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WVSBA Orientation ’14 Waterfront Place Hotel Morgantown, WV June 24, 2014 J. P. Mowery, CPA Treasurer- Pendleton County Schools David McClure Treasurer-

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Presentation on theme: "WVSBA Orientation ’14 Waterfront Place Hotel Morgantown, WV June 24, 2014 J. P. Mowery, CPA Treasurer- Pendleton County Schools David McClure Treasurer-"— Presentation transcript:

1 WVSBA Orientation ’14 Waterfront Place Hotel Morgantown, WV June 24, 2014 J. P. Mowery, CPA Treasurer- Pendleton County Schools David McClure Treasurer- Greenbrier County Schools

2 » Balanced Budget? » Wisely Managing Resources? » Planning for the Future? » Statutory Component?

3 » 1. Liable to be required to give account, as of one's actions or of the discharge of a duty or trust. » 2. Involving personal accountability or ability to act without guidance or superior authority » 3. Able to be trusted or depended upon; reliable. » 4. Based on or characterized by good judgment or sound thinking » 5. Having the means to pay debts or fulfill obligations.

4 » A county board of education and a county superintendent shall comply with the instructions of the state board of school finance and shall perform the duties required of them in accordance with the provisions of this article.

5 » » The county superintendent shall: (1) Act as the chief executive officer of the county board….. and, under the direction of the state board, execute all its education policies.

6 » » The treasurer is the fiscal officer of the board, or an employee commonly designated as the person in charge of the financial affairs of the county board.

7 » Board of Education » Superintendent – Administrative Degree » Treasurer – Business Degree; CPA » Other Stakeholders – Other Administrators, Employees, Public

8 » What is a budget? » A document with numbers prepared by school board treasurer? » It is a necessary tool to guide the school system. » It is not just an annual event.

9 » WV Code 18-9b-5 » The board of finance shall formulate and prescribe a uniform system of school district budgeting for the use of all county school districts…

10 » Budgeting is the accepted method for governments to allocate scarce resources to demanded services. As a result, it is a powerful tool and one of the most important governmental processes…As the focal point for key resource decisions, the budget process can help governments make better financial and program decisions, improve operations, and enhance relations with citizens and stakeholders. -- National Advisory Council on State and Local Budgeting -

11 » Planning » Public Involvement » Legal – The legal basis for spending public funds » Control – Monitoring » Evaluation/Accountability

12 » To translate the school district’s educational priorities into program and financial terms— within available fiscal resources and legal constraints.

13 » Budget planning is a deliberate action. » It should provide a perspective on what has been done, what is now being done and what should be done in relationship to available resources. » Completion of the budget document does not terminate the planning process. Constant monitoring and updating is necessary.

14 » Goals, Vision, Mission » Needs Identified » Needs versus Wants » Programs

15 » Revenues (available resources) » Expenditures » Trends -- Present, Past, Future

16 » Local » State » Federal

17 Local Tax Sources  Regular Levy  Excess Levy  Other Levies  Local Share  Other

18 » Legislature sets regular levy rates » Statutory Requirements/Timelines » Local Share – Requirements » Excess Levy

19  Approximately 43 out of 55 Counties  Communicate Needs  It Can Not be Driven by the Board Members or by Administration

20  9% Kept for Local Needs  SB 541  Competition for Funds  Assessors’ Role

21  Example – State Funding Formula (Step 10) indicates $10,000,000 to fund school system.  Local taxes for education are $2,000,000  9% X $2,000,000 = $180,000  $10,000,000 - $1,820,000 = $8,180,000 state funding  School System Receives $2,000,000 local taxes, $8,180,000 state funding and receives a total of $10,180,000.

22 State Tax Sources  State Aid – Driven by Enrollment  State Grants  Special Education  Alternative Education  – School Building Authority  – Technology Allocations  -- Other

23 Federal Tax Sources Programs » Special Education » Title 1, Title 2 » Child Nutrition » E-Rate » Other

24 » Enrollment is the engine that drives state funding. » Trends, Projections… » 1 st Month Enrollment (Mid September) » 2 nd Month Enrollment (Mid October) -- Snapshot

25 » Personnel  80 to 90 Percent of Expenditures  Think Through Personnel Actions Carefully  Superintendent Makes Recommendations  Annual Expense

26 » Personnel » Operations  Utilities, Textbooks, Supplies, Equipment, Maintenance, Capital Improvements, Transportation » Fixed » Variable

27 » Generated by the WVDE Office of School Finance » Preliminary Usually Available in December » Very Important » State Funding Formula

28 » Step 1 – Allowance for Professional Educators » Step 2 – Allowance for Service Personnel » Step 3 – Allowance for Fixed Costs » Step 4 – Allowance for Transportation

29 » Step 5 – Allowance for Professional Student Support Personnel » Step 6a – Allowance for Other Current Expense » Step 6b – Allowance for Professional Personnel Substitute Costs » Step 6c – Allowance for Service Personnel Substitute Costs » Step 6d – Allowance for Faculty Senates

30 » Step 7(a) – Allowance for Improvement of Instructional Programs » Step 7b – Allowance for 21 st Century Technology Systems – WVDE Office of Technology » Step 7c – Allowance for Advanced Placement Programs » Step 8 -- Total Basic Program Allowance

31 » Step 9 – Local Share – Subtract 90% (91%) of Local Property Tax Levy » Be Aware of Assessed Valuation Requirements » Step 10 – Basic State Allowance for County Boards

32 » Necessary Throughout the Year » Circumstances Change » Ask Questions

33 » Funds expended only for purposes which raised

34 » Unlawful expenditures by local fiscal body -- A local fiscal body shall not expend money or incur obligations:  In an unauthorized manner;  For an unauthorized purpose;  In excess of the amount allocated to the fund in the levy order;  In excess of the funds available for current expenses.

35 ** A local fiscal body or its duly authorized officials shall not be penalized for a casual deficit which does not exceed its approved levy estimate by more than three percent, provided such casual deficit be satisfied in the levy estimate for the succeeding fiscal year..

36 Provided, however, That in calculating a deficit for purposes of this section, account shall not be taken of any amount for which the local fiscal body may be liable for the unfunded actuarial accrued liability of the West Virginia Retiree Health Benefit Trust (RHBT) Fund or any amount allocated to the local fiscal body as an employer annual required contribution that exceeds the minimum annual employer payment component of the contribution

37 (q) "Casual deficit" means a deficit of not more than three percent of the approved levy estimate or a deficit that is nonrecurring from year to year.

38 Fund Balance Handout

39 State Board of Education Office of Education Performance Audits

40 » Whenever a county board has more than a casual deficit, as defined in section one, article one of this chapter, the county board shall submit a plan to the state board specifying the county board's strategy for eliminating the casual deficit. The state board either shall approve or reject the plan.

41 » Whenever non-approval status is given to a school system, the state board shall declare a state of emergency in the school system and shall appoint a team of improvement consultants to make recommendations within sixty days of appointment for correcting the emergency.

42 » Personal liability of official participating in unlawful expenditure » A person who in his official capacity negligently participates in the violation of either section twenty-five or section twenty- six of this article shall be personally liable, jointly and severally, for the amount illegally expended.

43 » Recovery of unlawful expenditure from participating official by action; costs » A person who in his official capacity negligently participates in an illegal expenditure may be proceeded against for the recovery of the amount illegally expended. The political subdivision concerned, a taxpayer of the subdivision, the state tax commissioner or a person prejudiced may bring the proceeding.

44 » Criminal liability of official violating provisions of article; proceeding for removal. » A person who in his official capacity willfully violates the provisions of this article shall be guilty of a misdemeanor, and, upon conviction, shall be fined not more than five hundred dollars, or confined in jail not more than one year.

45 » Certain county officials may not have a financial interest in any amount in a public contract over which their public position gives them voice, influence or control. » Hardship waivers “may” be granted.

46 » Criminal liability of official violating provisions of article; proceeding for removal. » A person who in his official capacity willfully violates the provisions of this article shall be guilty of a misdemeanor, and, upon conviction, shall be fined not more than five hundred dollars, or confined in jail not more than one year.

47 » Monitoring the financial condition of a school system is a year-round process. » Reports at Board Meetings » Reports at LSIC/Faculty Meetings » Media Outlets » Public Involvement

48 » Financial/Budget Updates at Each Board Meeting.  Treasurer’s Report  Statement of Cash Flows  Budget to Actual Comparative Data  Trends  Ask Questions

49 » Financial/Budget Updates at Each Board Meeting.  Approval of the Bills

50 » Reduce Expenditures ˃Reduce Personnel Over The Formula +Including Professional Over 200 Days, Supplemental Pay, etc. ˃Reduce Operating Expenditures – Energy Savings, Supplies, etc. » Increase Revenue ˃Excess Levy, ˃Other? » Communicate Clearly

51 » Surplus/Deficit » Annual Financial Statements -- WV Code 18-9b- 9; a – Due 90 Days After the June 30 Year-End » Audit -- WV Code 18-9b-13; – Due by March 31 of the Following Year

52 » Know Your Numbers » Analyze Needs Versus Wants » Learn From the Past » Look Ahead -- Trends

53 » Fiscal Conservatism » Communicate » Students – It’s Why We Are Here

54 »Financial management of the school ˃ Ensure compliance with manual and local board policies ˃ Maintain internal control structure ˃ Communicate expectations ˃ Safeguard public assets (cash and capital assets) ˃ Provide full accounting to the staff, to the business office, and to the public 54 WVDE-OSF

55 »Liaison with school support organizations ˃ Ensure all organizations that intend to raise monies in the name of the school are approved by the board ˃ Approve all fund raisers 55 WVDE-OSF

56 »Insist that accounting procedures be followed: ˃ Receipts issued at the time monies change hands ˃ POs issued prior to purchases being made ˃ Monthly bank statements open by you personally ˃ Proper accounting maintained for all fund raising activities »Ensure that fiscal activities are monitored and reviewed periodically »Be actively involved in the financial management of the school 56 WVDE-OSF

57 »State Board Policy »Applies to every public school in WV, including multi-county vocational centers »Most recent update of the manual was effective on August 13, WVDE-OSF

58 »Most common area for financial irregularities »Receipt and disbursement procedures apply »Remit funds collected to school on a frequent basis »Prepare profit/loss statement for each fund- raising activity (must be signed by both the preparer and the principal) »Fundraising activities must be covered by liability insurance 58 WVDE-OSF

59 »School boards are legal entities created by statutory authority and may exercise only the powers designated by those statutes »Schools are not legal entities – may only expend quasi- public funds (boards cannot distribute public funds to the schools for expenditure) »All contracts must be signed by the board, or the superintendent, if designated by the board »Appendix C provides a list of expenditures specifically authorized or unauthorized by the State Attorney General opinions or State Superintendent of Schools interpretations 59 WVDE-OSF

60 »All moneys collected by a school are considered to be quasi-public funds and are to be expended for the benefit of the students at the school 60 WVDE-OSF

61 »Purchase of food and drink for meetings »Purchase of awardsfor staff ˃ Allowed only if part of a recognition program pursuant to W. Va. Code § WVDE-OSF

62 »Procedures for the operation of school support organizations to be established by board policy » At a minimum, each organization: ˃ Must be approved by the board in advance ˃ Must advise the principal of each fund-raiser that the organization intends to conduct ˃ Must provide an annual financial statement to the principal 62 WVDE-OSF

63  Each school support organization:  Must have its own FEIN and business registration certificate  May not use the school’s FEIN  Must be officially organized with a a set of published by-laws  Must prepare and make available written minutes of each meeting  Must maintain a transaction journal of all receipts and disbursements  Must establish proper accounting procedures 63 WVDE-OSF

64 »If an organization does not wish to obtain its own FEIN, must deposit funds in the school’s bank account (Cannot deposit funds in a bank account under an individual’s social security number) 64 WVDE-OSF

65 »Boards have the authority to examine the financial records of all school support organizations, including the operation of concession stands, fund raisers and gate collections 65 WVDE-OSF

66 66


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