1. 1

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. 6 BUDGET

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

8. 8 ORIGIN OF WORD “Budget” Used VIDEO on 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. 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. 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

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 Sub object) 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 ExpendituresFY11 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 RevenueFY11 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, 2011 $20,225,915

22. 22 VSBA Quarterly Report – Detail ex.

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. Source: FY 2010 Comprehensive Annual Financial Reports All school divisions have unspent funds at the end of the year. Division Percentage Alexandria 6.5% Arlington 6.8% Fairfax 6.5% Falls Church 6.6% Loudoun 5.7% Manassas 7.1% Prince William 6.4% Unspent Funds

30. 30 REVENUE

31. LCPS - Where the money comes from FY 2012Amount ($ in millions)  Carryover $10.0  Local/County funding$494.0  State revenue$221.6  Federal funds$13.2  Other Funds$7.2 Total$746.0 31 Local/County 66.2% State 29.7%

32. Local/County Funding 32 Source: FY 2012 WABE Guide Tax Rate$1.285 per $100 of assessed value Value of 1¢$7.5 million

33. State Funding & the Local Composite Index 33 Source: DOE website Components True Value of Property Adjusted Gross Income Taxable Retail Sales LCPS LCI -.5854 According to the LCI, locally we should be able to pay for about 58 percent of the costs of education and the Commonwealth should pick up 42 percent.

34. Adjusted ADM (K-12) 61,893 State per pupil amount$5,448 Total$337.2 million Less sales tax($51 million) Total Basic Aid$286.2 million State share.4146 State funding$118.7 million Basic Aid Calculation 08 Triennial census statewide1,511,877 08 Triennial census LCPS71,489 LCPS Percentage4.7285% Sales tax statewide $95.9 billion Education share 1.125%$1.1 billion LCPS percentage4.7285% Sales tax funding$51 million Sales Tax Calculation

35. 35 OTHER STUFF

36. Other Stuff You Should Know  Misinformation  Simplify, simplify, simplify  Strategies to cut spending 36

37. Misinformation Used VIDEO from SNL “Violins on Television” from HULU.com

38. Misinformation  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 38

39. Simplify, Simplify, Simplify 39  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

40. 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 40  Reduce employer share of healthcare  Defer equipment replacement plans  Mid-year salary enhancements  Increase fees  Selective elimination of programs

41. Random thoughts about work…

42. ….and life in general

43. The nice thing about teamwork is you always have others on your side. Margaret Carty American Author

44. I can’t remember the last time I wasn’t at least kind of tired. Author Unknown

45. Can we all just agree to ignore whatever comes after Blue Ray? I don't want to have to restart my collection...again. Author Unknown

46. Snowflakes are one of nature’s most fragile things, but just look what they can do when they stick together. Author Unknown

47. I disagree with Kay Jewelers. I bet on any given Friday or Saturday night more kisses begin with Miller Lite than Kay’s. Author Unknown

48. A positive attitude may not solve every problem, but it makes solving any problem a more pleasant experience. Grant Fairley Motivational Speaker

49. Obituaries would be a lot more interesting if they told you how the person died. Author Unknown

50. Delegating work works, provided the one delegating works too. Robert Half Founder of Staffing Firm

51. The trouble with doing nothing is you never know when you’re done. Author Unknown

52. It is amazing how much you can accomplish when it doesn't matter who gets the credit. Harry S. Truman 33 rd President, United States

53. I hate it when I just miss a call (Hello? Darn it!), but when I immediately call back, it rings nine times and goes to voicemail. What'd you do after I didn't answer? Throw the phone and run away? Author Unknown

54. It is hard to lead a cavalry charge if you think you look funny on a horse. Adlai Stevenson Former Vice President & Congressman

55. No one can whistle a symphony, it takes a whole orchestra to play it. Halford E. Luccock American Methodist Minister

56. I totally take back all those times I didn't want to nap when I was younger. Author Unknown

57. Men have never been individually self-sufficient. Reinhold Niebuhr American Theologian

58. I think part of a best friend's job should be to immediately clear your computer history if you die. Author Unknown

59. I keep some people’s phone numbers in my phone just so I know not to answer when they call. Author Unknown

60. Nothing sucks more than that moment during an argument when you realize you're wrong. Author Unknown

61. Map Quest really needs to start their directions on #5. I'm pretty sure I know how to get out of my neighborhood. Author Unknown

62. What separates those who achieve from those who do not is in direct proportion to one’s ability to ask for help. Donald Keough Former Coca Cola President

63. You moon the wrong person at an office party, and suddenly you aren’t “professional” anymore. Author Unknown

64. Teamwork is the fuel that allows common people to attain uncommon results. Andrew Carnegie Entrepreneur & Philanthropist

65. I'm always slightly terrified when I exit out of Word and it asks me if I want to save any changes to my ten-page document that I swear I did not make any changes to… Author Unknown

66. The best way to appreciate your job is to imagine yourself without one. Oscar Wilde Irish Writer/Poet

67. You never know when it will strike, but sometimes there comes a moment at work when you just know that you aren't going to get anything productive done for the rest of the day. Author Unknown

68. A pat on the back is only a few vertebrae removed from a kick in the pants, but is miles ahead in results. Ella Wilcox American Author/Poet

69. I hate leaving my house confident and looking good and then not seeing anyone of importance the entire day. What a waste. Author Unknown

70. The only place where success comes before work is in the dictionary. Donald M. Kendall Former CEO Pepsico

71. There is a great need for a sarcasm font. Author Unknown

72. Working together works. Author Unknown

73. Bad decisions make good stories. Author Unknown

74. Simply stated, it is less me and more we. Author Unknown

75. I think the freezer deserves a light as well. Author Unknown

76. None of us is as smart as all of us. Ken Blanchard American Author & Management Expert

77. We are all in this together….

78. 78 QUESTIONS? Jennifer.Bergel@LCPS.org Leigh.Burden@LCPS.org