/SEI Spanish (2456) or Regular Ed. Math (2120). Classis not being used by the BPS, so always enter “0000”.

15. BPS Budget “Line Items” Budget “Line Items” are the most detailed breakdown of budgetary resources and are a combination of ChartFields. Each line item denotes a distinct pool of resources budgeted to support a particular purpose (or multiple purposes). Examples:

16. BPS Budget Example Example: ML King School, Instructional Supplies (General Fund) PS Organization (Gen. Fund) Budget Dept Fund Account Program Budget 101534 King 100 Gen. Fund 53801 Instruc. -Texts 2137 Reg. Ed. Other $2,000 101534 King 100 Gen. Fund 53801 Instruc. -Texts 2120 Mathematics $1,079 101534 King 100 Gen. Fund 53802 Instruc. -Other 2456 SEI Spanish $1,000 101534 King 100 Gen. Fund 53802 Instruc. -Other 2016 Grade 6 $1,780 • There is some discretion / choice about how to code budget line items when developing budget. • There is an opportunity to make adjustments to non-salary budget line items once set up. • Requisitions and budget transfers must reference an accurate, valid budget line item with available $ or will not move forward.

17. All Funds Budget Report “BPS All Funds Budget Report” designed to be the primary financial management tool for Principals and Responsibility Center managers. Includes budgeted dollars and budgeted Full Time Equivalent Positions (FTEs), as well as information on encumbrances and expenditures and provides an available balance for each budget line. Includes financial information for funds 100 and 200. Pre-encumbrance= outstanding Requisitions; Encumbrance = outstanding Purchase Orders. Handout: Job Aid shows how to run All Funds Budget Report.

18. All Funds Budget Report

19. Budget Transfers Budget Transfers are the mechanism by which available budgeted resources are moved from one budget line item to another in the financial system Incremental Approach (FROM= -$ TO= +$; transfer must add to $0)

20. Budget Transfers - Guidelines Funding Source: Cannot transfer between funding source (Grants to General Funds) Personnel Lines: Cannot transfer funds from a personnel line to a non-personnel unless: • Pilot/Innovation/HM Charter School: Budgeted salaries exceed Actual Salaries + Career Awards and Additional Payments (Teacher Leader Stipends, Education level bonus) • Position has never been filled (must be approved by HR and Finance Liaisons). If position has been filled and would like to transfer balance remaining, must receive CFO approval Nonpersonnel Lines: • Can transfer to a personnel line to create position – but must ask Finance Liaison to create PC and complete transfer • Stipend line: Check with Budget Office to determine remaining balance Deadline: Cannot make transfers after March 25th in order to be processed in time for April 5th Spending Deadline. No exceptions will be made this coming year.

21. Monthly Financial Report Every second week in a month during the school year an email is generated from the system to authorized personnel which contains an excel spreadsheet with multiple tabs and has as of date information for the current budget year, tabs include • An all funds budget with pre-encumbrance, encumbrance, expenditures and available budget for all budget lines • Open requisition listing • Open purchase order listing • Payroll expenditures posted to your budget • Non-expenditures posted to your budget If you are not receiving this via email, please contact Joyce Trabucco (jtrabucco@boston.k12.ma.us)

22. Overall Procurement Process Invoice Vendor Requisition Bid & Contract (If needed) Purchase Order Payment Receiving Business Office Business Office Business Office School School Expense Encumbrance Pre-Encumbrance Expenditure Report Open PO Listing Open Req Listing The State Procurement Law (MGLc30B) establishes uniform procedures to be followed by local governments when contracting for supplies and services. Most goods and services purchased by BPS are procured through competitive bid processes. However, the statute does allow for some purchases to be made without public advertising. Procurement guidelines will be covered at the BAIS FN training on July 26.

23. General Procurement Guidelines • The procurement statute does allow for the purchase of certain categories of goods and services without a competitive bid process being conducted. (details in Superintendent’s Circular #FIN-7, 2011-2012) • More information please contact Edward J. Glora, Business Manager - eglora@boston.k12.ma.us - 635-9478

24. Trends in FY13 Better management of funds through out the school year Spend much of your money early in the year to ensure that students receive maximum benefit during the whole school year Help us Help you

25. Wrap-up: Unsolicited Advice... Carefully consider the use of all your resources: money, people and time. Ask experienced principals about their budget. Effective principals often find ways to use their resources creatively and strategically. Spend much of your money early in the year to ensure that students receive maximum benefit during the whole school year ( reserve some until later for unexpected needs). Use the All Funds Budget Report!! PeopleSoft can be very useful, make it your friend … invest your time early. Your Finance Liaison is your partner, they are there to help you in all financial tasks – use them, invite them to your school, make them your partner. Start early on contracts! You can and should enter requisitions for contracts before the contract is approved. All of your key budget documents can be found in the “budget” tab on MyBPS!

26. Questions

27. Appendix: BPS Financial Information The Boston Public Schools’ Budget is organized into approximately 200 responsibility centers (RC) schools & central departments. Each RC must carry out its organizational and educational responsibilities within its budget. The BPS operates on a fiscal year beginning July 1 & ending June 30th. BPS is a “dependent” district: General Fund (fund 100) appropriation from City of Boston; Grants (fund 200) from state & federal sources. Expenditures against a budget are generally made either through the Requisition / Purchase Order process (Business Office) or through payroll related payments (HR / Payroll).

28. What we do: the BPS Budget Development Process Fixed costs and prior commitments calculated by Budget Office Budget figures reviewed by BPS Offices & Superintendent’s Leadership Team City Council Hearings on BPS Budget Research by Enrollment team Public Hearings on Budget Proposal I M P L E M E N T A T I O N* Superintendent’s Budget Proposal to School Committee by 1st Wed. in February. Mayor submits Budget to City Council for appropriation by 2nd Wed. in May. Policy Priorities developed by School Committee and Superintendent. School Committee vote on Budget by 4th Wed. in March. Budget to Mayor for adjustments, approval. Preliminary Budget Figures Developed Development of Superintendent’s Budget Proposal Enrollment Projections Budget figures reviewed and budget set by Schools & Site Councils Anticipated programmatic changes from schools. Enrollment figures reviewed by Schools SEPT / OCT NOVEMBER DECEMBER JAN / FEB MARCH APRIL MAY District Process Schools Public BPS Central Offices * Note: Implementation includes an October reconcilement of projected to actual enrollment and related adjustments. Chief Financial Office, Boston Public Schools

29. List of schools by network Network A Adams Elementary Bradley Elementary East Boston EEC Edwards Middle Eliot K-8 Guild Elementary Harvard/Kent Elementary Kennedy PJ Elementary McKay K-8 O'Donnell Elementary Otis Elementary Quincy Elementary Umana K-8 Academy Warren/Prescott K-8 Network B Blackstone Elementary Carter Center Dudley Street Nbhd. Charter Ellis Elementary Hale Elementary Haynes EEC Higginson/Lewis K-8 Hurley K-8 King K-8 Mason Elementary Mendell Elementary Orchard Gardens K-8 Timilty Middle Trotter Elementary Winthrop Elementary Network C Condon Elementary Clap Innovation School Dever Elementary Everett Elementary Frederick Middle Holland Elementary Holmes Elementary Marshall Elementary/ UP Dorchester McCormack Middle Middle School Academy Perkins Elementary Perry K-8 Russell Elementary Tynan Elementary UP Academy Network D Baldwin Pilot ELA BTU School K-8 Curley K-8 Edison K8 Gardner Pilot Academy Hennigan Elementary Horace Mann Jackson/Mann K-8 Kennedy JF Elementary Lyon K-8 Manning Elementary McKinley K-8 Mission Hill K-8 Tobin K-8 West Zone ELC Winship Elementary Network E Bates Elementary Beethoven- Ohrenberger K-8 Channing Elementary Chittick Elementary Conley Elementary Greenwood E. Leadership Grew Elementary Haley Elementary Irving Middle Kilmer K-8 Lyndon K-8 Mozart Elementary Philbrick Elementary Rogers Middle Roosevelt K-8 Sumner Elementary Network F EEC at Fifield Ellison/Parks EE Sch Greenwood, Sarah K-8 Harbor Middle School Henderson Elementary Hernandez K-8 Kenny Elementary Lee Academy Lee Elementary Mather Elementary Mattahunt Elementary Mildred Avenue 3-8 Murphy K-8 Taylor Elementary Young Achievers K-8 Network G High Schools and Alternative Options Network H Vocational Technical network