NEW MEXICO PUBLIC SCHOOL FINANCE and Santa Fe Public Schools OR Finance 101

2. NEW MEXICO PUBLIC SCHOOL FINANCEandSanta Fe Public Schools OR Finance 101

3. Definition of Terms Fund: to track and keep separate different sources of funds which often have specific purposes and restrictions Function: to group expenditures that share a similar level of support FTE: Full-Time Equivalent Employee may be designated as portions Operational Fund: considered the "Main" fund, is one of the many available to the district. District Operating Budget: includes every fund available to the district; the entire budget that must be approved by the SFPSBOE and NMPED BAR - Budget Adjustment Request: used to change funding (up or down) or to shift budget to areas of increasing need

4. Budget Adjustment Request: used to change budget authority (up or down) or to shift budget to areas of increasing need 5 types of BARs Initial: Start up to allocate budget to a fund (requires Board and NMPED approval) Increase: Adds budget to a fund that already has budget authority (requires Board and NMPED approval) Decrease: Removes budget from a fund that already has budget authority (requires Board and NMPED approval) Transfer: Moves budget from one function group to another within a fund (requires Board and NMPED approval) Maintenance: Moves budget between object codes within a function (does not require NMPED approval/information only)

5. Definition of Terms SEG - "State Equalization Guarantee”: NMPED funding formula that provides over 95% of Operational Revenue Unit Value: valuebased on legislatively adopted budget; set twice a year; main component in calculating SEG Flow-Through Grant: grant that flows through the NMPED to school districts Direct Grant: grant that flows directly from the issuing entity to school districts Indirect Cost: rate set by NMPED a district is permitted to charge for grant administration (4.79% for SFPS 2010-11) Stimulus: the ARRA funds that flowed through Title I and SPED ($3.3M) Stabilization: the ARRA funds used in NM to offset or “stabilize” the reduction in SEG due to the decline of the unit value

6. Non-Categorical: Funds that are not specifically identified for a program. e.g. Operational Fund Employees Salaries and Benefits (The budgeted amount for staff salaries and benefits represents @ 83% of the operating budget.) Special Education Therapists Classroom Supplies and Materials School Library Resources Maintenance and Operation of Facilities Administration and School Management Categorical: funds that are budgeted for a specific purpose and can not be used for other purposes. e.g. Transportation: To-and-From School Bus Service Instructional Materials: Classroom Text Books: Library Resources Food Service: Before School and Lunchtime Meals Definition of Terms

7. THREE MAJOR FUND TYPES NMPED approved 2010-2011 Operating budget GENERAL FUND • Operational $ 89,339,422 • Transportation 2,438,497 • Instructional Materials 1,036,936 • SUB-TOTAL $ 92,814,855 SPECIAL REVENUE FUNDS • Federal-State-Local $16,257,011 • Food Service 4,905,259 • Activity Funds 147,477SUB-TOTAL $ 21,309,747 CAPITAL PROJECTS FUNDS • Bond $ 62,973,876 • Legislative – State 84,872 • HB33 11,207,084 • SB9 14,236,681 • SUB-TOTAL $ 88,502,513 • GRAND TOTAL $ 202,627,115

8. OPERATIONAL FUND NMPED approved 2010-2011 Operating budget State Equalization Guarantee (“SEG”) 95.9% (major component of Operational Fund) Local (rents, ad valorem, investments) 3.4% State (indirect cost) .3% Federal (indirect cost) .4%

9. State Equalization Guarantee (SEG) SEG is the major component of the Operational Budget Funding Formula used to determine units based on the average of prior year 80 & 120 day membership Components Average student membership converted to units based on a per student factor Special Education units based on level of service Elementary Fine Arts units based on K-6 enrollment Bilingual units based on hours of service Elementary PE based on FRPL (frozen) Yields Total Membership Program Units Multiply Total Membership Program Units by Training and Experience Index Yields Adjusted Program Units

10. State Equalization Guarantee (SEG) Add to Adjusted Program Units: National Board Certified Teacher Units Size Adjustment Units (schools less than 200) At-Risk Units (Mobility * FRPL * Bilingual) Yields Total Program Units (Grand Total) Multiply Grand Total by the Unit Value Yields Program Cost Deduct Credits and Adjustments Results in the State Equalization Guarantee

11. MAJOR GRANTS FUNDS (Flow-Through) • Title I – Program to assist teachers with • improving Student Achievement • IDEA-B – Services for Students with Disabilities • Title III – Bilingual Education for Limited English • Proficient Students • Grant Use of Funds • Salaries/Benefits • Professional Development • Contracted Services • General Supplies/Materials • After-School Programs

12. CAPITAL PROJECTS FUNDS (GO Bond, SB9, HB33) Bond Construction of New Schools Renovation of Schools and Other Facilities Playgrounds and Landscaping Roof Replacements HB/SB Maintenance of School Sites Durable Equipment for School Sites

13. Santa Fe Public Schools Salaries & Benefits by Function All Funds (Operational, Transportation, Student Nutrition, Federal/State/Private Grants and Capital Funds) 2010 - 2011 Central Administration: Offices of the Superintendent and Associate Superintendents, Office of the Deputy Superintendent/CFO (Business Services), Human Resources Direct Instruction: Teachers and Instructional Assistants Indirect Instruction: Principals, non-instructional school staff, supporting department staff (Curriculum and Instruction, Special Education, Student Wellness, Technology, Athletics, program coordinators) Transportation/Operations: Transportation (bus drivers and mechanics), Student Nutrition (food service) and General Services (maintenance, warehousing, project management) departments

14. Santa Fe Public Schools Total Expenditures by Function All Funds (Operational, Transportation, Student Nutrition, Federal/State/Private Grants and Capital Funds) 2010 - 2011 Central Administration: Offices of the Superintendent and Associate Superintendents, Office of the Deputy Superintendent/CFO (Business Services), Human Resources … Functions 2300 (General Administration) and 2500 (Central Services) Direct Instruction: Teachers and Instructional Assistants … Function 1000 (Instruction) Indirect Instruction: Principals, non-instructional school staff, supporting department staff (Curriculum and Instruction, Special Education, Student Wellness, Technology, Athletics, program coordinators) … Functions 2100 (Support Service – Student), 2200 (Support Service – Instruction), and 2400 (Support Service – School) Transportation/Operations: Transportation (bus drivers and mechanics), Student Nutrition (food service) and General Services (maintenance, warehousing, project management) departments … Functions 2600 (Operation & Maintenance of Plant) and 2700 (Student Transportation)

15. FISCAL CONSERVATISM • 80-20 Rule (many districts are over 90-10) • Santa Fe Public Schools @ 83-17 • Classroom Size – Below State Statute (even with increase) • Budget vs. Cash Accounting • Budget authority is the amount authorized to be spent. • This must be constantly monitored to ensure there is • revenue available to cover the expenditures. • Maintain an Emergency Reserve*These are funds held in • reserve in a separate account that is not accessible except • through the approval of the School Board and the Public • Education Department. • A consistent fund balance (cash) to ensure the district • maintains a high bond rating. This is the “working cash” to • meet payroll and accounts payable cash flow • needs each month. These funds must not be diverted to other • purposes as they are non-recurring.

16. Financial Management Daily application of Generally Accepted Accounting Principles Payroll and Accounts Payable management Budget authority and account management Cash management Maintaining highest school bond ratings in NM (1 of only 2 school districts) Audit and Finance Committee work: including recommended reports and detailed analysis to better manage funds – a second set of eyes

17. History of SFPS Audits

18. CHALLENGES • Continued reduction in revenue (SEG and other funds) • (See Economic Presentation) • Optimizing use of all funds available to the school district • Balancing the need to take care of all staff and meet instructional requirements and needs • Using like terms and definitions • Cash Management • Elimination of stimulus funds: reassign or eliminate • Rising Costs • Unfunded mandates • Utilities • - Property & Liability Insurance • Benefits – Insurance

19. Budget Development Timelines • General Schedule for the FY11-12 Budget • November: • Initial Finance Committee Meeting – budget kickoff meeting with the presentation “Economics and its’ Impact on Families and Student Performance in SFPS” • December – March: • Monitor State Legislative Session outcomes and impact on SEG and other general and below the line funds • Monitor the opportunity for additional Federal Stabilization and Stimulus funds replacing those that end June 30, 2011 • Develop and review potential budget savings options for: • FY10-11 (especially if reductions are mandated by the State and to increase a depleting cash balance) • FY11-12 (develop guiding strategies for the budget) • Begin school and department budget reviews • March – April: • PED Spring Budget Workshop April 6-8 • Complete school and department budget reviews • Formulate the District budget • Develop other general funds budgets and grant budgets in preparation for submission to PED via OBMS in May and June • May: • Board approve the FY11-12 District budget • Submit Board-approved District budget to PED via OBMS along with other required budget documents • June: • Review submitted District budget with PED during an informal review and make required adjustments • Complete formal District budget review with PED, SFPS Administration and Board representatives • Complete entry of general funds and grant budgets in OBMS • Receive formal signed approval of the District Operating Budget (all funds) from PED

20. Financial Management Objectives • Support District/School’s EPSS(Educational Plan for Student Success) • Maintain and improve financial practice (The annual audit and bond rating are our report card) • Maintain cash to support operations, bond ratings, and solvency