1. fiduciary duty legal authority malfeasance 2 who is minding the store?
TRANSCRIPT
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Fiduciary Duty
Legal authority Malfeasance
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Who is minding the store?
Fiduciary Duty
Legal authority Malfeasance
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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.”
Fiduciary Duty
Legal Authority Malfeasance
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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.
So, who IS minding the store?
Superintendent CFO/Director of Finance/Assistant Superintendent School Board
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6
BUDGET
Budget
Superintendent’s role School Board role Local governing body role
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Who does what…when?
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ORIGIN OF WORD “Budget”
Used VIDEO on Budget from HOTFORWORDS.com
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”
Superintendent’s Role
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Development of needs-based budget Compensation decisions Date requirements
What LCPS does….
School Board Role
Sometimes direction to Superintendent on priorities Public hearings (formally advertised) Public input (community info) Submission to local governing body
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What LCPS does….
Local Governing Body Role
Fiscal guidance? Appropriation – lump sum or state category? It’s all about relationships….
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What LCPS does….
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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
Standard Budget Reports
Budget reportsTrend dataComparisons with previous yearExplanations of changes – cost of
salariesEnrollment projections Peer comparisons
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FINANCE
Finance
School activity funds Finance committee School operating fund
Where the money goesHow to monitor? Financial reporting
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School Activity Funds
Basic principlesFunds used for purpose collectedProjects shall contribute to educational experienceFunds derived by student body used for student bodyStudents encouraged to participate in management Funds managed with sound business practices
Note no oversight responsibility of PTAs/PTOs/Boosters
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Finance Committee
Contracts/ProcurementVirginia Public Procurement Act (VPPA)Sanctions significantSchool Board policyCompetition thresholds
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Standard Finance Reports
Monthly financial reportsReporting by state category
Quarterly financial reportsExpenditure and revenue summaryExpenditure detail (by Dept, by Sub
object)
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LCPS Monthly Report- State Category ex.
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State Category Original Budget Revised Budget Actual Balance ExpendedOperating Fund
Instruction $540,362,397 $560,301,189 $443,090,286 $117,210,903 79.08%
Admin, Attend & Health $34,590,145 $38,420,337 $34,496,855 $3,923,482 89.79%
Facilities $2,308,489 $4,224,570 $3,059,755 $1,164,815 72.43%
Operation & Maintenance $65,840,169 $64,436,188 $55,227,551 $9,208,636 85.71%
Pupil Transportation $52,466,940 $53,052,165 $39,733,172 $13,318,993 74.89%
Technology $25,277,522 $30,838,772 $22,709,099 $8,129,674 73.64%
Debt Service & Fund Transfers $0 $7,434,609 $7,434,609 $0 100.00%
Fund Subtotal $720,845,662 $758,707,831 $605,751,327 $152,956,504 79.84%
Food Service Fund
Food Services $24,034,272 $24,034,272 $18,318,973 $5,715,299 76.22%
TOTAL $744,879,934 $782,742,103 $624,070,300 $158,671,803 79.73%
LCPS Quarterly Report – Summary ex.
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Expenditures FY11 Budget Expenditures Encumbrances Current Balance % Spent Projection BalanceSalaries $443,907,086 $283,244,196 $0 $160,662,890 64% $149,830,464 $10,832,426Employee Benefits $173,175,217 $122,025,112 $0 $51,150,105 70% $47,980,520 $3,169,585Contractual Services $20,616,004 $13,282,156 $3,440,205 $3,893,643 81% $3,493,643 $400,000Internal Services $11,873,258 $7,269,088 $0 $4,604,170 61% $4,604,170 $0Utilities $16,236,799 $8,340,677 $14,400 $7,881,722 51% $5,261,722 $2,620,000Communication $3,145,404 $1,932,485 $5,476 $1,207,443 62% $1,147,443 $60,000Insurance $1,460,919 $1,230,325 $0 $230,594 84% $230,594 $0Materials, Supplies $26,103,487 $15,871,987 $1,654,404 $8,577,095 67% $8,577,095 $0Training and Mileage $1,820,412 $1,016,703 $30,253 $773,456 58% $583,456 $190,000Continuing Education $548,042 $350,468 $1,385 $196,189 64% $196,189 $0Leases & Rentals $536,484 $371,729 $34,946 $129,809 76% $129,809 $0Ops & Maintenance $8,500 -$24,748 $0 $33,248 -291% $33,248 $0Capital Outlay $1,843,271 $342,180 $69,984 $1,431,107 22% $1,431,107 $0Transfer Out $5,168,683 $5,168,683 $0 $0 N/A $0 $0Total Expenditures $706,443,566 $460,421,041 $5,251,053 $240,771,471 66% $223,499,460 $17,272,011
Revenue FY11 Budget Revenue Received Current Balance % Rec. Projection BalanceCounty $470,818,084 $470,818,084 $0 100% $0 $0State $196,451,138 $140,960,915 $55,490,223 72% $62,490,223 $2,953,903Federal $120,000 $171,602 -$51,602 143% -$51,602 $0Other $5,654,344 $4,607,493 $1,046,851 81% $1,046,851 $0Appropriated Fund Bal. $33,400,000 $33,400,000 $0 100% $0 $0Total Revenue $706,443,566 $649,958,094 $56,485,472 92% $63,485,472 $2,953,903 Projected Change to Fund Balance @ June 30, 2011 $20,225,915
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VSBA Quarterly Report – Detail ex.Column A
Org. Approved
Budget 07-08
Column B Budget Adjust 07-08
Column C Revised Budget 07-08
Column D Expend.
Year-to-Date 07-08
Column E Add. Est.
Expenses to End of Year
Column F Est. Expend.
Based on Date of Report
Column G Difference Orig. Budget and Est.
Exp.
Column H % Diff
Orig. Budget New Est.
Column I Dollar Diff Rev. Budet and New Est.
Expenditure Lines ______________ ___________ ______________ __________ _____________ ___________ ____________ ____________ _________ ___________Instruction
Teacher Salaries $266,303,358 $6,875,890 $273,179,248 $80,812,228 $188,948,433 $269,760,661 $3,457,303 101.30% ($3,418,587)Librarian Salaries $6,971,110 $42,265 $7,013,375 $2,371,251 $4,554,358 $6,925,609 ($45,501) 99.35% ($87,766)Guidance Salaries $10,627,977 $19,863 $10,647,840 $3,441,603 $7,072,989 $10,514,592 ($113,385) 98.93% ($133,248)Psychologists $5,569,744 $79,277 $5,649,021 $1,904,813 $3,673,516 $5,578,329 $8,585 100.15% ($70,692)Asst. Superintendent $289,988 $0 $289,988 $120,828 $169,160 $289,988 $0 100.00% $0Directors $1,012,977 $0 $1,012,977 $422,071 $590,906 $1,012,977 $0 100.00% $0Principal Salaries $8,793,449 $47,745 $8,841,194 $3,621,924 $5,108,631 $8,730,555 ($62,894) 99.28% ($110,639)Asst. Prin. Salaries $11,865,702 $18,717 $11,884,419 $4,615,903 $7,116,165 $11,732,068 ($133,634) 98.87% ($152,351)Coord. Salaries $6,827,001 $68,340 $6,895,341 $2,873,355 $3,935,697 $6,809,052 ($17,949) 99.74% ($86,289)Ins. Asst. Salaries $24,447,863 $229,670 $24,677,533 $5,942,650 $18,413,391 $24,356,041 ($91,822) 99.62% ($321,492)Secretary Salaries $14,564,177 $26,170 $14,590,347 $5,339,507 $9,068,255 $14,407,762 ($156,415) 98.93% ($182,585)Substitute Salaries $13,009,486 ($2,031,927) $10,977,559 $2,740,885 $8,099,300 $10,840,185 ($2,169,301) 83.33% ($137,374)Supplemental Pay $4,430,768 $140,029 $4,570,797 $1,502,291 $3,011,307 $4,513,598 $82,830 101.87% ($57,199)FICA $28,533,667 ($40,562) $28,493,105 $8,451,041 $20,042,064 $28,493,105 ($40,562) 99.86% $0VRS $53,086,372 $64,690 $53,151,062 $17,725,014 $36,588,361 $54,313,375 $1,227,003 102.31% $1,162,313Legal Services $207,064 $0 $207,064 $44,611 $162,453 $207,064 $0 100.00% $0Medical Premiums $48,245,662 $87,664 $48,333,326 $17,718,419 $30,614,907 $48,333,326 $87,664 100.18% $0Life Insurance $3,985,553 $27,677 $4,013,230 $1,077,355 $2,935,875 $4,013,230 $27,677 100.69% $0Other Insurances $1,182,167 $3,786 $1,185,953 $1,144,706 $41,247 $1,185,953 $3,786 100.32% $0Purchased Services $6,002,860 $2,979,239 $8,982,099 $4,711,323 $4,083,308 $8,794,631 $2,791,771 146.51% ($187,468)Tuition $3,006,096 ($52,000) $2,954,096 $1,573,849 $1,318,591 $2,892,440 ($113,656) 96.22% ($61,656)Printing $57,847 $62,904 $120,751 $62,577 $55,654 $118,231 $60,384 204.39% ($2,520)Office Supplies $186,504 $98,244 $284,748 $142,360 $136,622 $278,982 $92,478 149.58% ($5,766)Educational Supplies $26,094,153 $3,208,038 $29,302,191 $16,949,076 $11,759,737 $28,708,813 $2,614,660 110.02% ($593,378)Media Supplies $636,534 $127,784 $764,318 $526,820 $222,020 $748,840 $112,306 117.64% ($15,478)Textbooks $4,945,916 $499,645 $5,445,561 $3,682,417 $1,652,870 $5,335,287 $389,371 107.87% ($110,274)Equipment $2,284,935 ($374,898) $1,910,037 $1,590,858 $256,380 $1,847,238 ($437,697) 80.84% ($62,799)
______________ ___________ ______________ __________ _____________ ___________ ____________ ____________ Sub-Total $553,168,930 $12,208,250 $565,377,180 $191,109,735 $369,632,197 $560,741,932 $7,573,002 101.37% ($4,635,248)
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EXPENDITURES
LCPS School Operating Fund Where the money goes
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All other costs 12%
Salaries & benefits 88%
Fund Balance/Surplus/Savings
Coming soon to a Local Governing Body meeting Important issue facing School Boards across the
Commonwealth Why it happens and why it matters
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Why it happens and why it matters
What is lapse and turnover? Fluctuations of budget to actual Position lapse and turnover CAUTION, CAUTION Only flexibility the division has…
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How To Address It
Budget a large negative number Make assumptions for vacant / new positions Other variables Predicting human behavior
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Surpluses Come From Savings
Surpluses are not a surprise All school division’s budgets should have unspent
funds School divisions cannot exceed their
appropriations
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Source: FY 2010 Comprehensive Annual Financial Reports
All school divisions have unspent funds at the end of the year.
Division PercentageAlexandria 6.5%Arlington 6.8%Fairfax 6.5%Falls Church 6.6%Loudoun 5.7%Manassas 7.1%Prince William 6.4%
Unspent Funds
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REVENUE
LCPS - Where the money comes fromFY 2012 Amount ($ in millions) Carryover $10.0 Local/County funding $494.0 State revenue $221.6 Federal funds $13.2 Other Funds $7.2Total $746.0
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Local/County 66.2%
State 29.7%
Local/County Funding
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Source: FY 2012 WABE Guide
Tax Rate
$1.285 per $100 of assessed valueValue of 1¢
$7.5 million
State Funding & the Local Composite Index
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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.
Adjusted ADM (K-12)
61,893State per pupil amount
$5,448Total
$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 statewide
1,511,87708 Triennial census LCPS
71,489LCPS Percentage
4.7285%
Sales tax statewide
$95.9 billion
Education share 1.125%
$1.1 billion
LCPS percentage
4.7285%
Sales tax funding
$51 million
Sales Tax Calculation
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OTHER STUFF
Other Stuff You Should Know
Misinformation Simplify, simplify, simplify Strategies to cut spending
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Misinformation
Used VIDEO from SNL “Violins on Television” from HULU.com
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
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Simplify, Simplify, Simplify
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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
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
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Reduce employer share of healthcare
Defer equipment replacement plans
Mid-year salary enhancements
Increase fees Selective elimination of
programs
Random thoughts about work…
….and life in general
The nice thing about teamwork is you always have others on your side.
Margaret CartyAmerican Author
I can’t remember the last time I wasn’t at least kind of tired.
Author Unknown
Can we all just agree to ignore whatever comes after Blue Ray? I don't want to have to restart my collection...again.
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Snowflakes are one of nature’s most fragile things, but just look what they can do
when they stick together.
Author Unknown
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
A positive attitude may not solve every problem, but it makes solving any problem
a more pleasant experience.
Grant FairleyMotivational Speaker
Obituaries would be a lot more interesting if they told you how the
person died.
Author Unknown
Delegating work works, provided the one delegating works too.
Robert HalfFounder of Staffing Firm
The trouble with doing nothing is you never know when you’re done.
Author Unknown
It is amazing how much you can accomplish when it doesn't matter who
gets the credit.
Harry S. Truman33rd President, United States
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
It is hard to lead a cavalry charge if you think you look funny on a horse.
Adlai StevensonFormer Vice President & Congressman
No one can whistle a symphony, it takes a whole orchestra to play it.
Halford E. LuccockAmerican Methodist Minister
I totally take back all those times I didn't want to nap when I was younger.
Author Unknown
Men have never been individually self-sufficient.
Reinhold NiebuhrAmerican Theologian
I think part of a best friend's job should be to immediately clear your computer
history if you die.
Author Unknown
I keep some people’s phone numbers in my phone just so I know not to answer
when they call.
Author Unknown
Nothing sucks more than that moment during an argument when you realize
you're wrong.
Author Unknown
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
What separates those who achieve from those who do not is in direct proportion
to one’s ability to ask for help.
Donald KeoughFormer Coca Cola President
You moon the wrong person at an office party, and suddenly you aren’t
“professional” anymore.
Author Unknown
Teamwork is the fuel that allows common people to attain uncommon results.
Andrew CarnegieEntrepreneur & Philanthropist
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
The best way to appreciate your job is to imagine yourself without one.
Oscar WildeIrish Writer/Poet
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
A pat on the back is only a few vertebrae removed from a kick in the pants, but is miles ahead in results.
Ella WilcoxAmerican Author/Poet
I hate leaving my house confident and looking good and then not seeing
anyone of importance the entire day. What a waste.
Author Unknown
The only place where success comes before work is in the dictionary.
Donald M. KendallFormer CEO Pepsico
There is a great need for a sarcasm font.
Author Unknown
Working together works.
Author Unknown
Bad decisions make good stories.
Author Unknown
Simply stated, it is less me and more we.
Author Unknown
I think the freezer deserves a light as well.
Author Unknown
None of us is as smart as all of us.
Ken BlanchardAmerican Author & Management Expert
We are all in this together….
