Preparing Your Budget to Meet the ASBO Meritorious Budget Award Criteria Illinois ASBO Annual Conference May 20, 2010

2 Presenters Barrington CUSD 220 – Barrington CUSD 220 – Gary Frisch CPA – Chief Financial Officer Gary Frisch CPA – Chief Financial Officer MBA Reviewer – ASBO MBA Reviewer – ASBO George Lingel George Lingel PMA Financial Network, Inc PMA Financial Network, Inc Vladimir Dragosavljevic Vladimir Dragosavljevic

3 MBA Program What is the MBA? What is the MBA? Best Standards in the Industry Best Standards in the Industry Feedback from Reviewers – Experts Feedback from Reviewers – Experts MBA Improves Community Perceptions MBA Improves Community Perceptions Toot Your Own Horn Toot Your Own Horn

4 What’s in it for the Business Official Build Solid Skills Build Solid Skills Developing and Analyzing Budgets Developing and Analyzing Budgets Preparing Budgets using State of the Art Criteria Preparing Budgets using State of the Art Criteria Feedback – Continuous Improvement Feedback – Continuous Improvement Recognition Recognition Community Community Board Board Superintendent Superintendent Marketability Marketability

5 What is in the MBA? Four Sections Four Sections Introductory Section Introductory Section Organizational Section Organizational Section Financial Section Financial Section Informational Section Informational Section Six Page Criteria Checklist: Six Page Criteria Checklist: Criteria Criteria What does an outstanding presentation need to have? What does an outstanding presentation need to have?

6 The MBA Criteria Makes it relevant Makes it relevant Uses the best standards in the industry Uses the best standards in the industry Shows relevance to the classroom Shows relevance to the classroom Uses narrative, charts, graphs and tables Uses narrative, charts, graphs and tables Accommodates different levels of interest Accommodates different levels of interest Executive Summary to Greater levels of Detail Executive Summary to Greater levels of Detail

7 Introductory Section Is an executive summary of the organizational, financial and information sections. Is an executive summary of the organizational, financial and information sections. It is meant to be a stand alone document which tells the complete story It is meant to be a stand alone document which tells the complete story It tells the story in narrative, numerical and graphical forms. It tells the story in narrative, numerical and graphical forms.

8 Organizational Section Information about your school district Information about your school district Significant Financial and Budgetary Policies Significant Financial and Budgetary Policies Goals and Objectives of the Organization Goals and Objectives of the Organization Description of the Budget Process and the management of the Budget Description of the Budget Process and the management of the Budget

9 Financial Section Presentation of all governmental funds Presentation of all governmental funds Use a Pyramid Approach Use a Pyramid Approach Describe significant revenue sources and significant expenditure categories Describe significant revenue sources and significant expenditure categories Describe District Goals and Objectives that are not met Describe District Goals and Objectives that are not met

10 Financial Section A pyramid approach should be used: a summary of all funds, followed by the presentation of individual funds A pyramid approach should be used: a summary of all funds, followed by the presentation of individual funds Optional: The presentation may be followed by program, location, and/or administrative unit budgets Optional: The presentation may be followed by program, location, and/or administrative unit budgets

11 Informational Section Information on taxes and assessed valuation Information on taxes and assessed valuation The Budget’s effect on the individual taxpayer The Budget’s effect on the individual taxpayer Three years of financial forecasts Three years of financial forecasts Student enrollment Student enrollment Personnel resource allocation Personnel resource allocation Student performance measures Student performance measures

12 Benefits of the MBA Business Manager’s Perspective Business Manager’s Perspective You will become more informed on all aspects of your Organization including instructional performance You will become more informed on all aspects of your Organization including instructional performance You will be ready for any question from the public You will be ready for any question from the public You will have one document that contains everything from financial forecasts to enrollment projections to staffing allocations You will have one document that contains everything from financial forecasts to enrollment projections to staffing allocations You will have earned credibility with your Board and Community You will have earned credibility with your Board and Community Recognition by ASBO and your peers Recognition by ASBO and your peers

13 Benefits of an MBA Positively viewed by ratings agencies Positively viewed by ratings agencies Standard and Poor’s Financial Management Assessment (FMA) areas of analysis Standard and Poor’s Financial Management Assessment (FMA) areas of analysis Revenue and Expenditure Assumptions Revenue and Expenditure Assumptions Budget Amendments and Updates Budget Amendments and Updates Long-term Financial Planning Long-term Financial Planning Long-term Capital Planning Long-term Capital Planning Investment Management Policies Investment Management Policies Debt Management Policies Debt Management Policies Reserve and Liquidity Policies Reserve and Liquidity Policies

14 Invest in Yourself Your Document is Reviewed by a Certified MBA Reviewer Your Document is Reviewed by a Certified MBA Reviewer What does an MBA Reviewer look for? What does an MBA Reviewer look for? Introductory section – An Executive Summary “liftable” Introductory section – An Executive Summary “liftable” Organization section – Significant Board Policies Organization section – Significant Board Policies Financial section – Pyramid Approach Financial section – Pyramid Approach Information Section – Tax Information & Projections Information Section – Tax Information & Projections  Feedback – Constructive Criticism - meant to improve your budget for next year!

15 Next Year Submittal You must address the changes listed in the MBA review letter from last year in a separate letter. You must address the changes listed in the MBA review letter from last year in a separate letter. New reviewer will look at the MBA document to see if the suggested changes have been made or reasons why a change cannot be made. New reviewer will look at the MBA document to see if the suggested changes have been made or reasons why a change cannot be made. A reviewer will not be allowed to evaluate budgets from within their own state. A reviewer will not be allowed to evaluate budgets from within their own state.

16 Common Pitfalls The Introductory section is not complete – It should tell the budget story without the need for the reader to look at the other sections. The Introductory section is not complete – It should tell the budget story without the need for the reader to look at the other sections. Financial Section does not use the pyramid approach. Financial Section does not use the pyramid approach. Beginning and Ending Fund Balances are missing. Beginning and Ending Fund Balances are missing.

17 Reviewer Tips Use the MBA Criteria Checklist and the Corresponding MBA Criteria Narrative to ensure you have met all the required criteria Use the MBA Criteria Checklist and the Corresponding MBA Criteria Narrative to ensure you have met all the required criteria Use a separate letter to explain why one or more of the criteria could not be met Use a separate letter to explain why one or more of the criteria could not be met Proof read your document Proof read your document Use the same font through-out the document Use the same font through-out the document

18 Improve Community Perceptions Demonstrating a Comprehensive Fiscal Perspective Demonstrating a Comprehensive Fiscal Perspective Demonstrating Transparency Demonstrating Transparency Demonstrating Long Range Planning Demonstrating Long Range Planning

19 Benefits from a Financial Perspective Given the current limited market for bond insurance, underlying credit ratings have become much more important for districts issuing debt Given the current limited market for bond insurance, underlying credit ratings have become much more important for districts issuing debt High Credit Scores can be linked to the same criteria listed in the MBA. High Credit Scores can be linked to the same criteria listed in the MBA. Strong Board Policies and Five Year Forecasting Strong Board Policies and Five Year Forecasting

20 Facilities Plan

21 Financial Section Samples

22 Financial Section Samples

23 Financial Section Samples

24 Informational Section Samples

25 Informational Section Samples

26 Informational Section Samples

27 Informational Section Samples

28 Informational Section Samples

29 Informational Section Samples

30 Final Thoughts Strive for Excellence Strive for Excellence Invest in Yourself Invest in Yourself Improve Community Perceptions Improve Community Perceptions

31 Application Process Submissions are due 90 days after budget adoption Submissions are due 90 days after budget adoption Electronic or paper copies of the budget Electronic or paper copies of the budget Application Form Application Form Criteria Checklist Criteria Checklist Fee – ASBO member discounts, sliding scale based upon district size Fee – ASBO member discounts, sliding scale based upon district size

32 Application Mentors Gary Frisch Gary Frisch George Lingel George Lingel Vlad Dragosavljevic x 6410 Vlad Dragosavljevic x 6410

Questions And Discussion