ASBO & GFOA Budget Presentation

andCAFR Requirements

2007

TASBO 61st Annual Conference

Welcome

Jon Graswich, CPA Chief Financial Officer

DeAnne Hatfield Business Services Director

Northwest Independent School District

jgraswich@nisdtx.org (817) 215-0025

dhatfield@nisdtx.org (817) 215-0041

www.nisdtx.org

Agenda

Introduction

Budget Presentation

Comprehensive Annual Financial Report

Summary

Questions and Answers

The Financial Cycle

The Financial Cycle starts with strategic planning and

ends with the audited financial statements.

The Financial Cycle

The seven steps of the Northwest ISD Financial Cycle are:• Strategic Plan / Five-Year Forecast Fall-January• Budget Preparation February - March• Board Budget Review April - May• Budget Adoption June• Tax Rate Adoption July - August• Financial & Investment Reporting July - June• Audited Financial Statements November

Association of School Business Officials

International Meritorious Budget Award

Meritorious Budget Award

The Meritorious Budget Awards Program (MBA) uses examples of the latest techniques from school business

administrators to build your skills for developing, analyzing, and presenting your

school system budget.

2005-2006 Texas Recipients

Alief Houston

Allen Klein

Carrollton-Farmers Branch Laredo

Conroe Lewisville

Dallas Northwest

Fort Bend Rockwall

Government Finance Officer’s Association

Distinguished Budget Presentation Award

Distinguished Budget Presentation Award

The Budget Awards Program is designed to encourage governments to prepare budget

documents of the highest quality to meet the needs of decision-makers and citizens.

2005-2006 Texas Recipients

Alief Fort Bend

Austin Houston

Big Spring Laredo

Carrollton-Farmers Branch Lewisville

Conroe North East

Corpus Christi Northwest

Dallas United

What The Budget Document Is

The budget document is a policy document, an operations guide, a

financial plan, and a communications medium designed to meet the needs of decision-makers and citizens.

What The Budget DocumentAin’t

It is not a “magic” bullet.

What The Budget DocumentAin’t

It will not cause money to rain from the heavens.

The “Magic” Bullet is

the Strategic Plan

The Northwest Independent School District approach to coping with the combination of fast student growth in a restricted funding environment with increasing academic standards has been to ensure that the budget process is driven by the Strategic Plan. The Board of Trustees and Administration review the Strategic Plan. The Administration performs a detailed review of all revenues and expenditures. The focus is on aligning the allocation of resources, both personnel and financial, with the accomplishment of the goals and objectives which are directly linked to the plan as described in the budget document.

ASBO & GFOACriteria Checklist

Applicants rate their budget against the criteria using the checklist

and identify any adjustments that can be incorporated into the final document. To receive these awards, a school entity must publish a budget document as a policy document, an operations guide, a financial plan, and a communications medium.

ASBO International’s Meritorious Budget Award

Criteria Checklist

General Requirements

Introductory Section

Organizational Section

Financial Section

Informational Section

Government Finance Officer’s Association

Distinguished Budget Presentation Award

Criteria Guide

Policy Document

Financial Plan

Operations Guide

Communication Device

ASBO Criteria ChecklistGeneral Requirements

The General Requirements relate to the overall budget document but do not necessarily apply to a specific section of a document. They set criteria concerning the document cover page, the sectional division and table of contents, page numbering information not included in the budget document, response to previous review team comments, use of graphs and charts, and the technical preparation of the document.

ASBO Criteria Checklist Introductory Section

Introduces the reader to the document as a whole.

It highlights important information contained

in the budget. Users rely on this section to get

an overview. They want a quick overview –

a snapshot of what

they can expect

to find in the rest

of the document.

ASBO Criteria Checklist Introductory Section

1. A liftable executive summary

2. A copy of the MBA certificate (if awarded in the preceding year)

3. A listing of school board members and top level administrative personnel

Organizational Section

Provides the context and framework within which the budget is developed and managed. The context for the budget is substantially predicated on the type and level of service to be provided to the students

of the community. The framework

also includes the District's

organizational and financial structure

as well as the controls that

direct and regulate the development

and administration of the budget.

1. Explanation of the school entity2. Significant budget and financial policies3. Organizational Chart4. Statement of the mission5. Major goals and objectives6. The operating and capital budget development process7. The budget administration and management process

Criteria ChecklistOrganizational Section

Financial Section

The heart of the school budget document.

The budget financial schedules

present the adopted budgets

for the District compared

with the results

of past budget plans

and with future projections.

1. Scope and format of budget presentations (i.e., schedules02. Use of the pyramid approach in the presentation of budgets3. Complete information presented including fund balances,

revenues, expenditures and other funding sources/uses4. Inclusion of capital budgets and a list of major capital

projects5. Description of capital spending impacts on the operating

budget6. Current debt, legal debt limits and effects on current/future

budgets

Criteria ChecklistFinancial Section

School & ProgramsSection

Provides the Mission Statements carried out by the school or program, objective methods of results by school or program, and includes the resources, both personnel and dollars, allocated to the school or program to carry out the stated mission.

School & ProgramsSection

1. ASBO - Optional.

2. GFOA - Required:• Display by Organizational Units or Programs.• Describe activities, services or functions carried out.• Provide objective methods to measure progress toward

accomplishing the government’s mission as well as specific unit program goals and objectives.

Informational Section

Contains information on past and future budgets and factors influencing the proposed budget. Puts the adopted budget into context and it explains past budget decisions.

1. Revenue Sources, Assumptions and Trends2. Values of Taxable Properties3. Property Tax rates and Collections4. Analysis of Tax Burden5. Comparison of Revenues and Expenditures6. Budget Forecasts

Criteria ChecklistInformational Section

7. Student Enrollment History and Forecasts8. Personnel Resource Allocations9. Bond Amortization Schedules10. Performance Measurements11. Other Useful Information12. A Glossary of Terms

Criteria ChecklistInformational Section

ASBOApplication Materials

(1) Application Form (4) Transmittal Letter (4) Budget Document (4) Criteria Location Checklist (4) Responses to Last Year’s

Comments (if applicable) (-) Fee ($350 - $900)

ASBOApplication Deadline

Submitted within 90 days of FINAL legal adoption date.

Adoption processes may include several dates.• Budget Adoption in June.• Tax Rate Adoption in August.

WWW.ASBOINTL.ORG

GFOAApplication Materials

(5) Application Form (4) Transmittal Letter (4) Budget Document (5) Criteria Location Guide (5) Responses to Last Year’s

Comments (If applicable) (-) Fees ($165 - $630)

GFOAApplication Deadline

Two options:• Proposed budget

• Within 90 days of submission to governing body.• Adopted budget

• Within 90 days of adoption.

WWW.GFOA.ORG

What is a CAFR?

The Comprehensive Annual Financial Report (CAFR) is a report that tells the financial story of the school system through narrative, financial statements, and chart/graphs. The CAFR not only gives the summary and detailed information for the school year being reported, but also includes information for the previous ten years.

ASBO International’s Certificate of Excellence

in

Financial Reporting

Certificate of Excellence in

Financial Reporting

The Certificate of Excellence in Financial Reporting (COE) Program reviews the accounting practices and reporting procedures used by school districts in their Comprehensive Annual Financial Reports

(CAFR), and enhances the award winners' credibility among stakeholders.

2005 Texas Recipients

Independent School Districts 35

Educational Service Centers 2

Government Finance Officer’s Association

Certificate of Achievement for

Excellence in Financial Reporting

Certificate of Achievement for Excellence in Financial Reporting

The Certificate Program, which was established in 1945, is designed to recognize

and encourage excellence in financial reporting by state and local governments.

2005 Results Texas Recipients

Independent School Districts 50

Educational Service Centers 1

What is the mission of ASBO’s COE Program?

To encourage and recognize excellence in the preparation and issuance of school system’s Comprehensive Annual Financial Reports.

What is the application deadline?

School systems must submit their application to ASBO no later than six months after a school system’s fiscal year end. For example,

Fiscal Year End Application Deadline

June 30 December 31

August 31 February 28

What is the fee to participate in the program?

The application fee is based on the school system’s total revenue, all funds. All school systems (regardless of ASBO International membership) may apply. Below is the fee information:

Total Revenue, All Funds ASBO Member

Under $1 Million $350

$1 to $5 Million $450

$5 to $10 Million $550

$10 to $25 Million $700

$25 to $50 Million $800

$50 to $100 Million $900

$100 to $250 Million $1,000

How long does the review process take?

The process takes approximately 4-5 months. As part of each review, reviewer comments are provided back to the submitting school district to be used in preparation of subsequent CAFR’s.

What needs to be submitted to be considered for the

program? The application materials include:

• One copy of the completed application form

• Three copies of the CAFR

• Three copies of the school system’s responses to last year’s comments (if applicable)

• Three copies of the Self-Evaluation Worksheet (Self-Evaluation worksheets are required for first time participants or if a school system did not apply to the program for the previous year.)

• Application Fee

What are the benefits/features of the program?

• All applicants receive constructive comments about their CAFR from trained accounting professionals.

Those who receive the award also receive:

• A prestigious award plaque

• A printed award certificate to be used in the school system’s next CAFR

• Professional recognition in ASBO’s and ASBO affiliate publications

• Media recognition

• Strengthened budget planning and forecasting

What are the benefits/features of the program?

The Certificate of Excellence in Financial Reporting Award is recognized by:

Bond Rating Agencies

Securities Analysts

Underwriters

Educational, teacher, and citizen groups

Accounting Professionals

Self-Evaluation Worksheet

The guidelines of the program, contained in the Self-Evaluation Worksheet provide a resource for school business officials and auditors to use when preparing a CAFR.

Submitting the self-evaluation worksheet is optional for school systems that received the award for the prior fiscal year. New applicants, past conditional awards, and past denials are required to complete and submit three copies of the worksheet.

I have a technical question. Can ASBO help me?

Yes, please contact Michelle Williams at 703/ 708-7067 or email her at

williamsMD@asbointl.org

and she will put you in touch with the Certificate of Excellence in Financial Reporting Technical Consultant, Gary Heinfeld of Heinfeld & Meech Co., P.C.

My state doesn't require a CAFR. Can I still participate?

Yes. In order to participate in the COE program, you will need to convert your state's required financial reporting format into the CAFR format. Please contact Michelle Williams at (703) 708-7067 for more information.

Why Should My School System Participate?

Credibility: Participation validates a school system’s commitment to fiscal and financial integrity and enhances its credibility with the school board and community.Confidence: Receiving the Certificate of Excellence Award gives the superintendent and school board confidence about their school system and the business management staff.Savings: A CAFR complies with disclosure requirements by providing ninety percent of what is needed for credit evaluation.

SUMMARY

Implementation

Board works with the Administration to develop goal / objective guiding the development of the budget document avoiding specific content.

• Goal: Northwest ISD will invest resources to ensure that students,

parents, and the community receive optimal educational services.• Objective: The information in the budget document and CAFR will

meet the requirements of ASBO and GFOA.

Receiving the Award

Receiving the Award

Awards are granted for only one year.

Notification and confidential comments.

A personalized award plaque and certificate.

Strongly recommend official Board presentation.

Local Media news release

Questions and Answers

Workshop Concluded