1. California Association of School Business Officials Annual Conference 2008 FCMAT Presentation Presented by: Joel Montero, Chief Executive Officer Anthony Bridges, Deputy Executive Officer Barbara Dean, Deputy Administrative Officer Roberta Mayor, Chief Management Analyst Andy Prestage, Management Analyst

2. Overview What is the Fiscal Crisis and Management Assistance Team (FCMAT)? How Does FCMAT respond to requests? What are the basics of AB 1200/2756 oversight? FCMAT services Budget Explorer v.3.0 New Release Future software development for facilities Fiscal Health and Risk Analysis Tool Charter schools Regional teams

3. What is FCMAT? An independent/external public agency of the state designed to support districts and county offices Small core staff composed of former school district and county office employees (certificated and classified) Support is generally requested by school districts FCMAT can be assigned by the COE, Superintendent of Public Instruction or the Legislature FCMAT provides both management assistance and fiscal crisis intervention

4. How Does FCMAT Respond to Management Assistance Requests? LEA initiates the request and identifies the scope of work Online request forms available at www.fcmat.org Initial contact from FCMAT to discuss LEA needs Draft study agreement (contract) to consider LEA board approval of study agreement On-site fieldwork (2 to 4 days depending on scope of work) Draft report – findings and recommendations Final report – board presentation Ongoing support and follow-up

5. How Does FCMAT Respond to Fiscal Crisis Requests? LEA or COE initiates the request Online request forms available at www.fcmat.org Study agreement process is similar to MA request, although COE may be the one to define the scope Significant document request to LEA, including SACS.dat files Shorter time line Identification of pending shortfall in current and two subsequent years

6. How Does FCMAT Respond to Extraordinary Audit Requests? Under the provisions of 1241.5 (b) or (c), COE initiates the request Online request forms available at www.fcmat.org Study agreement process is similar Review/audit is conducted to verify allegations of fraud, misappropriation of funds, or other illegal fiscal practices Report issued County Superintendent presents the findings and recommendations to the district board within 45 days

7. The Basics of AB 1200/2756 COEs are now the “first line of defense” to protect the state from liability for school district financial problems The Governor’s January Budget is one of the most important fiscal triggers for COEs and oversight A qualified or negative certification does not mean a district will get an emergency loan! Some districts discover that problems are too big or are recognized too late for the COE to help resolve This just in – getting a state bailout loan is likely to spoil your whole day!

8. The Basics of AB 1200/2756 Response to emergency loans and districts in financial crisis Increases oversight at all levels Districts CFO and Superintendent must sign collective bargaining disclaimers and certify they are affordable Allow more time for COE review Cuts must be acted on by board County Superintendent Conditional approval of budgets Earlier intervention Qualify or make negative if procedures not followed Act to correct deficiencies

9. The Basics of AB 1200/2756 County office review at a minimum of these specific data collection points Budget approval First and second interim reporting Positive, qualified and negative certifications COE must assess solvency for the current plus one or two years Collective bargaining disclosures

10. The Basics of AB 1200/2756 Possible actions under a qualified certification Fiscal expert assignment Budget analysis and new financial projections Approval of new debt issuance Longer period of review for collective bargaining agreements Encumber all contracts and other obligations Withhold compensation from Superintendent and Governing Board

11. The Basics of AB 1200/2756 Possible actions under a negative certification All actions under a qualified plus: Develop and impose a budget in consultation Stay or rescind any action of the board that is inconsistent with fiscal recovery In consultation with the district, develop a fiscal recovery plan May not abrogate any provisions of the collective bargaining agreement Assign a Fiscal Advisor

12. The Basics of AB 1200/2756 In the event of insolvency (emergency loan ) Authority transfers to the California Department of Education Assignment of a State Administrator Governing Board becomes advisory only Recovery and the assignment of a State Trustee

13. FCMAT Services Management/technical assistance Web site (www.fcmat.org) Help desk Fiscal crisis intervention AB 1200/2756 Data management CSIS Ed Data

14. FCMAT Services Professional/Product Development CBO Mentor Program SB 352 CBO Training Program Budget Explorer v.3.0 Partnerships – CASBO, SSC, CSBA & Others

15. BE now supports districts and county offices For school districts Enrollment / ADA projection Revenue limit calculation For county offices of education ADA projection Revenue limit calculation BUDGET EXPLORER v.3.0 Multiyear Financial Forecasting Software for K-12 School Agencies

16. BE Overview Web-based and at no cost PC platform (1280 x 1024) Easy to learn and use Triple threat: District use, COE use, AB1200 monitoring Improves planning / monitoring / decision-making Detailed salary forecasts BUDGET EXPLORER v.3.0 Multiyear Financial Forecasting Software for K-12 School Agencies

17. BUDGET EXPLORER v.3.0 Multiyear Financial Forecasting Software for K-12 School Agencies BE overview: Detailed revenue limit calculation (DO or COE) “Cost of 1%” calculation (negotiation purposes) Auto balancing (ease-of-use) Documentation (AB1200 oversight / DO planning) Flexible report / audit-logging functions

18. BUDGET EXPLORER v.3.0 Multiyear Financial Forecasting Software for K-12 School Agencies Purpose AB 1200 – Budget and interim reporting Provide critical information prior to decisions Anticipate what would happen if… Enrollment declines by ? % Certificated salaries increased by ? % New school sites were constructed School closures Negotiations settled at ? %

19. Creating a new projection: Projections are created by uploading SACS data obtained From your financial system, or; From the state’s financial reporting (SACS) software RL supplemental form data is uploaded as well (if it has been entered), reducing data input BUDGET EXPLORER v.3.0 Multiyear Financial Forecasting Software for K-12 School Agencies

20. Sharing a Projection The ability to “share” projections Separates BEv3 as an information sharing, planning, and collaboration resource; Can be “R/O” or Can be “R/W” BUDGET EXPLORER v.3.0 Multiyear Financial Forecasting Software for K-12 School Agencies

21. BUDGET EXPLORER v.3.0 Multiyear Financial Forecasting Software for K-12 School Agencies Future BE evolution Cash flow/cash position AB1200 disclosure/negotiations Automated trend analysis MYP export back into SACS Export back into financial system

22. Future Software Product Development FCMAT will begin development of new facilities software in 2008-09 Purpose will be to assist K-12 agencies with multifunded facilities projects Reconcile data for all funds Support state reporting requirements for new construction, modernization, hardship, and emergency repair programs Extract data via Excel format or direct from financial system

23. FCMAT’s Fiscal Health Risk Analysis Created in 2005 by FCMAT, the Fiscal Health Risk Analysis creates a roadmap for analyzing important trend information Scored results of the analysis reflect the district’s position in the categories of low, moderate, high and extremely high risk

24. FCMAT’s Fiscal Health Risk Analysis Categories Deficit spendingFund balance Reserve for EUEnrollment Interfund borrowingBargaining agreements General fundEncroachment Mgmt info systemsPosition control Budget monitoringRetiree health benefits Leadership/stabilityCharter schools Audit reportFacilities General ledger

25. Other Suggestions? Submit your suggestions for additional Fiscal Health Risk Analysis items to FCMAT by visiting our website at www.fcmat.org and clicking on Online Help Desk Enter fiscal health in the organization field and let us know if some issues not included in the FHA have affected your district’s fiscal health

26. Charter School Oversight Education Code Section 47604.32 requires school agencies that sponsor a charter school to do the following: (a) Identify at least one staff member as a contact person for the charter school (b) Visit each charter school at least annually (c) Ensure that each charter school under its authority complies with all reports required of charter schools by law (d) Monitor the fiscal condition of each charter school under its authority (e) Provide timely notification to the department if any of the following circumstances occur or will occur: (1) A renewal of the charter is granted or denied (2) The charter is revoked (3) The charter school will cease operation for any reason (f) The cost of performing the duties required by this section shall be funded with supervisory oversight fees (Section 47613)

27. Charter School Oversight 47604.32 (c) Ensure that each charter school under its authority complies with all reports required of charter schools Charter school is to provide reports throughout the fiscal year (adopted budget, first interim, second interim, and unaudited actuals), which will be reviewed and verified by the sponsoring agency 47604.32 (d) Monitor the fiscal condition of each charter school under its authority Is it enough to receive periodic reports to ensure that the charter school is fiscally solvent? Minimum information is necessary on a regular basis to meet the oversight responsibilities Enrollment/ADA Income statement Balance sheet Debt schedules

28. Final Thoughts on Charters Meet the statutory requirements Develop a process for meeting the oversight responsibilities monthly Understand that charters are not necessarily exempt from the Government Code, Penal Code, IRS regs, federal government requirements such as NCLB Follow up on fiscal issues early – the result is a sufficient education to students

29. Regional Teams AB 2756 was signed by the Governor on June 21, 2004 and included substantive changes to the financial accountability and oversight process of a school district’s fiscal condition. Provisions of the bill increased the responsibilities of county offices and school districts and created regional teams.

30. Regional Teams Role of the regional team Provide timely, cost-effective expertise to school districts and county offices of education Provide preventative assistance to local agencies at risk of facing long-term fiscal difficulties Regional team services Task specific short-term expertise Financial analysis Staff training

31. Regional Teams Regional team focus School district reviews CBO forum CBO/Superintendent Academy Workshop sessions on topics including FCMAT’s Budget Explorer Categorical programs GASB 43/45 School closures Associated Student Body

32. Regional Teams An external support for school districts A resource for access to expertise A training resource One more tool in the fiscal support toolbox

33. Regional Teams Region I – North Coast Del Norte, Humboldt, Mendocino, Lake and Sonoma Contact – Denise Calvert, Sonoma COE Region IV – Bay Marin, Napa, Solano, Contra Costa, Alameda, San Francisco and San Mateo Contact – Ellen Elster, Contra Costa COE Region IX – Southern Orange, San Diego and Imperial Contact – Lora Duzyk, San Diego COE Region X – RIMS Riverside, Inyo, Mono and San Bernardino Contact – Dr. Gary Thomas, San Bernardino CSS

34. CALIFORNIA ASSOCIATION of SCHOOL BUSINESS OFFICIALS ANNUAL CONFERENCE 2008 Questions and Answers For technical assistance or to download this PowerPoint presentation, visit www.fcmat.org