1. School Finance Introduction

2. Thanks !  “Line Item” Components  Budget Reports  Budget Adjustment Requests (BAR’s)  Council Meeting Reports  Other Duties of the Council  Tips for Financial Oversight

3. LINE ITEMS XXXXX. XXXX. XXXXX. XXXX. XXXXXX. XXXX. XXXX Fund Function Object Program Location Job Class Data 28 DIGITS

4. What are line items? FundFunctionObjectProgramJob class 1100010005110010101411 Funds: 11000 – State Equalization Guarantee – generated by # of Students, a grade level weighting factor and Unit values (dollar amount) 14000 – Instructional Materials – textbooks, materials and supplies 24106 – Special Education – generated by the number of students with special needs and the levels of service that is written into their IEP; flows through the Aztec School District 27106 – Student Library Funds - from sale of 2010 GO Bonds at the state level 27114 – NM Read to Lead K-3 – PED initiative to improve student reading skills 26170 – Non-recurring vouchers awarded by the Attorney General as a result of a settlement with Microsoft. There is slightly over $7,000 left in this fund 31200 – Lease reimbursement Grant – generated by the number of students enrolled on the previous year’s 40 th day count multiplied by a set dollar value 31700 – Small guaranteed funding per student; PLUS, new this year, our share of the property taxes collected from residential and business owners. Equipment/software for student use.

5. What are line items? FundFunctionObjectProgramJob class 1100010005110010101411 Functions: 1000 –Instruction – includes all expenses that specifically involve instruction of students in the classroom 2000 – Support Services – includes expenses incurred in the support of classroom instruction 3100 – Food Services to students 4000 – Facilities Acquisition and Construction These are required reporting codes – additionally, under the 2000 and 4000, there are further breakdowns of expenditures to reflect exactly where those funds are going. For instance: 2100 – attendance, counseling, health, speech; 2200 – library, testing, technology; 2300 – audit, council expenses; 2400 office of the principal, etc. The PED requires that we report expenditures only to the second digit of the function code.

6. What are line items? FundFunctionObjectProgramJob class 1100010005110010101411 Object: (WHAT is being purchased) Describes the expenditure. For instance – salaries, supplies, small assets, software, construction, other contract services, etc. Program: (WHO is benefiting from the purchase) General education students, special education students or no specific group of students Job class: (What POSITION is being paid a salary) Teacher, teaching assistant, clerical, substitute for sick leave, substitute for professional development, etc. Line items allow us to track expenditures for the purpose of budgeting and ensuring that funds are being expended in support of the goals and needs of the students of the school.

7. Budget Rollup Report GL AccountDescriptionBudgetYTDExpendEncumbranceBudget Bal 11000-1000-51100-0000- 000000-0000-0000 SALARIES EXPENSE522,889.001,187.50511,780.549,920.96 11000-1000-51300-0000- 000000-0000-0000 ADDITIONAL COMPENSATION9,400.00.00 9,400.00 11000-1000-52111-0000- 000000-0000-0000 EDUCATIONAL RETIREMENT56,490.00138.341,980.2154,371.45 11000-1000-52112-0000- 000000-0000-0000 ERA RETIREE HEALTH6,304.0015.44159.146,129.42 11000-1000-52210-0000- 000000-0000-0000 FICA PAYMENTS30,063.0073.631,020.4228,968.95 11000-1000-52220-0000- 000000-0000-0000 MEDICARE PAYMENTS7,032.0017.22238.656,776.13 11000-1000-52311-0000- 000000-0000-0000 HEALTH & MEDICAL PREMIUMS83,241.00.00 83,241.00 11000-1000-52312-0000- 000000-0000-0000 LIFE702.001.3615.14685.50 11000-1000-52313-0000- 000000-0000-0000 DENTAL5,284.00.00 5,284.00 11000-1000-52314-0000- 000000-0000-0000 VISION827.00.00 827.00 11000-1000-52315-0000- 000000-0000-0000 DISABILITY71.00.00 71.00 11000-1000-52500-0000- 000000-0000-0000 UNEMPLOYMENT7,922.006,055.85.001,866.15

8. Budget Adjustment Request (BAR) BUDGET = PLAN FOR SPENDING So what happens if, in our best planning efforts, we cannot foresee what line items we will actually need or how much we might need in a specific line item. When a line item does not have sufficient budget to support needed expenditures, then a Budget Adjustment Request must be submitted to the Council for approval. If the request is within the same function, it does not require PED approval – only Council approval. This is often called a “Maintenance BAR”

9. PED Budget Adjustment Request If we are requesting to move funds from one function to another, we must first obtain Council approval and then submit to the PED for their approval. PED has 30 days to provide approval of the request. If additional funding becomes available or if we are notified of a decrease in funding, we are required to correct our budget through this process as well. A BAR that is submitted to the PED for approval will look similar to this.

10. Governing Council Financial Documents  In your Council Packet you will see the  Budget rollup report, both Revenue and Expenditure  Includes % Remaining Column to far right  Accounts Payable Check listing  Payroll Check listing  Bank Reconciliations  Bank Statements for all three accounts  Operational Account – revenue for all funds is deposited here  Accounts Payable Clearing (zero balance) Account – used to process checks written to pay vendors  Payroll Clearing Account – used to process all payroll expenses  Any maintenance or PED BAR’s being requested

11. Bank Documents MOSAIC ACADEMY CHARTER CHECK LISTING Bank ID:CBBank Account:0198780106From:8/1/2008 To:8/31/2008 Bank Name:Accounts Payable Clearing NumberDatePayeeAmountVoucherStatusClearedCheck Type 172408/08/2008AZTEC HARDWARE CO$54.001003PrintedExpense 172508/08/2008AZTEC MUN.SCH TRANSPORTATION$378.801003Printed Expense 172608/08/2008BILL IRWIN$193.731003PrintedExpense 172708/08/2008CITY OF AZTEC$537.231003PrintedExpense 172808/08/2008HA ELECTRIC PLUS INC$2,160.691003PrintedExpense 172908/08/2008PUERTA DOOR & HARDWARE INC.$107.001003Printed Expense 173008/08/2008SCHOOL SPECIALTY$12,049.351003PrintedExpense 173108/08/2008STONE MOUNTAIN FLOORING$228.221003Printed Expense 173208/08/2008The Barnyard$150.001003PrintedExpense 173308/08/2008TNT$841.261003PrintedExpense 173408/18/2008ARID MECHANICAL, INC, DBA$229.371004Printed Expense 173508/18/2008BODE ELIZABETH D.$275.001004PrintedExpense 173608/18/2008CITY OF AZTEC$3,731.481004PrintedExpense 173708/18/2008CRANE & SONS$9,233.001004PrintedExpense 173808/18/2008HA ELECTRIC PLUS INC$1,851.501004PrintedExpense 173908/18/2008J&T Distributing Co., Inc.$49.301004PrintedExpense 174008/18/2008KNIGHT, AMANDA$275.001004PrintedExpense 174108/18/2008SCHOOL SPECIALTY$1,983.601004PrintedExpense 174208/18/2008WILLIAMS SCOTSMAN INC.$1,251.161004PrintedExpense 174308/19/2008WILLIAMS SCOTSMAN INC.$7,462.841005PrintedExpense 1744Printed Check Listing Bank Statements Bank Reconciliation

12. Bank Statements The bank statements are now received electronically and transmitted digitally to the contracted Business Manager. This process allows us to reconcile our accounts much more efficiently and timely. The Aztec Municipal School District Business Office also transmits our SEG payment electronically; which provides us with quicker access to the major source of our funding.

13. OTHER DUTIES OF THE COUNCIL  Serve on the Audit Committee  Participate in the selection process for hiring an auditor  Meet with auditors  Gain an understanding of the audit process and the audit report itself  Serve on the Finance Committee  Periodically report the financial stability of the Charter to the full Council  Periodically report the efficiency of the organization to the full Council  Serve on the budget committee

14. Oh, No !! This is a lot to be responsible for !!

15. TIPS FOR FINANCIAL OVERSIGHT Financial Document  Check Listings  Bank Reconciliations  Budget Reports  Budget Adjustment Requests (BAR’s)  Missing check numbers, unfamiliar vendors  Pending transactions, cash availability  Deficit accounts; %  Charter goals Watch For

16. ADDITIONAL THOUGHTS  Ask questions  Question vendors on the check list that you don’t recognize  Question checks to individuals that are for large amounts  Question recurring checks to a particular individual – whether large or SMALL  Question movement of cash from one bank account to another  Question “stale” adjusting entries on the bank reconciliation  Question stale dated outstanding checks  Question how the BAR’s affect the accomplishment of Council goals

17. ADDITIONAL TIPS  Occasionally  Ask us to show you the security available in the accounting software that decreases the opportunity for fraud  Ask to see manual journal entries and the backup documentation  Ask to see documentation for movement of cash  Ask to see original request form for a particular purchase  Ask to see documentation of best obtainable price  Ask to see documentation that supports control over cash up to point of deposit  Ask to see documentation that supports control over a fundraising activity  Ask to see documentation that shows importance of safety during a field trip  Ask to see the original void check and backup for the void