1 seminar on school finance – financial projections presented by iasbo principles of school...

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Seminar on School Finance – Financial Projections

Presented byIASBO Principles of School Finance Committee

Presented February 7, 2007

Seminar on School Finance – Financial Projections 2

Steve Miller CPA Senior Financial Advisor

PMA Financial Network, Inc.

(630) 393-9494 x6413

[email protected] Ric King CPA

Controller

Schaumburg Elementary District 54

(847) 357-5039

[email protected]

Presenters


Elements of a Financial ForecastPast – Present – Future Historical Data

Audited Revenue and Expenditures (AFRs) Enrollment EAV & New Property Growth, Tax Rates, Collection % Other Trends – Fund Balances, capital spending, etc.

Current Budget Enrollment Staffing Levels EAV & New Property, Tax Rates Economic Indicators


Elements of a Financial ForecastPast – Present – Future Future

Assumptions Trends

EAV & New Property Growth Enrollment

Consumer Price Index State Funding

Foundation Level (State Funding Per Pupil) Categoricals (Other State Funds)

Salary Agreements Employee Benefit Costs Capital Outlay / Life Safety Survey (Building Needs)


How do you Forecast Accurately? Focus on the key variables Break it down into logical pieces by focusing on

the big numbers – both on the revenue and expense sides.

Use the most reliable sources for data Be conservative


Revenue by SourceState-wide Average

Property Taxes57%Other Local

5%

General State Aid18%

Other State12%

Federal8%


Revenue by SourceSuburban DuPage County Elementary District

Property Taxes88%

General State Aid2%

Other Local6%

Other State3%

Federal1%


Revenue by SourceSuburban Cook County Elementary District

Federal10%

Other State24%

General State Aid42%

Other Local3%

Property Taxes21%


Revenue ProjectionsProperty Taxes

Tax Capped – Key Variables: Prior Year Extension EAV New Property EAV CPI Levy Strategy

Not Tax Capped – Key Variables: EAV Maximum Tax Rates


Revenue ProjectionsGeneral State Aid

Prior Year Claims:http://webprod1.isbe.net/gsainquiry/asp/default.asp

Key Variables EAV Tax Rates Average Daily Attendance (ADA) Foundation Level Poverty Count


Revenue ProjectionsOther State Aid

Know your trends in the factors that impact categorical reimbursements: Special Ed enrollment (Extraordinary, Private-

Facility) Special Ed staffing (Personnel) Bilingual enrollment (TPI, TBE) Transportation expenditures (Transportation)

Estimated State proration levels


Expenditures by ObjectTypical District

Purchased Services10%

Supplies & Materials

4%

Capital Outlay4%

Other Objects0%

Tuition5%

Employee Benefits11%

Salaries66%


Expenditure ProjectionsPersonnel Costs

Focus on the biggest pieces Break salaries into bargaining units Factor-in future salaries that are known from

current, multi-year contracts Build scattergrams to project teachers and other

groups with Lane/Step salary schedules Add/reduce staff as enrollment changes Incorporate retirement costs/savings if significant

Be as proactive as possible with benefit programs to control costs


Expenditure ProjectionsNon-Personnel Costs

Contractual Services – Analyze big pieces: Food Service contract Custodial contract Transportation contract SPED professionals – Psych, Social Work, Speech Therapy

Supplies – Usually a small piece Look at utility trends

Capital Outlay Utilize multi-year technology replacement plans Incorporate future facility needs

Tuition – Project on the high side


PMA Financial Network, Inc.Financial Planning Program

Does your school district need a five-year financial plan? Is an Educational Tax referendum being considered? Are you unsure of the impact of teacher contract

negotiations on your future financial health? Would you like to forecast and analyze your school

district’s financial future? Do you need to respond to a State Board of Education

request because of a Financial Profile score or Deficit Reduction Plan?

Would a third party analysis improve community/faculty relations?


PMA Financial Network, Inc.Financial Planning Program The Financial Planning Program’s goal is to

provide an interactive planning tool for superintendents, business managers and boards of education by which governance decisions can be made by developing sound financial forecasting practices in these uncertain financial times.


Thank You!

Questions?

For more information regarding PMA’s Financial Planning Program, please visit our website:http://www.pmanetwork.com/services.htm

1 seminar on school finance – financial projections presented by iasbo principles of school...

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