1. Crash Course in School Accounting and Budget Hope you had some coffee…

2. Topics How the Budget Works Fund 35 Auditor SACS (Standardized Account Code Structure) The District Deficit Board Packet (Deposit, B-Warrant, Budget, Contracts) LCFF (Local Control Funding Formula)

3. How Budgets Work/Accounting Concepts Accrual vs. Cash Accounting Budget vs. Cash Timing (Encumbrances, Cash Flows) Fund 35 error on the accounting side

4. Fund 35-What Really Happened Two Errors – Part 1- Temporary cash transfer from fund 35 to fund 01 (9000's object code account) – Part 2- Erroneous Entry into the account, not related to the original transfer. – Audit finding for multiple years, not resolved The controls to prevent this all failed somehow

5. Fund 35-What Really Happened Controls in Place – CBO – County – Independent Auditor – Board of Trustees

6. Independent Auditor New Auditor? – Fund 35.5 Million Dollar Amount Multiple Errors Not Identified – Internal Controls – ASB Audit – Categoricals – http://cpads.sco.ca.gov/CPAList.aspx http://cpads.sco.ca.gov/CPAList.aspx

7. Questions Part 1 Any questions related to the above topics?

8. Standardized Account Code Structure (SACS) Used to track where money comes from and what it is spent on. ??-????-?-????.?-????-????-???-??-???-???? Most accounts are budget oriented It looks horrible to understand but is actually not that bad

9. SACS ??-????-?-????.?-????-????-???-??-???-???? Fund 01= General Fund 13=Food Service/Cafeteria 17=Special Reserve 25=Capital Outlay 35=Capital Facility Fund

10. SACS ??-????-?-????.?-????-????-???-??-???-???? Resource 0000=Unrestricted 0500=Categorical Flex Monies 1100=Unrestricted Lottery 1300=K-3 Class Size Reduction 3010= Title I

11. SACS ??-????-?-????.?-????-????-???-??-???-???? Resource 4035= Title II 5310=Food Service (Used in Fund 13 only) 6300=Restricted Lottery 7090/7091=EIA/SCE

12. SACS ??-????-?-????.?-????-????-???-??-???-???? Resource 7230= Home to School Transportation 7240=Special Education Transportation

13. SACS ??-????-?-????.?-????-????-???-??-???-???? Project Year Almost never used

14. SACS ??-????-?-????.?-????-????-???-??-???-???? Object 1000's= Certificated Salaries 2000's= Classified Salaries 300X= If X is odd, Certificated Benefits 300X=If X is even, Classified Benefits 4000's=Supplies, Books, Items under $5000

15. SACS ??-????-?-????.?-????-????-???-??-???-???? Object 5000's=Travel, Contractors, Utilities 6000's= Capital Assets 7000's=Indirect Costs, Interfund Transfers 8000's= Revenues 9000's=General Ledger Accounts, the MONEY

16. SACS ?-????-?-????.?-????-????-???-??-???-???? Goal What program is going to benefit from this expenditure

17. SACS ??-????-?-????.?-????-????-???-??-???-???? Function Used to categorize the purpose of the expenses, such as regular instruction, Special s ed., support services, administration, etc.

18. SACS ??-????-?-????.?-????-????-???-??-???-???? Location, Type 2,3,4 Used to help break out specific spending we want to track, such as by location and by certain small programs

19. SACS Will be revision in in the district level codes next year Sub-Object, Site, T2, T3, T4 Chart of Account Codes Handout

20. Questions Take 2 SACS Questions? Questions that discussion brought up? 2-5 Minute Break?

21. Revenue Cuts and Deficit Spending (Concept)

22. Revenue Cuts and Deficit Spending How to solve the Deficit? – Staffing Formulas – Efficiency/Efficacy Purchases Staff Time – Better Budgeting – Better Controls – Better use of Restricted Money

23. Reports in the Board Packet Deposit Report – Actual Cash Received and deposited B-Warrant Report – B-Warrant vs. PO/PV – What information would the board like? Budget Transfers – Adjustments for new priorities and actual expenses Contracts – All contracts will go to board – Example-Any other info wanted?

24. Reports in the Board Packet Deposit Transaction

25. Reports in the Board Packet Vendor History Report

26. Reports in the Board Packet Budget Transfers

27. Reports in the Board Packet Contract Cover Sheet Handout Gives you the overview of the contract as well as costs and services All agreements will be sent for your approval – Usually for approval before execution – Special circumstances Contracts are HIGH RISK-Require Careful Evaluation

28. Questions The Third (My turn) – What might help you better understand reports? – Is there other information you would like?

29. Local Control Funding Formula(LCFF) NOT FINALIZED AT ALL Everything presented regarding the LCFF is at the earliest stages of development At this time the actual dollar amounts cannot be calculated reliably due to unanswered questions This is for your information on how the current formulas have been presented

30. But first… Deferrals – Timing of Monies – No “new” money, less debt service Prop 30 – The reality…no new money – Plugged the hole, didn’t add more liquid Prop 39 COLA?... We shall see

31. LCFF Basic Grant Supplemental (weighted) Grant Concentration (weighted) Grant Augmentations to the Base Grant Add-ons to formula Separately funded programs Hold-harmless and transition From SI&A Budget Perspectives Workshop

32. LCFF Base Grant per ADA by grade span (no more revenue limit) K-3 = $6,342 7-8 = $6,628 4-6 = $6,437 9-12 = $7,680 When LCFF fully implemented (estimated in 7- years), Base Grant should equal the undeficited statewide average revenue limit for the current year ($6,816) From SI&A Budget Perspectives Workshop

33. LCFF Supplemental Grant – Equal to 35% of Base Grant for each English Learner (EL), Economically Disadvantaged (NSLP eligible), and/or foster student – unduplicated count Concentration Grant – Equal to 35% of Base Grant For Each EL, Economically Disadvantaged, and foster student above 50% concentration threshold EL students eligible for Supplemental and Concentration Grants for no more than 5 years From SI&A Budget Perspectives Workshop

34. LCFF Augmentations to the Base Grant – K-3 Class Size Reduction funding augments the K- 3 Grade Span Base Grant - 11.23% (approx. $712) – CTE funding augments the 9-12 Grade Span Base Grant - 2.8% (approx. $215) Add-ons – Home-To-School Transportation and Targeted Instructional Improvement Grant (TIIG) funding permanently added to the entitlement for districts currently receiving those funds From SI&A Budget Perspectives Workshop

35. LCFF An “Entitlement Target” will be calculated for each district – Equal to Base Grant + Supplemental Grant + Concentration Grant + Augmentations + Add-Ons – Entitlement Target adjusted each year for COLA, demographic changes, grade span changes 2013-14: each LEA receives at least a hold-harmless amount equal to 2012-13 funding for revenue limits + included categoricals Each FY thereafter: each LEA receives some amount of growth, added to the hold-harmless amount, that moves the LEA toward its Entitlement Target Administration estimates 7 years to reach Entitlement Targets – 50% of Prop. 98 growth used to move LEAs toward Entitlement Targets (other 50% buys down deferrals) – Growth funding proportionally moves all LEAs toward the Entitlement Targets From SI&A Budget Perspectives Workshop

36. LCFF- What is not included Federally funded programs Lottery Special Education After School Education and Safety Child Nutrition Preschool Programs which resulted from Lawsuits etc. which cannot be changed From SI&A Budget Perspectives Workshop

37. LCFF Categoricals mostly gone Substantially more flexibility with state funds Subsidiarity Timing unknown – Fast Track – Slow Track As more details emerge we will begin examining the potential impact

38. Questions