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1. Fiduciary Duty  Legal authority  Malfeasance 2 Who is minding the store?

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Presentation on theme: "1. Fiduciary Duty  Legal authority  Malfeasance 2 Who is minding the store?"— Presentation transcript:

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2 Fiduciary Duty  Legal authority  Malfeasance 2 Who is minding the store?

3 Fiduciary Duty  Legal authority  Malfeasance 3 What this means… The School Board determines how the funds are to be spent. The local governing body determines appropriation levels. VA Code: 22.1-89 Management of funds “Each School Board shall manage and control the funds made available to the School Boards for public schools and may incur costs and expenses.”

4 Fiduciary Duty  Legal Authority  Malfeasance 4 VA Code: 22.1-91 Limitation on expenditures “No school board shall expend or contract to expend, in any fiscal year, any sum of money in excess of the funds available for school purposes for that fiscal year....” What this means… The School Board can not exceed the appropriation levels determined by the local governing body.

5 So, who IS minding the store ?  Superintendent  CFO/Director of Finance/Assistant Superintendent  School Board 5

6 BUDGET 6

7 Budget  Superintendent’s role  School Board role  Local governing body role 7 Who does what…when?

8 ORIGIN OF WORD “Budget” 8 VIDEO about word “budget” from Hotforwords.com

9 The origin of our word budget is the Latin bulga, a little pouch or knapsack. The word turned up in English in the fifteenth century, having travelled via the French as “leather bag” where housewives kept their money. Video source: Hotforwords.com ORIGIN OF WORD “Budget”

10 Superintendent’s Role 10  Development of needs-based budget  Compensation decisions  Date requirements What LCPS does….

11 School Board Role  Sometimes direction to Superintendent on priorities  Public hearings (formally advertised)  Public input (community info)  Submission to local governing body 11 What LCPS does….

12 Local Governing Body Role  Fiscal guidance?  Appropriation – lump sum or state category?  It’s all about relationships…. 12 What LCPS does….

13 Budget Development: Key Players  Board of Supervisors  School Board  Superintendent  Senior Staff  Department of Business and Financial Services  School Administrators  Parents and School Community  Education Association 13

14 Standard Budget Reports  Budget reports Trend data Comparisons with previous year Explanations of changes – cost of salaries Enrollment projections Peer comparisons 14

15 FINANCE

16 Finance  School activity funds  Finance committee  School operating fund Where the money goes How to monitor? Financial reporting 16

17 School Activity Funds  Basic principles Funds used for purpose collected Projects shall contribute to educational experience Funds derived by student body used for student body Students encouraged to participate in management Funds managed with sound business practices Note no oversight responsibility of PTAs/PTOs/Boosters 17

18 Finance Committee  Contracts/Procurement Virginia Public Procurement Act (VPPA) Sanctions significant School Board policy Competition thresholds 18

19 Standard Finance Reports  Monthly financial reports Reporting by state category  Quarterly financial reports Expenditure and revenue summary Expenditure detail (by Dept, by Program, by Subobject) 19

20 LCPS Monthly Report- State Category ex. 20 State CategoryOriginal BudgetRevised BudgetActualBalanceExpended Operating Fund Instruction$540,362,397$560,301,189$443,090,286$117,210,90379.08% Admin, Attend & Health$34,590,145$38,420,337$34,496,855$3,923,48289.79% Facilities$2,308,489$4,224,570$3,059,755$1,164,81572.43% Operation & Maintenance$65,840,169$64,436,188$55,227,551$9,208,63685.71% Pupil Transportation$52,466,940$53,052,165$39,733,172$13,318,99374.89% Technology$25,277,522$30,838,772$22,709,099$8,129,67473.64% Debt Service & Fund Transfers$0$7,434,609$7,434,609$0100.00% Fund Subtotal$720,845,662$758,707,831$605,751,327$152,956,50479.84% Food Service Fund Food Services$24,034,272$24,034,272$18,318,973$5,715,29976.22% TOTAL $744,879,934$782,742,103$624,070,300$158,671,80379.73%

21 LCPS Quarterly Report – Summary ex. 21 ExpendituresFY BudgetExpenditures EncumbrancesCurrent Balance% SpentProjectionBalance Salaries$443,907,086$283,244,196$0$160,662,89064%$149,830,464$10,832,426 Employee Benefits$173,175,217$122,025,112$0$51,150,10570%$47,980,520$3,169,585 Contractual Services$20,616,004$13,282,156$3,440,205$3,893,64381%$3,493,643$400,000 Internal Services$11,873,258$7,269,088$0$4,604,17061%$4,604,170$0 Utilities$16,236,799$8,340,677$14,400$7,881,72251%$5,261,722$2,620,000 Communication$3,145,404$1,932,485$5,476$1,207,44362%$1,147,443$60,000 Insurance$1,460,919$1,230,325$0$230,59484%$230,594$0 Materials, Supplies$26,103,487$15,871,987$1,654,404$8,577,09567%$8,577,095$0 Training and Mileage$1,820,412$1,016,703$30,253$773,45658%$583,456$190,000 Continuing Education$548,042$350,468$1,385$196,18964%$196,189$0 Leases & Rentals$536,484$371,729$34,946$129,80976%$129,809$0 Ops & Maintenance$8,500-$24,748$0$33,248-291%$33,248$0 Capital Outlay$1,843,271$342,180$69,984$1,431,10722%$1,431,107$0 Transfer Out$5,168,683 $0 N/A$0 Total Expenditures$706,443,566$460,421,041$5,251,053$240,771,47166%$223,499,460$17,272,011 RevenueFY BudgetRevenue Received Current Balance% Rec.ProjectionBalance County$470,818,084 $0100%$0 State$196,451,138$140,960,915 $55,490,22372%$62,490,223$2,953,903 Federal$120,000$171,602 -$51,602143%-$51,602$0 Other$5,654,344$4,607,493 $1,046,85181%$1,046,851$0 Appropriated Fund Bal.$33,400,000 $0100%$0 Total Revenue$706,443,566$649,958,094 $56,485,47292%$63,485,472$2,953,903 Projected Change to Fund Balance @ June 30 $20,225,915

22 VSBA Quarterly Report – Detail ex. 22

23 23 EXPENDITURES

24 LCPS School Operating Fund Where the money goes 24 All other costs 12% Salaries & benefits 88%

25 Fund Balance/Surplus/Savings  Coming soon to a Local Governing Body meeting  Important issue facing School Boards across the Commonwealth  Why it happens and why it matters 25

26 Why it happens and why it matters What is lapse and turnover?  Fluctuations of budget to actual  Position lapse and turnover  CAUTION, CAUTION  Only flexibility the division has… 26

27 How To Address It  Budget a large negative number  Make assumptions for vacant / new positions  Other variables  Predicting human behavior 27

28 Surpluses Come From Savings  Surpluses are not a surprise  All school division’s budgets should have unspent funds  School divisions cannot exceed their appropriations 28

29 REVENUE 29

30 LCPS - Where the money comes from FY 2013Amount ($ in millions)  Carryover $10.0  Local/County Funding$528.0  State Revenue$250.1  Federal Funds$14.1  Other Funds$6.9 Total$809.1 30 Local/County 65.3% State 30.9%

31 Local/County Funding 31 Source: FY 2012 WABE Guide Tax Rate$1.235 per $100 of assessed value Value of 1¢$8.0 million

32 State Funding & the Local Composite Index 32 Source: DOE website Components True Value of Property Adjusted Gross Income Taxable Retail Sales LCPS LCI -.5666 According to the LCI, locally we should be able to pay for about 57 percent of the costs of education and the Commonwealth should pick up 43 percent.

33 Adjusted ADM (K-12) 66,814 State per pupil amount$5,594 Total$373.8 million Less sales tax($59.3 million) Total Basic Aid$314.5 million State share.4334 State funding$136.3 million Basic Aid Calculation Weldon Cooper July 2010 1,569,153 Weldon Cooper LCPS 77,491 LCPS Percentage4.938% Sales tax statewide $106.9 billion Education share 1.125%$1.2 billion LCPS percentage4.938% Sales tax funding$59.3 million Sales Tax Calculation

34 OTHER STUFF 34

35 Other Stuff You Should Know  Misinformation  Simplify, simplify, simplify  Strategies to cut spending 35

36 Misinformation VIDEO from Saturday Night Live Gilda Radner and Chevy Chase “Violins on Television” Can be found at Hulu.com

37 The Things I’ve Learned….  The media sometimes gets it wrong  If your version isn’t out there, it doesn’t exist.  Tell the story better  Everyone has to help 37

38 Simplify, Simplify, Simplify 38  What kind of information do employees need?  What can be easily understood?  The right data will tell your story.  Peer comparisons  Pupil/teacher ratios  Cost per pupil  Compensation packages  School-based and non-school based positions

39 Strategies to Cut Spending  Last in first out  Reduce staffing greater than SOQ  Review current vacancies  Reduce extended contracts  Increase class size  Healthcare co-pays and deductibles 39  Reduce employer share of healthcare  Defer equipment replacement plans  Mid-year salary enhancements  Increase fees  Selective elimination of programs

40 40 QUESTIONS? Leigh.Burden@LCPS.org


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