hearne isd management review march 7,...

HEARNE ISD Management Review

March 7, 2016

Texas Association of School Business Officials – Hearne ISD – Page 1

Table of Contents

Table of Contents ................................................................................................................ 1

Management Review Team Members ................................................................................ 3

Transmittal Letter................................................................................................................ 5

Scope ............................................................................................................................... 6

Tasks Accomplished ........................................................................................................ 7

Commendations ............................................................................................................... 7

Key Findings and Recommendations .............................................................................. 8

Other Observations ........................................................................................................ 10

Summary ........................................................................................................................ 10

Hearne ISD........................................................................................................................ 11

Student, Staff and Financial Data .................................................................................. 14

Table 1A. District Student Enrollment 2011-2012 through 2015-2016 .............. 14

Table 1B. Student Enrollment by Campus, 2011-2012 through 2015-2016 ....... 15

Table 1C. Student Ethnicity Enrollment, 2015-2016 .......................................... 15

Table 1D. District Student Special Populations 2011-2012 to 2015-2016 .......... 16

Staff Data.................................................................................................................... 16

Table 2A. Staff Fulltime Equivalents (FTEs) 2011-2012 through 2015-2016 .... 17

Chart 2A. Staff FTEs - 2011-2012 through 2015-2016....................................... 17

Chart 2B. Total Staff & Teacher FTEs - 2011-2012 through 2015-2016 ........... 18

Chart 2C. Other Staff FTEs by Type - 2011-2012 through 2015-2016 .............. 18

Table 2B. Comparison of Changes in Staff FTEs and Students, ......................... 19

2011-2012 through 2015-2016 ............................................................................ 19

Table 2C. Staff Fulltime Equivalents (FTEs) 2014-2015 .................................... 20

Table 2D. Students to Teacher Ratios, 2011-2012 through 2015-2016 .............. 20

Table 2E. Students to Teacher Ratios, 2014-2015 .............................................. 21

Table 2F. Students to Total Staff Ratios, 2014-2015 .......................................... 21

Average Staff Salaries ................................................................................................ 22

Table 2G. Hearne ISD Average Base Salaries by Category ................................ 22

Graph 2D. Hearne ISD Average Base Salaries by Category ............................... 22

Table 2H. Peer District Average Salaries 2014-2015.......................................... 23

Graph 2E. Hearne ISD Average Base Salaries by Category ............................... 23

Table 2I. Peer District Turnover Rate and Average Experience for Teachers .... 24

2014-2015 ............................................................................................................ 24

Financial Data ............................................................................................................ 25

Table 3A. Final Property Value Study – 2010 through 2014 .............................. 25

Table 3B. Ending Fund Balance – FY 2012 through FY 2015 ........................... 26

Chart 3A. Revenue Sources – General Fund – FY 2014-2015 ........................... 27

Chart 3B. Revenue Sources – All Funds – FY 2014-2015 .................................. 27

Per Pupil Expenditures ............................................................................................... 28


Table 3C. Peer District Operating Expenditures 2013-2014 ............................... 28

Chart 3C. Peer District Per Pupil Expenditures ................................................... 28

ACCOUNTING & FINANCE .......................................................................................... 29

[Including Purchasing and Payroll] .................................................................................. 29

Overview .................................................................................................................... 30

Overall Commendations ............................................................................................. 32

Findings and Recommendations ................................................................................ 32

Exhibits .......................................................................................................................... 54


Management Review Team Members


Management Review Team Members

Project Director

Becky Estrada TASBO Life Member

Business Manager Lackland ISD 2460 Kenly

San Antonio, Texas 78236-5650 [email protected]


Transmittal Letter


March 7, 2016 Mr. Raul Nuques Superintendent Hearne ISD 900 Wheelock Hearne, TX 77859 Dear Mr. Nuques: At your request a management team was organized through the Texas Association of School Business Officials (TASBO) for the purpose of assessing the business operations and the staffing levels of Hearne Independent School District (District) and providing recommendations in staffing and/or changes in organizational structure in order to maintain an efficient and effective organization. The visiting consultant included selected personnel with extensive experience in school districts. The criteria utilized for selecting the consultant included their expertise and professional reputation in the requested areas. TASBO has completed completed our on-site review of the areas named above. This letter states the objectives of the evaluation, the tasks that were accomplished, summarizes our findings, and provides the recommendations we believe are appropriate for your consideration. A more detailed report provided by the evaluators is included in a separate section of this report.

Scope

The objective of this evaluation was to provide the Board of Trustees and Superintendent with an objective analysis of the business operations and to make recommendations in staffing and/or changes in organizational structure in order to maintain an efficient and effective organization.


Tasks Accomplished

After collecting data from the District’s central administration, selected departments and campuses, the following tasks were accomplished by the team members in order to achieve the objectives of the evaluation.

Reviewed historical and current financial, operational, student, and staff data;

Studied relevant written material pertaining to the District, such as: policies, procedures, forms, organizational structure, staffing levels, salary administration, and hiring practices;

Reviewed departmental processes and guidelines, to include processes for campus/student activity funds;

Reviewed the budget development and monitoring processes;

Reviewed the purchasing procedures and guidelines, including an analysis of expenditures;

Reviewed the cash flow projections for the 2015-2016 fiscal year;

Reviewed internal controls over processes and procedures;

Studied the economy and efficiency of the organizational structure, including staff roles and responsibilities and the use of automation;

Reviewed the adherence to federal and state laws, including payroll and personnel regulations;

Reviewed the adherence to District reporting requirements, including federal and state reports;

Interviewed selected personnel in the District;

Reviewed job descriptions;

Reviewed and compared Hearne ISD staffing levels to peer districts, Region 6 Education Service Center, statewide averages and industry standards; and

Reviewed other related information obtained as part of the review process.

Commendations

Staff members were courteous, accommodating and helpful to the review team.

The District has taken the initiative to conduct this TASBO Management Review

to identify potential areas of improvement in business operations.

The District obtained assistance in estimating state revenue using the Summary of

Finance template from the Education Service Center, Region 6.

The District appears to have implemented effective hiring procedures. The

District should create written hiring procedures to ensure consistency in practices.

The District has established a centralized accounting system for all activity

accounts. The campus and student activity accounts are managed through the

TxEIS business system.


The District implemented an on-line application system, School Recruiter. This

system provides an excellent tool for campus principals and department heads to

conduct applicant screening.

Some of the business office staff members have several years of experience and

are well trained in their respective area(s) of responsibility.

Key Findings and Recommendations

Finding. The Business Manager failed to monitor the 2014-2015 adopted budgets throughout the fiscal year to ensure compliance with state law and local policy as it relates to amending the official budget before exceeding a functional expenditure category. This is a failure in financial management and in violation of state law (TEC 44.006) and School Board Policy CE Local. Recommendation. The Business Manager must monitor and report [to the School Board and other stakeholders] all adopted budgets on a monthly basis to ensure compliance with state law in all aspects, to include amending the official budget before exceeding a functional expenditure category.

Finding The District is not in compliance with all aspects of state law [Public Funds Investment Act (PFIA)] nor School Board Policies CDA Legal and Local as they relate to the investment of District funds. The PFIA requires quarterly investment reports, approval of Investment Brokers, approval of Investment Sources and an Annual Review of Investment Strategies and Board Policies. None of these requirements have been presented to the School Board for review and/or approval for at least the past two (2) years. Recommendation. The Investment Officer [Business Manager] should develop and implement written procedures related to compliance with the Public Funds Investment Act (PFIA) to include policy revisions, broker certifications, diversification of funds and other investment management responsibilities.

Finding. The District’s most recent Financial Annual Report (AFR) for the period ending August 31, 2015 contains a significant deficiency related to internal controls over financial reporting. Recommendation. The Business Manager has overall responsibility for Annual Financial Report and as such should take a leadership role in addressing all of the findings as noted above.

Finding. The District’s bank account reconciliations and other balance sheet reconciliations are not being completed on a timely. Additionally, bank account reconciliations are not being performed using the automated TxEIS Bank Reconciliation system.


Recommendation. The District should immediately reconcile all bank accounts to determine if there is any fraud or misuse of District funds. In addition, the District should obtain an independent review (Agreed Upon Procedures or Forensic Audit) of the District’s bank accounts to verify the accuracy of the financial statements.

Finding. The Finance department has not implemented adequate internal controls over financial transactions. There are four (4) Finance department staff members – an adequate number of staff to establish adequate internal controls in cash management, general ledger maintenance, bank reconciliations, and other finance transactions. Recommendation. The Business Manager should develop written internal control procedures that ensure adequate separation of duties in all financial transactions. The internal controls should be approved by the Superintendent and implemented as soon as possible.

Finding. The District staff is not utilizing the full potential of the TxEIS Human Resources, Finance, Payroll and related modules. In addition, other existing software programs to manage timekeeping and substitute reporting are not being fully utilized and/or interfaced to the TxEIS business system. Recommendation. The District should compile a list of training needs for all staff and prepare training plans, as appropriate. The software vendor for the TxEIS business system (Education Service Center 6 (ESC 6) should be contacted to provide targeted training to meet the needs identified on the training plans.

Finding. The District developed a Procedures Manual for Internal Controls in April 2009. However, the Business Manager was unaware that the manual existed until she located it during the on-site visit. As a result, the business department has been operating without a business procedures manual. The lack of procedural manuals is directly related to some of the non-compliance issues identified in this report. Recommendation. The Business Manager should develop and implement a business procedures manual to promote overall effectiveness and deter waste, fraud or abuse. Training should be conducted for all stakeholders as time allows during the fiscal year, but at a minimum, all of the current manuals should be posted on the District webpage or Intranet for easy access by campus and departmental staff responsible for managing district business functions.


Other Observations

The overall lack of procedures and internal controls in many of the District’s business operations reviewed may create vulnerability for fraud, theft and/or lack

of staff efficiency all of which would constitute misuse of District funds.

Summary

As demonstrated in this report, the District has opportunities for improvement in several business areas. The District should carefully evaluate the findings and recommendations in this report to create an Action Plan to address the findings. The compliance issues such as violations of state law and local Board policy should be the primary focus of the Action Plan, followed by the findings that should result in greater operational effectiveness and efficiency. The District is clearly interested in improving operations and becoming more efficient in procedures and compliance. When implemented, the recommendations in this report will definitely improve the future financial health of Hearne ISD. We appreciated the opportunity to work with the District on this project. Sincerely,

Tracy Ginsburg, Ed.D., RTSBA Executive Director


Hearne ISD Management Review


Overview Hearne ISD has experienced several factors in recent years prompting the administration to request an external review of its procedures and operational efficiency. Internal Factors: The District’s student enrollment decreased over the past five (5) years. Consequently, the state revenue has decreased as a result of the reduction in student enrollment. The total staff FTEs decreased over the past five (5) years by a lesser percentage than the percentage decrease in student enrollment. According to the 2014-2015 District’s PEIMS Staff Data, the District experienced a teacher turnover rate of 59.3 which is substantially higher than the state average of 16.6. The District has also experienced some financial management issues during the past fiscal year. Each of the contributing factors is listed below:

District Annual Financial Audit for the period ending August 31, 2015 o Lack of budgetary controls – exceeded three (3) functional areas in the

General Fund budget in the aggregate amount of $50,053. Exceeding a functional area without obtaining Board approval to increase the adopted budget is a violation of state law, state rules and Board policy.

The District had a similar deficiency in the 2013-2014 Annual Financial Audit. The District overspent two (2) functions by approximately $10,117 during the 2013-2014 fiscal year.

o A significant deficiency related to internal controls over financial reporting related to untimely bank reconciliations.

External Factors: The District experienced a decrease in the total assessed valuation in 2014. The decrease may have a short and long term impact on the availability of revenues for District operations and debt obligations. Data tables and charts are included in this report in the Student, Staff and Financial Data section (“Data section”). The Data section includes the most current Public Education Information Management System (PEIMS), Texas Academic Performance Report (TAPR), Academic Excellence Indicator System (AEIS) data, and district-provided information available to the team members. The TASBO Forecast5 Analytics system, which consists of information downloaded from the PEIMS system and other databases, was also utilized to create tables and charts. The focus of this study is to assess the business operations of the District. By reviewing these functions, a better understanding can be made with regard to the effectiveness of the functions and the level of support provided to campuses and departments.


Background Information Hearne ISD is comprised of three (3) campuses: one (1) elementary campus, one (1) junior high school, and one (1) high school. As reported on the 2015-2016 PEIMS report, the District’s total student enrollment was 899.

Campus Configuration

Campus Campus # Grade Levels

Hearne High School 002 9-12

Hearne Middle 042 7-8

Hearne Elementary 104 EE-6

We selected three (3) school districts based on the similarity of the peer districts to the District in several categories of data such as student demographics. Comparable data from these districts, Region 6 Education Service Center and the state are used throughout this report. The similar districts included in this report are:

Corrigan-Camden ISD

Daingerfield-Lone Star ISD

Onalaska ISD


Hearne ISD Student, Staff and Financial Data

Student Data

In school year 2015-2016, Hearne ISD’s student enrollment decreased by 34 students from school year 2014-2015. The net change in enrollment over the last five (5) years is an overall decrease of 67 students. Even though the student enrollment decreased by approximately 7% over the past five (5) years, the total staff decreased by approximately 2%, or from 171.8 FTEs in 2011-2012 to 169.1 FTEs in 2015-2016.

Table 1A. District Student Enrollment 2011-2012 through 2015-2016

Source: PEIMS Fall Staff Data

Chart 1A. District Student Enrollment 2011-2012 through 2015-2016

Table 1B reflects the campus enrollment for each campus from 2011-2012 through 2015-2016. The total student enrollment decreased by 67 students over this five-year period. During the 2014-2015 school year, the grade span at the Junior High changed from a 7th to 8th grade span to a 6th to 8th grade span, resulting in an increase of 75 students. The following year, 2015-2016, the grade span returned to 7th to 8th grade, or an overall decrease of 82 students.

2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Student enrollment 966 981 932 933 899

Change 15 -49 1 -34

Total increase or

decrease since 11-12 -67

850

900

950

1,000

2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Student Enrollment

Student enrollment


Table 1B. Student Enrollment by Campus, 2011-2012 through 2015-2016


Student Demographics

Hearne ISD has a diverse student population. The majority of students in the district are categorized by the Texas Education Agency as African American or Hispanic. This student majority-minority demographic makeup provides several instructional challenges and opportunities for the staff at Hearne ISD.

Table 1C. Student Ethnicity Enrollment, 2015-2016


In 2015-2016, the District’s students are 95.4% economically disadvantaged and 36.5% at-risk. Over the past five (5) years, the District’s special education population ranged from a high of 14.7 to a low of 12.4% and is currently at 13.5%. The Bilingual/ESL student population has increased over the past five (5) years to 14.7%. The District’s career and technical education population is comprised of 25.7% of the student population. It is important to note that the percentage of at-risk students decreased from 59.9% in 2011-2012 to 36.5% in 2015-2016 even though all District campuses were assigned an Improvement Required Accountability Rating in 2014-2015.

Campus 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

High School (002) 282 261 233 243 247

Junior High (042)* 115 137 134 209 127

Elementary (104)569 583 565 481 525

Totals 966 981 932 933 899

*Note. During the 2014-2015, the JH changed to a grade span of 7th - 8th grade and returned to

a 6th to 8th grade span in 2015-2016.

Group Number Percentage

All Students 899 100.00%

White 91 10.12%

Hispanic 379 42.16%

African American 417 46.38%

Asian 0 0.00%

American Indian or Alaska Native 2 0.22%

Native Hawaiian/Pacific Islander 0 0.00%

Two or More Races 10 1.11%


The District’s special populations differ from the state and Region 6 averages. In Table 1D, the 2014-2015 economically disadvantaged percentage in the District is 36.6% higher than the state and 45.5% higher than the Region 6 average. The At-Risk population in the District is less than both the state and Region 6 averages.

Table 1D. District Student Special Populations 2011-2012 to 2015-2016


Staff Data

Staffing data is measured as full time equivalents (FTEs). Unless otherwise noted, FTEs in this report will include all employees regardless of funding source. TEA categorizes employees as teachers, professional support, campus administration, central administration, educational aides, and auxiliary staff. Staff can be evaluated by percentages of FTEs in each category, by student to staff ratios and by comparisons to peer districts, regional and state averages. There is a strong correlation between certain public education staff and enrollment. The strongest correlation occurs between teachers and students. To a lesser degree, other employee categories can also be correlated to the number of students as well. Some employee categories correlate better to other measurements such as the total building square footage, number of meals served per hour, or the number of campuses in a district. Table 2A illustrates the total staff FTEs and FTEs in each PEIMS category from 2011-2012 through 2015-2016. The total staff decreased by 2.7 FTEs over the five (5) year period. The decrease in student enrollment during this same five (5) year period was approximately 7%, yet the decrease in staff FTEs was approximately 2%.

ESC 6 StateSpecial

Populations

2011-

2012

2012-

2013

2013-

2014

2014-

2015

2015-

2016

2014-

2015

2014-

2015

Student

enrollment

966 981 932 933 899

At-Risk 59.9% 55.0% 57.6% 49.1% 36.5% 43.3% 51.2%

Economically

Disadvantage

92.3% 92.5% 93.8% 90.7% 95.4% 49.9% 58.8%

Special

Education

14.7% 14.2% 14.4% 12.4% 13.5% 8.2% 8.5%

Career &

Technology

21.4% 20.4% 18.9% 22.1% 25.7% 23.3% 23.2%

Bilingual or

ESL

11.2% 12.5% 13.2% 13.1% 14.7% 13.3% 17.8%

Gifted and

Talented

5.3% 4.4% 4.0% 4.0% 3.4% 6.8% 7.6%


Table 2A. Staff Fulltime Equivalents (FTEs) 2011-2012 through 2015-2016


Chart 2A. Staff FTEs - 2011-2012 through 2015-2016

Position

2011-

20122012-

2013

2013-

2014

2014-

2015

2015-

2016

Total staff FTEs 171.8 170.3 169.2 166.1 169.1

Teachers 78.4 80.5 83.5 71.9 75.6

Professional Support 11 10.6 9 13.5 11.6

Campus

Administration

5 5 5 6 8.4

Central Administration 3 3 4.4 4.4 3.3

Educational Aides 28 25.8 25 18.4 23.5

Auxiliary Staff 46.4 45.4 42.3 52 46.7

Change in total staff

from prior year

-1.5 -1.1 -3.1 3

Teacher to Student

Ratio

12.3 12.2 11.2 13.0 11.9

Total Students 966 981 932 933 899

162

164

166

168

170

172

2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Staff FTEs

Total staff FTEs


Chart 2B. Total Staff & Teacher FTEs - 2011-2012 through 2015-2016

Chart 2C. Other Staff FTEs by Type - 2011-2012 through 2015-2016

The District’s student enrollment decreased by 34 students from 2014-2015 to 2015-2016; however, the total number of teacher FTEs increased by 3.7 FTEs. The increase in teachers resulted in a decrease in the District’s student to teacher ratio from 13.0 in 2014-2015 to 11.9 in 2015-2016. The professional support category has experienced the highest overall growth over the past five (5) school years from a low of 9.0 FTEs to a high of 13.5 FTEs in 2014-2015. The total number of educational aides has ranged from a low of 18.4 FTEs (2014-2015) to 28.0 FTEs (2011-2012). The other employee categories appear to have experienced similar increases and/or decreases over the past five (5) years.

0

50

100

150

200

Total staff FTEs Teachers

Staff FTEs by Type

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016

0

10

20

30

40

50

60

Professional

Support

Campus

Administration

Central

Administration

Educational

Aides

Auxiliary Staff

Staff FTEs by Type

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016


Over a five-year period as shown in Table 2B, cumulative staff decreased by 2.7 FTEs and enrollment decreased by 67 students. The decrease in student enrollment during this same five (5) year period was approximately 7%, yet the decrease in staff FTEs was approximately 2%.

Table 2B. Comparison of Changes in Staff FTEs and Students, 2011-2012 through 2015-2016

Table 2C illustrates the total staff FTEs and FTEs in each PEIMS category during 2014-2015 for Hearne ISD and the peer school districts. The student enrollment at Hearne ISD is comparable to the peer school districts. It appears that the greatest variances in staff between Hearne ISD and Onalaska ISD (the most similarly sized district) are in the teachers, professional support, and campus administration employee groups. For example, Hearne ISD has 10.0 more professional support FTEs than Onalaska ISD.

2011-

20122012-

2013

2013-

2014

2014-

2015

2015-

2016

Student

enrollment 966 981 932 933 899

Change 15 -49 1 -34

Aggregate

Change

-67

Position

2011-

20122012-

2013

2013-

2014

2014-

2015

2015-

2016

Total staff

FTEs

171.8 170.3 169.2 166.1 169.1

Change -1.5 -1.1 -3.1 3

Aggregate

Change

-2.7


Table 2C. Staff Fulltime Equivalents (FTEs) 2014-2015 Hearne ISD and Peer School Districts

The students to teacher ratios over the five (5) year period for the District have ranged from a low of 11.2 in 2013-2014 to a high of 13.0 in 2014-2015.

Table 2D. Students to Teacher Ratios, 2011-2012 through 2015-2016

In the comparison of the students to teacher ratios between the District and the peer school districts during the 2014-2015 school year in Table 2E, the District is below the state average of 15.2, the ESC Region 6 average of 15.0, but above the peer school district average of 12.0 students per teacher.

Corrigan-

Camden ISD

Daingerfield-

Lone Star ISD Hearne ISD Onalaska ISD

Total Staff FTEs 179.2 196.2 166.1 152.5

Teachers 91.1 95 71.9 67.7

Professional Support 5 13.5 13.5 3.1

Campus Administration 8.8 5.1 6 3.3

Central Administration 2 4 4.4 4

Educational Aides 28 20.9 18.4 25.8

Auxiliary Staff 44.4 57.6 52 48.6

Total Students 988 1,085 933 893

Students per Total

Staff 5.5 5.5 5.6 5.9

Students per Teacher 10.8 11.4 13.0 13.2

2014-2015

School

Year

2011-2012 966 78.4 12.3

2012-2013 981 80.5 12.2

2013-2014 932 83.5 11.2

2014-2015 933 71.9 13.0

2015-2016 899 75.6 11.9

District-wide

Enrollment

Teacher

FTEs

Pupil Teacher

Ratio


Table 2E. Students to Teacher Ratios, 2014-2015 Hearne ISD and Peer School Districts

The students to total staff ratios for the District and the peer school districts are noted below in Table 2F. All of the districts had a similar ratio during 2014-2015.

Table 2F. Students to Total Staff Ratios, 2014-2015 Hearne ISD and Peer School Districts

School District Enrollment Teacher FTEs

Pupil Teacher

Ratio

Corrigan-Camden ISD 988 91.1 10.8

Daingerfield-Lone Star ISD 1,085 95.0 11.4

Hearne ISD 933 71.9 13.0

Onalaska ISD 893 67.7 13.2

Peer District Average

PTR 974.75 81.4 12.0

State Average 15.2

Region 6 Average 15.0

2014-2015

School District Enrollment

Total Staff

FTEs

Students to Total

Staff Ratio

Corrigan-Camden ISD 988 179.2 5.5

Daingerfield-Lone Star ISD 1,085 196.2 5.5

Hearne ISD 933 166.1 5.6

Onalaska ISD 893 152.5 5.9

Peer District Average

PTR 974.75 173.5 5.6

2014-2015


Average Staff Salaries

Approximately 80% of a district’s budget is typically comprised of salaries and benefits. The District’s average salaries for professional staff for a five-year period are shown below in Table 2G. The same information is shown graphically in Graph 2D. The average salaries in the Teachers and Professional Support employee increased over the past five (5) years; however, the average salaries for the Campus and Central Administration categories decreased over this same period. The decreases may be due to changes in campus and central administrative leadership over the past five (5) years and possible reporting of partial salaries in the Fall PEIMS submission.

Table 2G. Hearne ISD Average Base Salaries by Category

Graph 2D. Hearne ISD Average Base Salaries by Category

Table 2H compares peer district salaries for the above categories during 2014-2015. The salary comparisons can be very helpful in determining whether or not the District is competitive with its neighboring and/or peer school districts. However, one should keep in mind that comparing one category to another can be misleading. Categories other than teachers are usually made up of very small sets of staff. Salary variances can have a much

Year TeachersProfessional

Support

Campus

Admin

Central

Admin

2011-2012 $38,307 $42,708 $65,179 $71,167

2012-2013 $38,434 $45,703 $67,868 $71,333

2013-2014 $36,682 $39,489 $61,769 $52,607

2014-2015 $41,356 $42,603 $59,959 $69,003

2015-2016 $42,020 $41,768 $59,329 $63,573

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

Teachers Professional

Support

Campus Admin Central Admin

Hearne ISD Average Salaries

2011-12 to 2015-16

2011-2012

2012-2013

2013-2014

2014-2015

2015-2016


larger effect on the average of the group than the teacher category that has a much larger base of numbers by which to calculate the average. In the teacher salary category, Hearne ISD’s average salary is below the peer average of $43,455 and below all peer school districts, including the Region 6 and state averages. The District is slightly below the peer professional support average salary of $47,939. The campus and central administrative salary categories at Hearne ISD are below the peer average, the peer school districts, and substantially lower than the state and regional averages.

Table 2H. Peer District Average Salaries 2014-2015

Graph 2E. Hearne ISD Average Base Salaries by Category

District Enrollment

Corrigan-Camden ISD 988 $42,698 $47,892 $46,662 $80,450

Daingerfield-Lone Star ISD 1,085 $45,477 $49,707 $67,267 $75,259

Hearne ISD 933 $41,356 $42,603 $59,959 $69,003

Onalaska ISD 893 $44,288 $51,553 $67,448 $85,212

Peer district average $43,455 $47,939 $60,334 $77,481

Region Average 2014-2015 $49,154 $58,171 $73,888 $95,202

State Average 2014-2015 $50,715 $59,791 $74,292 $96,907

Average

Teacher

Salary

2014-2015

Central

Administration

Campus

Administration

Professional

Support

$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000$90,000

Average Salaries - Hearne ISD & Peer ISDs

Average Teacher Salary

Professional Support

Campus Administration

Central Administration


The teacher turnover rate and average years of experience greatly influence the average teacher salary. Table 2I reflects the 2014-2015 teacher turnover rate and average years of experience at Hearne ISD and the peer school districts. The table also includes the Region 6 and state averages. The indicators in Table 2I typically reflect a school district’s ability to retain teachers. Competitive salaries, benefits and working conditions are important factors affecting teacher retention. The District’s 2014-2015 teacher turnover rate of 59.3 is substantially higher than the peer school districts, and the state and region averages. The District’s turnover rate of 59.3 also presents challenges such as the high cost of hiring and onboarding new employees and an increased need to train new teachers. The District is the lowest of the peer districts in average years of total experience and average years of experience with the District. As noted above, the lower than average teacher average salaries may have contributed to the high teacher turnover rate.

Table 2I. Peer District Turnover Rate and Average Experience for Teachers 2014-2015

DistrictTeacher

Turnover Rate

Average Years of

Total Experience

Average Years

of Exp with

HISD

Corrigan-Camden ISD 17.7 12.5 9.1

Daingerfield-Lone Star ISD 17.0 16.7 12.9

Hearne ISD 59.3 7.7 3.1

Onalaska ISD 24.7 10.0 4.9

Peer district average 29.7 11.7 7.5

Region Average 2014-2015 18.7 11.4 6.9

State Average 2014-2015 16.6 11.0 7.5


Financial Data

The District experienced growth in taxable values over the past four (4) years, but decreased in 2014 by approximately $12.7 million. According to the 2015-2016 adopted budget, the tax rate for 2015-2016 will remained the same; Maintenance & Operation at $1.04 and Interest & Sinking at $0.23, for a total tax rate of $1.27.

A decrease in tax values may have an impact on state funding and the overall revenue sources to support the District’s budget.

Table 3A. Final Property Value Study – 2010 through 2014

Source: Texas Comptroller of Public Accounts: PVS Findings

The District ended the 2014-2015 fiscal year with an Unassigned Fund Balance of $2.0 million which represents a decrease of $557,153 from the end of the 2013-2014 fiscal year. The District has experienced a decrease over the past four (4) years in both the Unassigned Fund Balance and the Total Fund Balance in the General Fund.

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

$500,000,000

2010 2011 2012 2013 2014

Property Value Study - Final


The four-year change in fund balance in the General Fund is illustrated below:

Table 3B. Ending Fund Balance – FY 2012 through FY 2015

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

Unassigned Total

Ending Fund Balance

FY 2012 through FY 2015

2011-2012

2012-2013

2013-2014

2014-2015


An overview of the District’s revenue sources during the 2014-2015 fiscal year is illustrated below:

Chart 3A. Revenue Sources – General Fund – FY 2014-2015

Chart 3B. Revenue Sources – All Funds – FY 2014-2015

52%

41%

7%

General Fund - FY 2014-2015

Local State Federal

51% 34%

15%

All Funds - FY 2014-2015

Local State Federal


Per Pupil Expenditures

During the 2013-2014 fiscal year, Hearne ISD spent more General Fund operating dollars than the peer districts. Hearne ISD spent more operating expenditures for All Funds than any of the peer school districts. Table 3C lists the comparative spending figures for 2013-2014. Only operating expenditures are included in this chart which eliminates capital outlay and debt service. The capital outlay and debt expenses tend to vary widely between districts and can distort spending comparisons. The District’s per pupil expenditures are higher than the peer school districts even though the average salaries are lower. A detailed review of all District expenditures may reveal why the District expenditures exceed the peer school districts.

Table 3C. Peer District Operating Expenditures 2013-2014

Per Pupil Per Pupil

District Enrollment Operating

Expenditures

Operating

Expenditures

(General Fund) (All Funds)

Corrigan-Camden ISD 1,026 $7,588 $10,104

Daingerfield-Lone Star ISD 1,123 $8,020 $10,130

Hearne ISD 932 $9,542 $10,797

Onalaska ISD 914 $8,237 $9,705

2013-2014

Chart 3C. Peer District Per Pupil Expenditures

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Corrigan-Camden

ISD

Daingerfield-Lone

Star ISD

Hearne ISD Onalaska ISD

Per Pupil Expenditures

General Fund

All Funds


Hearne ISD ACCOUNTING & FINANCE

[Including Purchasing and Payroll]


Overview The business operations of Hearne ISD include budget, audit, purchasing, payroll, accounts payable, accounts receivable, general ledger maintenance, and other related services. The current staffing in the business department is as follows:

Position Exempt/

Non-Exempt Supervisor

Business Manager Exempt Superintendent

Payroll Clerk/Benefits Specialist

Non-exempt Business Manager

Accounts Payable Clerk/Administrative Assistant

Non-exempt Business Manager & Director of Operations and Instruction

Central Office Receptionist Non-exempt Business Manager

The primary duties, as noted on the respective job description, are summarized below: Business Manager Direct and manage the operation of all financial and

business affairs of the District including accounting, payroll, purchasing, risk management, and tax collection. Serve as the chief financial adviser to the Superintendent and Board of Trustees.

Payroll/Benefits Specialist Direct and manage payroll activities of the District; and develop and implement payroll procedures to ensure timely processing of payroll and applicable payment of all benefits and payroll deductions.

Accounts Payable Clerk Receive and process for payment all accounts payable invoices, requisitions, purchase orders, receipts and vendor information. Serve as assist to the Director of Operations and Instruction and Business Manager.

Central Office Receptionist Under direct supervision, respond to inquiries from staff, students, parents and the public; receive deliveries and disseminate materials; process requisitions and purchase orders; reconcile and mail out accounts payable checks; and maintain vendor files.

Some of the ongoing responsibilities of the business department include the following:

Accounting – general ledger maintenance

Accounts Payable – checks to vendors issued approximately three (3) times per month


Accounts Receivable – funds are collected, counted and transported to the depository bank

Payroll – payroll disbursements are monthly on or near the 23rd of the month

Fixed assets – recording of all assets

Budgeting – preparing, amending and monitoring the budget

Purchasing – approval of all purchases of goods and services

Audit Preparation – preparing all financial documents for the annual audit

The District is utilizing the TxEIS software system for all business functions. The system is self-hosted by the District but is updated remotely by the Education Service Center, Region 6 TxEIS support staff. The District’s timekeeping system, Time Clock Plus, was implemented approximately nine (9) years ago. It is used to collect only non-exempt staff work hours. As of 2014-2015, the District implemented the AESOP system to track staff absences and assign substitute teaching staff. The TxEIS Business System consists of the following modules.

Accounts Receivable

Asset Management

Bank Reconciliations

Budget

Employee Access/Self-Service

Finance

Human Resources

Purchasing

Warehouse


Overall Commendations

Staff members were courteous, accommodating and helpful to the review team.

The District has taken the initiative to conduct this TASBO Management Review

to identify potential areas of improvement in business operations.

The District obtained assistance in estimating state revenue using the Summary of

Finance template from the Education Service Center, Region 6.

The District appears to have implemented effective hiring procedures. The

District should create written hiring procedures to ensure consistency in practices.

The District has established a centralized accounting system for all activity

accounts. The campus and student activity accounts are managed through the

TxEIS business system.

The District implemented an on-line application system, School Recruiter. This

system provides an excellent tool for campus principals and department heads to

conduct applicant screening.

Some of the business office staff members have several years of experience and

are well trained in their respective area(s) of responsibility.

Findings and Recommendations

Overall Accounting & Finance

1. Finding. The District business staff is not utilizing the full potential of the TxEIS

Finance, Payroll, and related modules. Employees do not appear knowledgeable of

the full functionality of the TxEIS system and rely on spreadsheets and paper forms

instead of utilizing the TxEIS system modules.

Recommendation. The Business Manager should compile a list of training needs for all

business staff and prepare a training plan. The Education Service Center, Region 6 (ESC

6) should be contacted to provide targeted training to meet the needs identified on the

training plan.

2. Finding. The Business Manager and Technology Specialist, and Assistant

Technology Specialist have System Administrator access to establish the users of the

TxEIS Business System. All three (3) appear to have full access to grant or deny

access to any District employee, including themselves. This is an internal control

concern, not for the Technology staff, but for the Business Manager position. The

Business Manager is currently performing many of the business transactions directly

on an independent basis with no involvement or oversight from other business staff.


Recommendation. The District should establish written procedures related to Security

Administration of the TxEIS System. The procedures should ensure that the Business

Manager does not have Security Administration access. The access for the Business

Manager and other accounting staff should be granted by the Technology Specialist.

The procedures should include appropriate internal controls to protect the District from

unauthorized access or fraud. As part of the employee exit process, all security access to

sensitive data, such as the data stored in the TxEIS System, should be terminated

immediately upon separation of employment.

3. Finding. The Finance department has not implemented adequate internal controls over financial transactions. There are four (4) Finance department staff members – an adequate number of staff to establish adequate internal controls in cash management, general ledger maintenance, bank reconciliations, and other finance transactions. The Business Manager is currently the only business department staff member that manages and records cash deposits, creates and posts journal entries to adjust the general ledger, and receives and reviews bank reconciliations.

Recommendation. The Business Manager should develop written internal control procedures that ensure adequate separation of duties in all financial transactions. The internal controls should be approved by the Superintendent and implemented as soon as possible.

4. Finding. The District developed a Procedures Manual for Internal Controls in April

2009. However, the Business Manager was unaware that the manual existed until she

located it during the on-site visit. As a result, the business department has been

operating without a business procedures manual. The lack of procedural manuals is

directly related to some of the non-compliance issues identified in this report.

Recommendation. The Business Manager should develop and implement a business procedures manual to promote overall effectiveness and deter waste, fraud or abuse. Training should be conducted for all stakeholders as time allows during the fiscal year, but at a minimum, all of the current manuals should be posted on the District webpage or Intranet for easy access by campus and departmental staff responsible for managing district business functions. 5. Finding. The District’s Attendance Procedures do not include all of the required

information as noted in TEA’s Student Attendance Accounting Handbook. The procedures manual is essential to ensure that the District’s attendance documentation is in compliance with the procedures and created at the time of attendance. Failure to ensure that the attendance records are accepted by TEA auditors could result in a substantial loss of state funds. The SAAH states: District


personnel must create the original documentation of attendance at the time of attendance. Original documentation must not be created after the fact. Original documentation that is not created at the time of attendance will not be accepted by agency auditors. If auditors determine that original documentation was not created at the time of the attendance it is intended to support, the TEA will retain 100% of your

district’s FSP allotment for the inappropriately documented attendance for the school year(s) for which records have been requested.

Student Attendance Accounting Handbook Excerpt: 2.2.5 Attendance System Procedures Manual Your district or charter school must maintain a procedures manual that provides specific, detailed information on the district’s school attendance accounting system. This procedure manual must include the following information:

how and when teachers are to take official attendance,

how attendance is entered into the attendance accounting system,

which position or positions are responsible for the coding of special programs (such as career and technical education, special education, pregnancy-related services, etc.),

how changes to special programs are to be documented,

how student membership is to be reconciled between the teacher rosters and the attendance accounting database,

how your district will maintain attendance accounting records (including computerized records, period absence slips, and official calendar) after the completion of the school year,

what backup systems are in place to protect the attendance accounting records, and

which position is responsible for the maintenance and security of the attendance accounting records.

Recommendation. The District should revise the existing Attendance Procedures to include the information required in the SAAH, as noted above. The Business Manager and PEIMS Coordinator should work collaboratively to ensure that the Attendance Procedures meet the minimum requirements of the SAAH to protect the District’s projected FSP allotment in 2015-2016 of $3.5 million, or 40% of the annual budget.

Budget Development and Monitoring Process

1. Finding. The Business Manager failed to monitor the 2014-2015 adopted budgets

throughout the fiscal year to ensure compliance with state law and local policy related

to amending the official budget before exceeding a functional expenditure category.

This is a failure in financial management and in violation of state law, state rules and

local Board policy. Budget amendments are mandated by the state for budgeted funds

reallocated from one function level, and state and/or federal project to another. All

budget amendments are required to be adopted by the Board (and verified in the

Board Minutes) before the last day of the fiscal year.


In reviewing the District’s 2014-2015 final amended budget, as reported in the

Annual Financial Report [8/31/2015], we observed the following deficiencies in

monitoring the District’s General Fund and Food Service Fund adopted budgets.

o In the General Fund, the District overspent three (3) functions [36, 41 and

51]. The aggregate excess expenditures in these functions totaled $50,053.

o In the Food Service Fund, the District overspent function 35 by $77,206.

This failure to comply with state law and Board policy is of great concern as we

also observed that during the prior fiscal year [2013-2014], the District overspent

two functions (21 and 51) totaling $10,117 in the aggregate.

State law, Texas Education Code (TEC), sections 44.002 through 44.006 establish the

legal basis for budget development in school districts. Specifically, TEC 44.006

states, (a) Public funds of the school district may not be spent in any manner other

than as provided for in the budget adopted by the board of trustees, but the board

may amend a budget or adopt a supplementary emergency budget to cover necessary

unforeseen expenses. (b) Any amendment or supplementary budget must be prepared

and filed according to rules adopted by the State Board of Education.

In addition, the Texas Education Agency (TEA) has additional requirements related

to budget adoption and monitoring. The Financial Accountability System Resource

Guide (FASRG) Budget Module states that: A school district must amend the official

budget before exceeding a functional expenditure category, i.e., instruction,

administration, etc., in the total district budget.

School Board Policy CE Local Annual Operating Budget also includes local

regulations related to budget planning and monitoring. Under the Authorized

Expenditures section, it states: The adopted budget provides authority to expend funds for

the purposes indicated and in accordance with state law, Board policy, and the District’s approved purchasing procedures. The expenditure of funds shall be under the direction of the

Superintendent or designee who shall ensure that funds are expended in accordance with the

adopted budget.

And, under the Budget Amendments section the policy states: The Board shall amend the

budget when a change is made increasing any one of the functional spending categories or

increasing revenue object accounts and other resources.

The Business Manager’s job description (dated November 2011) reflects that this position is

responsible for budgetary control functions such as: preparing all budget adjustments,

additions and deletions; implementing policies established by federal and state law, State

Board of Education rule and local board policy in area of business operations; and, preparing

and evaluating monthly financial statements and related budget reports.

Recommendation. The Business Manager should monitor and report [to the School Board and other stakeholders] all adopted budgets on a monthly basis to ensure


compliance with state law in all aspects, to include amending the official budget before exceeding a functional expenditure category. A one-page Budget Summary of all adopted budgets should be developed and presented

to the Board on a monthly basis. In addition, the Business Manager should provide

training to the School Board, Superintendent and Cabinet-level administrative staff to

ensure that all stakeholders are aware of the state of the budget throughout the fiscal year.

A sample Budget Summary is included in the Exhibit Section.

2. Finding. The District is not using a collaborative approach to develop the annual

operating budget. According to staff interviews, the budget has been developed using

a “top-down” approach that may not allow for budgeting using a site-based decision

making approach.

According to the FASRG also states: While site-based budgeting is not a statutory requirement, it is highly recommended that the superintendent, in collaboration with the school board, utilize site-based budgeting methods in the development of the school district’s annual budget. A school district's site-based budget plan, however, must adhere to rules established by TEA and the state legislature (e.g., legal level of control requirements). Board Policy CE (Local) states: Budget planning shall be an integral part of overall program planning so that the budget effectively reflects the District’s programs and activities and provides the resources to implement them. In the budget planning process, general educational goals, specific program goals, and alternatives for achieving program goals shall be considered, as well as input from the District- and campus-level planning and decision-making committees. Budget planning and evaluation are continuous processes and shall be a part of each month’s activities.

Recommendation. The District should develop and implement budget development

procedures to include an annual budget timeline, revenue estimates, campus and

department allocations, and preparation of a District budget that meets the needs of the

District.

The Business Manager should provide training related to the budget development

procedures to all budget stakeholders, especially the campus principals.

3. Finding. The District does not have a staffing formula or position control system.

Both of these tools are essential to maintain budgetary controls over salary and

benefit costs.

Recommendation. The District should develop and implement both a staffing formula

and position control system in conjunction with the budget planning process for 2016-

2017.


Finance/Accounting/Auditing

1. The District’s most recent Annual Financial Report (AFR) for the period ending

August 31, 2015 contains a significant deficiency related to internal controls over

financial reporting. The AFR states: Our consideration of internal control was for the

limited purpose described in the first paragraph of this section [Independent

Auditor’s Report on Internal Control over Financial Reporting…] and was not

designed to identify all deficiencies in internal control that might be material

weaknesses or, significant deficiencies. Given these limitations, during our audit we

did identify the deficiencies in internal control that we consider to be material

weakness: Donation of scholarship funds in the amount of $288,862 not recorded on

books in 2014.

The Schedule of Findings and Questioned Costs for the Year Ended August 31, 2015,

reflects a significant deficiency as noted below:

Reconciliations for Finance Clearing Cash Account and General Operating

Accounts were not completed on a timely basis, and not completed until

December 2015. [Finding 2015-1]

The schedule does not reflect whether the District had any material

weaknesses related to internal controls over financial reporting. Neither yes or

no are checked on the schedule. The Independent Auditor’s Report on Internal Controls (letter) includes language that states: Given these limitations, during

our audit we did identify the deficiencies in internal controls that we consider

to be material weakness.

Detailed information related to these findings is included in the District’s Annual Financial Report for the period ending August 31, 2015.

Recommendation. The Business Manager has overall responsibility for the Annual

Financial Report and as such should take a leadership role in addressing the findings as

noted above.

At a minimum, the Business Manager should implement the Recommendations noted

below related to cash management as soon as possible.

Business Manager should maintain a continuous auditing program for all funds and assist

the District independent auditor(s) in conducting the annual and periodic audit. [As noted

in the Fiscal Management section of the Business Manager’s job description.]


2. Finding. The Accounts Payable department is issuing manual accounts payable

checks quite often during the first and second week of each month. Issuing manual

checks is always a high risk activity due to the possibility of errors such as failing to

post the check to the finance general ledger.

The District’s Proposed Bill Pay Dates for 2015-2016 (schedule of accounts payable

checks) reflects that checks are processed three (3) times a month, generally during

the 2nd through 4th weeks of the month.

According to District staff, the manual checks are issued because of a delay in

processing the end-of-month close for a prior month. The TxEIS business system

allows users to have two (2) months open for processing at one time. On February 11,

2016, we observed that the end-of-month process for December 2015 was not

complete. As a result, no checks, deposits, budget transfers of other financial

transactions could be posted for the month of February 2016. By February 1, 2016,

the Business Manager should have processed the end-of-month close for December

2015 and opened the February 2016 month for processing of financial transactions.

Failure to issue accounts payable checks on a weekly basis may also have an adverse

effect on the District’s ability to take advantage of vendor discounts for early

payments, or to pay all invoices within the required 30-day period as required by the

Texas Prompt Payment Act.

Recommendation: The business department should conduct a cost benefit analysis of

issuing accounts payable checks on a weekly basis. The analysis should include the level

of staffing, number of payments issued on a bi-weekly basis, cash flow projections, etc.

The business department should develop and implement accounts payable procedures to

ensure consistence in reviewing and approving all check disbursements.

Additionally, end-of-month close written procedures should be developed and

implemented to ensure that all finance transactions are posted to the general ledger on a

timely basis. The procedures should include the following:

Checklist of reconciliations that includes position responsible for the

reconciliation and the frequency of the reconciliation (monthly, quarterly or

annually)

Process for posting necessary reconciling items to the general ledger

Checklist of monthly journal entries

Review of accounts payable and purchase order aging reports

Sample Accounts Payable Processing and End-of-Month Procedures are included in

the Exhibit Section.


3. Finding. The Finance department is not performing the required receiving functions

prior to issuing accounts payable disbursements even though the District has

centralized receiving at the administration building. Accounts payable check

disbursements should be processed only when a three-way match has been completed

which includes: 1) purchase order, 2) invoice and 3) proof of receipt.

Purchase order shipments are received at the administration building and delivered by

a courier to the campus or department. The business office staff does not process

(count & verify) the shipments prior to the delivery to the campus or department.

Districts that are similar in size to Hearne ISD generally implement a centralized

receiving system to streamline the verification of orders, to expedite payment to

vendors, and lessen the burden on the campuses and departments.

The TxEIS business system includes an online receiving function that promotes

prompt payment to the vendors. This function is not being utilized by the business

office staff.

Recommendation: The business department should establish receiving procedures to

include the verification process of all purchase orders at the point of delivery at the

administrative building. After receipt and verification of the goods, the supporting

documentation such as packing list and/or invoice should be forwarded to the accounts

payable clerk for payment. And, the goods should be delivered to the appropriate campus

or department to ensure that they receive all goods on a timely basis.

The business department should utilize the TxEIS business system to post the receipt of

all goods.

4. Finding. The Finance department is not consistently adhering to TEA’s Financial

Accounting System Resource Guide (FASRG) required account codes. For example,

a review of the 2014-2015 check payments revealed that the District spent over

$199,000 in object code 6219 Professional Services. According to the FASRG, object

code 6219 should be used to classify expenditures/expenses for professional services

rendered by professionals required to be licensed or registered with the state in

accordance with Government Code 2254.002. Examples of professionals under this

code include: physicians, nurses, attorneys, architects, etc.

The District classified expenditures for athletic event officials, security services, drug

dog services, uniform services, Education Service Center professional development

services and other types of expenditures.


Recommendation: The business department should adhere to the FASRG account code

structure and ensure that all expenses are classified to correct account code. Training

related to account coding is available through TASBO. A course title, Financial Coding

for Texas Schools, is readily available through TASBO’s online course offerings.

Cash Management

1. Finding. The District’s bank account reconciliations and other balance sheet

reconciliations are not being completed on a timely. Additionally, bank account

reconciliations are not being performed using the automated TxEIS Bank

Reconciliation system.

The District has six (6) bank accounts as noted below:

Operating Account

Athletic Account

Debt Service Account

Finance Account

Payroll Account

Student Activity Account

The District’s 2014-2015 Annual Financial Report (AFR) included a significant

deficiency related to internal controls over financial reporting due to the “Untimely Reconciliations of Finance Clearing and General Operating Accounts”. The report

noted that the reconciliations were not complete until December 2015. The report also

noted: The Business Manager contracted with the ESC 6 to complete the

reconciliations, but due to a spam issue the ESC did not receive nor reconcile the

accounts. The Business Manager did not follow up with the ESC throughout the fiscal

year to verify the status of the reconciliations until she was gathering documents on

the District’s PBC List (Prepared by Client).

The District’s 2013-2014 AFR included prior year financial statement findings related

to “Untimely Reconciliations of the Finance Clearing Cash Account”. The report noted that the reconciliations were not complete until December 2013 [for fiscal year

2012-2013]. There is no mention in the AFR whether bank reconciliations were

completed timely during the 2013-2014 fiscal year.

During the on-site visit (February 10-11, 2016), the TASBO team requested a copy of

the latest reconciled bank statements for 2015-2016. The Business Manager stated

that the latest bank reconciliation that she completed was for the month of November

2015, yet was unable to produce a copy during the on-site visit.


On February 26, 2016, the Business Manager provided a copy of three (3) bank

statements: Debt, Athletics and General Operating. The aggregate balances in these

three (3) bank accounts as of December 31, 2015 was $3,505,132.77. Copies of

manual ledgers with revenues and expenditures were also provided on February 26,

2016. The TASBO team repeatedly requested a check register for the month of

December to review the bank statements, but the information was not received by the

team. As a result, we are unable to ascertain the status of the District bank

reconciliations or cash position.

On March 3, 2016, the team received a copy of a TxEIS Business Contracted Services

Agreement for bank reconciliation services. The agreement was executed by the

Business Manager on February 5, 2016. As of the date of this report, to the

knowledge of the TASBO team, the bank reconciliation services have not begun.

The Business Manager’s job description (dated November 2011) reflects that this position is responsible for overseeing the preparation of monthly bank reconciliations.

The inability to review the 2015-2016 bank reconciliations, check registers, cash

receipts journals and other cash management reports is concerning as we are

unable to identify potential issues related to the procedures and internal controls

over cash management, general ledger maintenance, cleared and outstanding

checks, available cash balance, etc.

Recommendation: The District should immediately reconcile all bank accounts to

determine if there is any fraud or misuse of District funds. In addition, the District should

obtain an independent review (Agreed Upon Procedures or Forensic Audit) of the

District’s bank accounts to verify the accuracy of the financial statements.

The District should consolidate bank accounts to the minimum required to manage the

District’s General Operating Funds, Debt Service Funds, Capital Outlay (Construction),

and Activity Funds.

The monthly reconciliation of bank accounts and balance sheet accounts should be part of

a systematic end-of-month close process. The District should work to ensure that

reconciliations are brought current and old unreconciled items are resolved and

appropriate personnel should be trained in the use of TxEIS bank reconciliation features.

Even if the District contracts with an outside entity to reconcile the bank accounts, the

Business Manager should be responsible to ensure that the bank reconciliations are

performed on a monthly basis and prior to performing the end-of-month close

procedures.

2. Finding. The District has not established anti-fraud protections over the deposited

funds such as on-line banking reports and Positive Pay service.


The District’s depository bank has an on-line banking service available, but the

District is not using the service to review daily banking reports. Daily banking reports

are essential to verify the available cash and daily deposits and withdrawals.

The District is not utilizing a Positive Pay service through the depository bank. Bank

Positive Pay is an anti-fraud service offered by virtually every US commercial bank.

It protects businesses against altered checks and counterfeit check fraud.

The lack of a Positive Pay service is of concern due to the findings noted above

regarding the failure to reconcile bank accounts on a timely basis. If the District

was subject to fraud by check, the District would not be (is not) aware of the

fraud for potentially several months or up to a year until the bank accounts are

reconciled to the general ledger. The District would likely be unable to recoup

any funds lost through fraudulent activity as the loss would not be reported in a

timely manner to the bank.

Through the Positive Pay service, a format file is created by the District and provided

(uploaded) to the depository bank for use in verifying the authenticity of every check

presented to the bank. The bank verifies that the check number, payee and amount on

a check presented for payment match the District’s file. If a match does not exist, the check presented to the bank is rejected and not processed from the District’s bank account.

The District’s TxEIS business system includes an automated function to generate the format file. No additional cost is required to implement the file creation.

Recommendation: The District should contact the depository bank to verify if the

service is available and the cost of the service, as applicable. If the service is available

at the depository bank, the District should amend the depository services agreements

to include the service. If the service is not available at the current depository bank, the

District should consider other fraud-deterrent services to mitigate the possibility of

external fraud.

3. Finding. The District has not implemented internal controls over cash management

such as segregation of duties. All cash management duties are performed by the

Business Manager. The duties include, but are not limited to collecting, counting,

transporting, depositing, recording cash transactions on the general ledger, and

responsibility for reconciling bank accounts.


The illustration below is a graphical representation of one (1) staff member [Business

Manager] handling all aspects of cash management.

TEA’s Internal Controls Handbook includes Segregation of Duties under the Control

Activities. Specifically, a District should separate authorization, custody, and record

keeping roles to prevent fraud or error by one person.

Recommendation: The District should develop and implement cash management

procedures. The procedures should address collecting, receipting, transporting,

depositing, recording, monitoring, and reconciling cash transactions. The business

office has an adequate number of staff members to allow for segregation of cash

management duties.

Sample Cash Management Procedures are included in the Exhibit Section.

4. Finding. The District is not in compliance with all aspects of state law [Public Funds

Investment Act (PFIA)] nor School Board Policies CDA Legal and Local as they

relate to the investment of District funds. The PFIA requires quarterly investment

reports, approval of Investment Brokers, approval of Investment Sources and an

Annual Review of Investment Strategies and Board Policies. None of these

requirements have been presented to the School Board for review and/or approval for

at least the past two (2) years.

Business Manager

Counts Cash

Deposits Cash

Records Cash

(GL)

Reonciles Bank

Accounts


Board Policy CDA (Legal) states: Investments shall be made in accordance with

written policies approved by the Board. The Board adopted the most recent CDA

Local policy on May 18, 2015.

Other requirements of CDA Legal include:

The Board shall review its investment policy and investment strategies not

less than annually.

o The Board has not reviewed the policy and strategies in at least two (2)

years.

The District shall perform a compliance audit of management controls on

investments and adherence to the district’s established investment policies. The compliance audit shall be performed in conjunction with the annual

financial audit.

o The 2014-2015 Annual Financial Report did not disclose non-compliance with the PFIA. Note A of the Annual Financial Report states: The district is in substantial compliance with the requirements of the Act and with local policies.

Not less than quarterly, an investment officer shall prepare and submit to a

board a written report of investment transactions for all funds covered by the

Public Funds Investment Act for the preceding reporting period.

o The Board has not reviewed and/or approved quarterly investment

reports in at least two (2) years.

The Board or a designated investment committee, shall, at least annually,

review, revise, and adopt a list of qualified brokers that are authorized to

engage in investment transactions with a district. Gov’t Code 2256.025

o The Board has not adopted a list of qualified brokers in at least two (2)

years.

A written copy of the investment policy shall be presented to any person

offering to engage in an investment transaction with a district or to an

investment management firm under contract with a district to invest or

manage the district’s investment portfolio. o The Investment Officer [Business Manager] was not aware of any

written certifications from the investment brokers/sources.

Board Policy CDA (Local) requires that:

The investment portfolio shall be diversified in terms of investment

instruments, maturity scheduling, and financial institutions to reduce risk of

loss resulting from overconcentration of assets in a specific class of

investments, specific maturity, or specific issuer.

o At the end of fiscal year 2014-2015, the District’s investment funds were in time deposits at the depository bank and an investment pool


(TexSTAR). During the on-site review the Investment Officer

[Business Manager] was in the process of closing the TexSTAR

account and moving all funds to the depository bank. The movement

of all invested funds to the depository bank would create a single

investment source and no diversification of funds and associated risks.

The investment officer shall monitor the investment portfolio and shall keep

the Board informed of significant changes in the market value of the District’s investment portfolio.

o The Investment Officer [Business Manager] has not monitored, nor

kept the Board informed of changes to the investment portfolio.

Prior to handling investments on behalf of the District, brokers/dealers must

submit required written documents in accordance with law.

o The Investment Officer [Business Manager] did not produce any

broker certifications for review during the on-site visit.

In addition to the quarterly report required by law and signed by the District’s investment officer, a comprehensive report on the investment program and

activity shall be presented annually to the Board.

o The Board has not reviewed and/or approved quarterly investment

reports in at least two (2) years.

The Board shall review this investment policy and investment strategies not

less than annually and shall document its review in writing, which shall

include whether any changes were made to either the investment policy or

investment strategies.

o The Board has not reviewed the policy and strategies in at least two (2)

years.

In conjunction with the annual financial audit, the District shall perform a

compliance audit of management controls on investments and adherence to

the District’s established investment policies.

o The 2014-2015 Annual Financial Report did not disclose non-

compliance with the PFIA. Note A of the Annual Financial Report

states: The district is in substantial compliance with the requirements

of the Act and with local policies.

The Business Manager’s job description (dated November 2011) reflects that this position is responsible for maintaining the district investment portfolio.

Recommendation. The Investment Officer [Business Manager] should develop and

implement written procedures related to compliance with the Public Funds Investment

Act (PFIA) to include policy revisions, broker certifications, diversification of funds and

other investment management responsibilities.


The District should ensure that at least two (2) investment officers are approved by the

Board, attend the PFIA-required training and work collaboratively to monitor

investments, diversify funds and prepare the required quarterly and annual reports.

The Investment Officer(s) should comply with all aspects of the PFIA as soon as possible

by preparing and submitting for Board action the PFIA-required designation of

investment officers, policy review, approval of brokers, and approval of quarterly report.

After Board approval of the investment brokers, the Investment Officer(s) should

distribute and collect Broker Certifications from all approved brokers prior to investing

funds.

Grants Management

1. Finding: The District has not implemented a system to track fixed assets and

inventory purchased with federal, state or local funds. Fixed assets are generally

defined as an item with a unit cost of $5,000 or more; and, inventory as an item with a

unit cost less than $5,000.

According to Board policy CFB (Local), the District has set the capitalization

threshold for purposes of classifying capital assets at $5,000.

The TxEIS business system includes a module to track assets and inventory, but the

District is not utilizing TxEIS for asset or inventory tracking purposes. The

technology department is tracking technology equipment with a unit cost greater than

$500 on an Access database.

The District has not performed a physical inventory of capital assets. Federal law

requires that a physical inventory be performed at least every two (2) years for assets

purchased with federal funds. An up-to-date inventory and fixed assets ledgers are

essential in the event of a loss due to theft, fire, vandalism or other catastrophic event.

The Business Manager’s job description (dated November 2011) reflects that this position is responsible for maintaining accurate and current computerized inventory

records of the District’s fixed and movable assets.

Recommendation: The Business Manager should develop and implement written

procedures for asset and inventory tracking and accounting. The TxEIS Assets module

should be used to track all assets. A complete fixed asset inventory should be performed

and reconciled to the fixed asset accounting record on at least an annual basis. All assets

with a unit cost over $5,000 must also be recorded on the finance general ledger for audit

purposes.


The procedures should include the acquisition, identification, reconciliation, inventory

and disposal of assets and inventory. In addition, the procedures should include the

federal requirements related to the acquisition, tracking and disposal of assets purchased

with federal grant funds.

Sample Fixed Asset Procedures are included in the Exhibit Section.

2. Finding. District employees who requisition, approve or use grant funds have not

received appropriate training on state and federal guidelines on allowable

expenditures. The Education Department General Administrative Regulations

(EDGAR) regulations are in effect for all federal grant awards after December 26,

2014. The Notice of Grant Award (NOGA) for the Title I, Part A grant states that the

District must comply with the New EDGAR including 2 C.F.R, Part 200.

[Supplement to Notice of Grant Award]

An EDGAR-compliant procedures manual has not been finalized, implemented, nor

provided to stakeholders for training purposes.

Recommendation: The Business Manager should take a leadership role in developing

and implementing an EDGAR-compliant Federal Grants Manual. Written procedures

related to the management of federal grant funds should have been in place by July 1,

2015 to comply with the new EDGAR. The District has been out of compliance with

federal grant requirements since July 1, 2015 as a result of the absence of required written

procedures related to federal grant management.

All District employees who requisition, approve or use grant funds should receive

training on the new federal regulations. Implementation of the manual is urgently needed

since the District had already spent a substantial amount of federal funds as of the on-site

visit. As of February 11, 2016, the District had recorded expenses totaling $114,482 in

Title I, Part A federal grant funds.

The District should either create a federal grants manual or obtain a template available

from an outside source. The District should consider enrolling in the TASBO State and

Federal Grants Manual webinar. Attendees of the webinar receive training regarding the

new regulations and a fill-in-the-blank template, forms and procedures to facilitate

compliance with the new EDGAR regulations. Additional information regarding the e-

learning opportunity is available at: http://www.tasbo.org/education/delivery/elearning.

3. Finding. The Business Manager has not budgeted federal grant funds on a timely

basis after receipt of the Notice of Grant Award (NOGA). For example, during the

on-site visit (February 2016), the Title I, Part A grant award totaled $568,481

(according to the NOGA dated 12/14/2015), but $0 were budgeted in the TxEIS

finance system. The Title I, Part A expenses totaling $114,482 (as of February 11,

2016) occurred without a budget and without budgetary controls. In the absence of a

http://www.tasbo.org/education/delivery/elearning


budget in the finance system, the District has little or no control over potential

overspending in the federal grant.

The tables below for fiscal years 2015-2016 and 2014-2015 indicate that the District

does not systematically post federal grant budgets in the TxEIS finance system. With

the exception of the Carl Perkins budget and the TIF Grant, the District did not

budget the No Child Left Behind Title grant programs in either FY 2015-2016 or

2014-2015.

A review of the 2015-2016 federal grants is illustrated below:

A review of the 2014-2015 federal grants is illustrated below:

Recommendation: The Business Manager should take a leadership role in preparing and

posting a budget in the TxEIS finance system for all federal grant funds. In preparing the

budgets, the Business Manager should collaborate with the grant administrator over each

federal grant to ensure that the budget is in compliance with the grant activities included

in the grant application.

Before posting payroll and non-payroll expenditures to the general ledger, a budget

should exist in the TxEIS finance system. More importantly, the budget and expenditures

should be carefully reviewed by both the Business Manager and grant administrator

before all draw-down (reimbursement) requests of federal grant funds.

Federal Grant

Budgeted in

TxEIS

Actual

Expenses

Realized

Revenue

211 - Title I, Part A -$ 252,372$ 93,601$

255 - Title II, Part A -$ 56,375$ 22,421$

263 - Title III, Part A -$ 4,848$ 2,194$

244 - Carl Perkins 21,262$ 6,440$ -$

289 - TIF Grant 439,710$ 320,035$ 118,216$

460,972$ 640,070$ 236,432$

Federal Grant

Budgeted in

TxEIS

Actual

Expenses

Realized

Revenue

211 - Title I, Part A -$ 692,392$ 692,489$

255 - Title II, Part A -$ 86,437$ 86,526$

263 - Title III, Part A -$ 2,194$ 2,194$

244 - Carl Perkins 20,664$ 20,661$ 20,661$

289 - TIF Grant -$ 305,412$ 234,204$

20,664$ 1,107,096$ 1,036,074$


HR & Payroll Management

1. Finding. The District does not have a Compensation Plan other than for Teachers and Stipends for 2015-2016. A pay scale for all District positions is essential to ensure that the salaries are equitable, fair and represent an appropriate salary for the duties and responsibilities. Pay scales are an important tool to determine annual salary increases and the total of cost of salaries and benefits which typically represent 80% -85% of the operating budget. Board Policy DEA (Local) states: The Superintendent shall recommend an annual compensation plan for all District employees. The Board shall review and approve the compensation plan to be used by the District. The Business Manager performs the compensation management duties such as calculating employee salaries. And, the Payroll Clerk/Benefits Specialist enters the salaries in the TxEIS HR/Payroll system.

Recommendation: The District should prepare a Compensation Plan for 2016-2017 to include salary schedules for all District employees. The Board should review and approve the Compensation Plan in accordance with DEA (Local). The Business Manager should take a leadership role in conducting salary surveys to develop the salary schedules. The District’s key administrators should serve as a Salary Committee to evaluate the pay scale structure and placement of each position on the pay scales. As an alternative, the District could contract with an outside entity to perform the Compensation Review. The Texas Association of School Boards provides fee-based Compensation Services to assist districts with designing, implementing and maintaining pay structures.

2. Finding. The District does not have adequate internal controls and segregation of

duties in updating the employee master files in the TxEIS HR/Payroll system. The Secretary to the Superintendent/ Certification Specialist performs most HR functions such as posting vacancies, maintaining employee files, new employee processing, verifying certification status, and other HR duties. However, all new employees are entered in the TxEIS HR/Payroll system by the Payroll Clerk/Benefits Specialist. To safeguard against payroll fraud, the payroll department should not have the capability to add or change employee master files. TEA’s FASRG identifies the recommended segregation of duties among the HR and Payroll functions as noted below: Human Resources:

Documenting employee status, compensation, and benefit records Approving employee status change documents Preparing and updating employee master files


Payroll department: Payroll calculation Preparation of payroll disbursement records Preparation of payroll checks

Recommendation: The District’s TxEIS Security Administrator (Technology Specialist) should ensure that the capability of adding and updating employee master files is restricted to the Secretary to the Superintendent/Certification Specialist role. The Payroll Clerk/Benefits Specialist may be provided “read only” access, but should not have the capability to add or update employee master files. The District should review the job duties of each of these positions to ensure that adequate internal controls and segregation of duties exist in all other areas of HR and Payroll management.

3. Finding. The District is not fully utilizing leave and timekeeping third party software

systems that have interface capabilities with the TxEIS HR/Payroll system. The

current practice of manually entering the data is an inefficient use of the software

systems.

The District implemented the TimeClock Plus (TCP) timekeeping system

approximately eight (8) years ago. At the present time, the District is not interfacing

the timekeeping data to the TxEIS system. The TxEIS system has the capability of

importing the timekeeping data, but the District is manually entering the data in the

TxEIS system.

In 2014-2015, the District implemented the AESOP system, a substitute and leave

management system. The District is only using the software to find a substitute for

the absent professional and para-professional staff. It is not being used to record the

absence of the teacher or generate the payment of the substitute, via an import into the

District’s payroll and leave system (TxEIS Business System). The Payroll

Clerk/Benefits Specialist manually enters the leave and substitute pay in the TxEIS

system.

Recommendation. The payroll department should configure both the TCP and AESOP

systems to export data files to the District’s business system (TxEIS). Interfacing the

exported data would eliminate the redundancy of manual forms for paying substitutes and

manually recording employee absences, substitute pay and timekeeping data.

4. Finding. Supplemental pay to employees for tutoring, after school activities, summer

school, athletic events and other extra duty compensation are handled manually using

either a separate time sheet or form. The forms are submitted to the payroll

department for manual entry into the TxEIS HR/Payroll system even though the


District has a very robust timekeeping system (TCP) capable of capturing and

exporting the data necessary to process the supplemental payments. There is an

ongoing potential for payroll disbursement errors when forms are completed

manually by the originator and subsequently manually entered into the payroll system

by the payroll department.

Recommendation. The payroll department should explore the possibility of utilizing the

timekeeping system to track all extra duties, including teacher extra duty pay for tutoring

and summer school earnings. The District should purchase and install a time clock or

provide for computer-based time clock access at the stadium to facilitate the collection of

timekeeping records for the athletic event staff. Current district staff already set up in

timekeeping system can use the time clock to capture their additional work hours.

A single point of timekeeping for non-exempt employees is critical to ensure compliance

with the Fair Labor Standards Act (FLSA) as it relates to compliance with the Minimum

Wage and Overtime provisions. A single timesheet for non-exempt employees that

includes all of their work hours in any capacity would enable the payroll department to

verify if their work hours in a workweek exceeded the overtime threshold, i.e. 40 hours.

Seasonal workers, if any, that are not otherwise set up in the timekeeping system should

be set up in the system to ensure that their work hours are captured in the timekeeping

system and are in compliance with the FLSA.

5. Finding. The District does not have adequate internal controls and segregation of

duties in submitting the monthly Teacher Retirement System (TRS) reports through

the TRS Reporting and Query System (TRAQS). Submission of the TRS reports

through TRAQS is a two-step process: 1) Submission of reports, and 2) Signature of

reports. The two-step system provides an opportunity for the District to assign one

person the Submission responsibility and another person the Signature responsibility

to create a check and balance system.

The Payroll Clerk/Benefits Specialist prepares the TRS reports using the TxEIS

HR/Payroll system and submits and signs the reports in TRAQS. In addition, the

Payroll Clerk/Benefits Specialist also submits the TRS payment via the Texas

Comptroller Electronic Payment Network (TEXNET).

Recommendation. The Business Manager should develop and implement written

procedures for the creation, submission and signature of the monthly TRS reports. At a

minimum, the procedures should include the separation of the submission and signature

functions. In addition, the procedures should include an administrative approval process

prior to the submission of the TRS payment through TEXNET.


Purchasing

1. Finding. The District has contracted for services to be performed on District

property, such as plumbing or other repair services without requiring a Certificate of

Insurance from the vendors. According to state law, the vendor must provide the

Certificate of Insurance (with the District as additional insured) prior to the start of

any work and only after a purchase order has been approved by the business

department.

The Certificate of Insurance must include the following lines of coverage and limits

and must be with a carrier with at least an “A” rating with A.M. Best.

o Employer’s Liability - $500,000 Each Accident

o Commercial General Liability - $1,000,000 Combined Single Limit.

$500,000 Combined Single Limit Each Occurrence

o Business Automobile Liability - $1,000,000 Combined Single Limit Each

Occurrence (Hired/non-owned coverage, too)

o Workers Compensation – Certificate of insurance, certificate of authority

to self-insure issued by the TDI, or a coverage agreement showing

statutory workers compensation insurance coverage for the person’s or entity’s employees providing services on a project is required for the duration of the project.

o Note: The Commercial General Liability and Business Automobile

Liability limits may be adjusted dependent upon the size, scope and nature

of contract.

The Certificate of Insurance is essential to protect the District against losses due to

general liability, workers’ compensation and auto liability claims.

2. Finding. The District is not consistently using the TxEIS Purchasing module to enter, submit and approve requisitions using the automated system. The automated system provides internal controls related to review and approval of all District purchases by the originator and all staff in the approval path. Some of the District staff is entering on-line requisitions, while others prepare a paper requisition that is forwarded to the business officer for entry in the Purchasing module instead of using the automated system. Consequently, the staff not utilizing the on-line requisition system is unable to manage their operating budgets with real-time, available balances at the point of preparing a requisition. In addition, the District has not consistently complied with the Texas Prompt Payment Act due to purchases that have occurred without a purchase order. Upon receipt of an invoice, without a purchase order, the accounts payable department must


wait until the purchase is substantiated after-the-fact which results in a delayed payment to the vendor. Purchases made without a purchase order constitute unauthorized purchases. Board Policy CH (Local) states: Persons making unauthorized purchases shall assume full responsibility for all such debts.

Recommendation. The District should develop and implement Purchasing Procedures to include purchase order authority, requisition and purchase order processing, non-purchase order purchases, use of District credit cards, competitive procurement, vendor selection, receiving and distribution, and disposal of surplus property. The Purchasing Procedures should be distributed to all District staff responsible for initiating purchases to ensure that they are aware of the procedures and held accountable for compliance with the procedures. Sample Purchasing Procedures are included in the Exhibit Section.

3. Finding. The District has not implemented contract management procedures, nor

established consistency in requiring a written contract for contracted services. According to staff interviews, contracts are not required for contracted services. A written contract is essential to ensure that the District and contractor agree to the scope, term, payment and other specifications.

The contract management procedures should include, but not limited to, the following areas:

Contract approval authority

Contract review process

Compliance with EDGAR contract provisions (applicable to contracts with federal grant funds)

Contract approval

Contract monitoring and retention

Contract payment Without contract management procedures, the District may risk non-compliance with other vendor requirements such as collection of an IRS Form W-9, Conflict of Interest Questionnaire, Felony Conviction Notice, Criminal History (if vendor is dealing with students) and the Certificate of Insurance (noted above in a previous finding). Recommendation. The District should develop and implement contract management and procedures to include all of the areas noted above. The business department should provide training to all District staff that initiate and/or approve purchase commitments for contracted services, especially the staff responsible for managing federal grant funds. Sample Contract Management & Vendor Management Procedures are included in the Exhibit section.


Exhibits

Exhibit 1 Sample Board Report – Monthly Budget Summary

Exhibit 2 Sample Accounts Payable Procedures

Exhibit 3 Sample End-of-Month Close Procedures

Exhibit 4 Sample Cash Management Procedures

Exhibit 5 Sample Fixed Assets Procedures

Exhibit 6 Sample Purchasing Procedures

Exhibit 7 Sample Contract Management Procedures

Exhibit 8 Sample Vendor Management Procedures

Sample ISDGeneral and Food Service Funds

Budget to Actual ReportFor the Period Ended June 30, 2015

(Unaudited Amounts)

Revenues: Budget Received Variance PercentageSource

3000 Fund Balance 577,0175700 Local Sources 153,200 173,155 (19,955) 113.0%5800 State Sources 6,599,446 7,336,751 (737,305) 111.2%5900 Federal Sources 6,060,465 7,934,500 (1,874,035) 130.9%7900 Flow-Thru 99,767 0 99,767 0.0%

Total 13,489,895$ 15,444,406$ (2,531,528)$ 114.5%

Appropriations: Function & Encumbrances

11 Instructional $7,293,041 $5,774,483 $1,518,558 79.2%12 Instructional Resc. 153,447 146,977 $6,470 95.8%13 Curr. & Personnel 703,578 525,794 $177,784 74.7%21 Instructional Serv. 109,433 85,031 $24,402 77.7%23 School Administration 669,834 531,300 $138,534 79.3%31 Guidance & Counseling 636,110 540,516 $95,594 85.0%32 Social Services 0 0 $0 0.0%33 Health Services 173,346 130,062 $43,284 75.0%34 Pupil Transportation 460,285 317,038 $143,247 68.9%35 Food Services 392,549 282,560 $109,989 72.0%36 Co-Curricular 148,647 116,254 $32,393 78.2%41 General Administration 719,275 554,549 $164,726 77.1%51 Plant Maintenance 1,376,751 782,733 $594,018 56.9%52 Security & Monitoring 40,932 25,730 $15,202 62.9%53 Data Processing 243,400 150,735 $92,665 61.9%61 Community Services 6,500 5,867 $633 90.3%71 Debt Services 0 0 $0 0.0%81 Constr. & Acquis. 0 0 $0 0.0%93 Mis. Oper/Flow thru 260,000 134,165 $125,835 51.6%95 JJAEP Tuition Fees 3,000 0 $3,000 0.0%00 Flow-in Funds 99,767 0 $99,767 0.0% Total $13,489,895 $10,103,794 $3,386,101 74.9%

Other Resources & (Uses) 7000 Other Resources $97,767 $97,767 8000 Other Uses ($97,767) 0 ($97,767)

Total $0 $0 $0

Variance -$ $5,340,612Note: Totals may not add due to rounding.

Sample ISD Accounts Payable Procedures

Accounts payable checks should be processed on a weekly basis for release by Friday morning, or earlier dependent upon work schedules or holidays.

General Instructions:

All invoices shall be entered separately into the finance system by invoice number, amount, and date. Note: The invoice number is a “key” record. If entered correctly, the system will not allow a duplicate payment to a vendor.

Payments shall not be made from statements. Upon receipt of an invoice from a vendor, it should be matched with a pending purchase

order [accounts payable copy], and receiving copy [signed by the Data Processing Specialist and/or campus/department]. Note: This constitutes a 3-way match.

If no discrepancies exist, the check payment should be entered into the finance system. If a discount is offered by the vendor for early payment, the payment should be processed

within the allotted time if the goods have been received and their receipt has been verified by the originating campus or department. NOTE: All payments must be paid within 30 days of the invoice (Govt. Code 2251).

All invoices should be checked to ensure that appropriate discounts, bid/quote pricing, terms of shipment, tax exemption, and extensions are correct.

All invoices that do not exceed the purchase order amount by more than $100 [excluding freight charges] may be entered into the finance system for payment without authorization from the Accounting Manager and/or Executive Director of Finance. If funds do not exist in the encumbered account(s), the campus or department shall initiate an Authorization to Exceed PO Amount form with the appropriate account number(s) for the excess payment.

All invoices that exceed the purchase order amount by more than $100 [excluding freight charges] should be forwarded to the Executive Director of Finance for approval. If funds do not exist in the encumbered account(s), the campus or department shall initiate an Authorization to Exceed PO Amount form with the appropriate account number(s) for the excess payment.

All non-purchase order payments [except for travel documents] should be paid via a payment authorization.

The Accounting Manager and/or Executive Director of Finance should approve all payment authorizations.

Recurring invoices such as utilities, monthly rentals, payroll deductions, etc. should be entered into the finance system for payment as noted below: Utilities: A copy of all utility invoices shall be forwarded to the Executive Director of

Operations & Technology for approval. After approval, the invoice(s) shall be entered into the finance system.

Cell phones: All charges shall be reconciled and posted on the spreadsheet to include the payment for each phone by account number and amount.

Copiers: All charges shall be reconciled with meter readings and posted on the spreadsheet.

All petty cash reimbursements should be entered into the finance system for payment. Extenuating circumstances or items of non-compliance, if any, should be forwarded to the Accounting Manager and/or Executive Director of Finance for review and approval.


All invoices or supporting documentation for payments should be stamped “paid” to ensure that duplicate payments do not occur.

All payments should be made from original documents to ensure that duplicate payments do not occur. If payment is made from a copy, the copy shall be stamped “original”.

All check payments should be posted to the general ledger at the time that the checks are printed.

All purchase order encumbrances should be reduced and/or liquidated when check payments are made for the purchase order.

Checks shall not be issued to “Cash” or “Bearer”. At fiscal year-end, the Accounting/Purchasing Specialist shall prepare a report of all

Accounts Payables as of August 31st and submit the report to the Executive Director of Finance by September 15th for audit purposes.

All “paid” check copies should be filed in alpha order by vendor last name or company name.

The Accounting Manager and/or Executive Director of Finance shall pre-approve all “emergency” checks.

Statements from vendors should be reconciled with check payments on file, discrepancies should be researched and resolved, and reconciled statements should be filed for a period of 60 days, and then discarded after the administrative value (AV) period.

All returned purchases should be coordinated by the Accounting/Purchasing Specialist and the Data Processing Specialist: The Data Processing Specialist shall notify the vendor for authorization to return goods. Payment to the vendor for returned purchases should be withheld from the vendor until

replacement items are received that are acceptable to the district All check copies for items returned to the vendor should be kept in a pending file until

receipt of the replacement items. If replacement items are not received within a 60 day period, a demand for a refund

should be forwarded to the vendor. The Executive Director of Finance shall be notified if the vendor has not complied with the 60 day timeline.

Partial shipments should be monitored to ensure that the full shipment is received within a reasonable time period. Partial payments should not be made unless prior arrangements have been made with the vendor.

Disputed invoices shall be

Compliance with State Law:

All payments shall be made in accordance with state law [Govt Code 2251] within 30 days of the later of the following: The date the District received the goods, The date the vendor performed the service or the contract was completed, or The date the District receives the invoice for the goods or services.

Interest shall not be paid on any invoices unless the payment is “overdue” as defined by state law. The interest paid shall not exceed the sum of 1% and the Wall Street Prime Rate (currently 3.25%)

The interest due, if any, shall be paid from local (non-state or non-federal) funds when the invoice is paid. The District shall not request that the vendor waive the interest if the interest is in compliance with state law.


If an invoice is disputed, it must be disputed in writing no later than 15 day after the receipt of the invoice (state law maximum is 21 days).

Verification of Check Transactions:

The Accounting/Purchasing Specialist shall verify that all check transactions meet the following guidelines:

All required approvals are noted on the PO

A 3-way match exists (PO, invoice & receiving)

Proof of receiving - signature on receiving report or electronic signature through receiving system

All items have been received and/or cancelled Partial payment , if allowed, is recorded or tracked The “reason” or “description on the payment is appropriate for the expense

Liquidated amount matches the amount paid

The remaining liquidation is reversed during the final payment (if partial payments are allowed)

Invoices # entered correctly

Invoice Date is after the PO approval date

Vendor remittance address is correct

Account code(s) matches the purchase

Sales tax is not included on invoice

Due date has not passed

Discounts, if any, have been taken Credits, if any, have been taken Freight charges are allowable (refer to Bid or Co-Op purchase terms) on PO Bid or Co-Op prices have not been exceeded on the invoice Invoices are originals (if a copy is used, it should be stamped “original” once it

has been verified that the invoice has not been paid) Late fees, interest charges, etc. have not been charged, unless they have been

researched and are valid Invoices for all contracted services include details regarding the service provided

and the date(s) of service

Travel Payments:

All travel authorizations and settlements should be forwarded to the Accounting Manager and/or Executive Director of Finance for approval.

Meal advances are issued to the traveler no more than 30 days prior to the travel event (IRS Regulations)

Lodging advances/payments do not include non-allowable charges such as taxes, entertainment, room service, etc.

Travel reimbursements must be supported by original receipts and/or settlement form


Mileage advances/payments do not exceed the federal, state, or local maximum rates, whichever is less

Travel advances, if any, are held for travel settlement and/or certification (IRS Regulations)

Construction Payments:

All construction payments to general contractors shall be approved by the Executive Director of Operations & Technology, the Executive Director of Finance and the Superintendent.

All construction payment (for projects funded with federal funds) must have a Davis Bacon Certification.

Credit Card Payments:

All detailed credit card transactions shall be posted to the general ledger (required for state and federal grant fund expenditures)

All credit card charges must be supported with original, detailed receipts All credit card transactions shall be net of all credits and discounts

Administrative Approval of Disbursements:

All invoices that exceed the purchase order amount by more than $100 [excluding freight charges] should be forwarded to the Executive Director of Finance for approval. If funds do not exist in the encumbered account(s), the campus or department shall initiate an Authorization to Exceed PO Amount form with the appropriate account number(s) for the excess payment.

The Executive Director of Finance [or designees: Superintendent or Payroll Director] should approve all payment authorizations.

The Executive Director of Finance [or designees: Superintendent or Payroll Director] shall pre-approve all “emergency” checks.

A check payments report should be forwarded to the Accounting Manager and/or Executive Director of Finance for review and approval. The check payment report shall be accompanied by all payment documentation in alpha order.

After receiving the approved check payment list, the Accounting/Purchasing Specialist may proceed with generating the check payments.

The Executive Director of Finance [or designees: Superintendent or Payroll Director] shall approve all check payments in excess of $50,000 by initialing the physical check prior to release of the check.

Segregation of Duties:

The Data Processing Specialist shall receive a copy of all purchase orders for the purpose of receiving all goods received in the Receiving Area (Administration Building). Note: The District uses a centralized receiving system, i.e. all goods must be received in the Receiving Area and not directly at a campus or department without prior authorization.


All items should be “checked-off” on the receiving report. The vendor shall be promptly notified of any discrepancies.

The quantity of items received shall be entered on the TXEIS receiving system. All checks should be endorsed by the data processing specialist or other staff member. The

signature plates shall be maintained by the Executive Director of Finance. A jump drive (containing encrypted signatures of the Board President and Secretary) shall be maintained by the data processing specialist and the Executive Director of Finance. Note: At no time shall the Accounting/Purchasing Specialist have access to the endorsement signatures. The Data Processing Specialist and Accounting/Purchasing Specialist shall verify that all

checks have two (2) board signatures prior to releasing the checks to vendors. The Data Processing Specialist shall verify that all checks are placement in the mail. The Accounting/Purchasing Specialist shall reconcile all bank accounts with the general

ledger using the on-line banking system. The “sealed” bank statements shall be delivered to and opened by the Executive Director of Finance. The Executive Director of Finance shall review and approve all bank reconciliations. Endorsements on cleared checks should be checked on a periodic basis or at least for

those items that appear suspect.

Control Environment:

The Accounting/Purchasing Specialist shall ensure that all check stock shall be maintained in a locked cabinet or room and shall be inventoried for the purpose of restocking when less than a two (2) month supply of checks is on hand.

The Executive Director of Finance shall notify the depository bank when new signature cards are necessary due to a change in authorized signers.

The Data Processing Specialist shall maintain a log of all checks endorsed. The Accounting/Purchasing Specialist shall ensure that all vendor statements are compared

to historical vendor payments using a vendor check inquiry. Verified statements shall be filed throughout the fiscal year and filed at year end according to the Records Retention Schedule.

All vendor files shall be filed by vendor name in alpha order (Individual names shall be filed by surname). “File Out” cards shall be used when check copies are removed from the files. NOTE: Alternate colored copies of checks shall be filed to ensure that checks are maintained in the appropriate fiscal year files.

All “stop payments” shall be authorized by the Executive Director of Finance. All “void” checks shall be approved by the Executive Director of Finance and filed in a

separate file in check number order. All vendor refunds shall be deposited to the original expense account via a journal form. The

Executive Director of Finance shall approve all journal forms. The Accounting/Purchasing Specialist shall generate an Aged Purchase Order report by the

5th day of the following month. All aged POs should be researched to determine if the goods have not been received, not paid for, or the expense has not been liquidated.

The Executive Director of Finance shall monitor the pending invoices and purchase orders work files to ensure that unmatched document are resolved on a timely basis.

Sample ISD – Finance End of Month Procedures

The Finance End of Month (EOM) should be processed within 15 days after the end of each month, or earlier dependent upon work schedules or holidays.

General Instructions:

The finance End-of-Month (EOM) process posts all current month transaction to the year-to-date transaction file. Only two (2) months may be open at one time, typically the current month and either the past month or the next month. The EOM process shall start on the 1st business day of the next month and shall be completed by the 15th day of the following month, or earlier as appropriate. The EOM process has been divided into four (4) major steps. Each step is listed below with the tasks that must be accomplished at each step.

Step 1 – Reconciliation of Bank Accounts: On the 1st business day of the following month, the Accounting/Purchasing Specialist shall retrieve all bank statements through the on-line banking system (Cash Pro-Online).

The Accounting/Purchasing Specialist shall utilize the finance system bank reconciliation program to reconcile all bank statements to the general ledger. All deposits and checks shall be cleared in the bank reconciliation system and the resulting report with cleared and outstanding checks used to reconcile all bank accounts with the general ledger (system cash). [NOTE: The Accounting/Purchasing Specialist shall clear deposits and checks on a daily basis with a current day or previous day report; therefore, the bank reconciliation system and the bank statement should match by the end of the month.

The Accounting/Purchasing Specialist shall utilize the Bank Reconciliation Worksheet (Excel) to ensure that all debits, credits, and cleared checks on the bank statement and bank reconciliation system match.

If the Accounting/Purchasing Specialist is unable to readily reconcile the bank statements, a detailed general ledger [for the month being closed] for all cash accounts (1111) shall be printed and verified for accuracy.

Within two (2) business days, the Accounting/Purchasing Specialist shall reconcile all bank statements with the general ledger.

The Accounting Manager and/or Executive Director of Finance should approve all finalized bank reconciliations.

The approved bank reconciliations, and supporting documents shall be filed for audit purposes by month/fiscal year.

Step 2 – EOM Activities (After reconciling all bank statements):

The Accounting/Purchasing Specialist shall verify that all transactions for the prior month have been posted to the general ledger, to include: General Journals (Budget, Actual, Cash Receipts, etc.).


The Accounting/Purchasing Specialist shall ensure that all General Journals for the prior month have been filed in the appropriate notebook by month and JV number. Missing JVs, if any, shall be located and filed in the notebook.

The Accounting/Purchasing Specialist shall generate and print all Step 2 EOM Reports (reports may be printed to a PDF and filed by month/fiscal year). If changes/corrections are made to the reports, a corrected report shall be generated, printed and filed for audit purposes.

The Accounting/Purchasing Specialist shall review and distribute reports as noted below:

Cash Receipt Journal – verify that all cash receipts are in balance and that all transaction dates are correct for the month being closed – File report

Encumbrance Journal – verify that all encumbrances are in balance and that all transaction dates are correct for the month being closed – File report

Expenditure & Liquidation Journal – verify that all paid purchase orders have been fully liquidated, or if a partial payment was made, that the remaining liquidated is correct for the pending payment – File report

Check Register – verify that the check numbers are in numeric sequence by bank account type, check dates are all correct for the month being closed, and that void checks if any are posted – File report

Check Payments List – verify that all checks have an invoice number and reason for the check – File report and extract to Excel (NOTE: The Excel file shall include the check date, vendor name, account code, reason and amount only – forward the Excel file to the Executive Director of Finance for School Board review and approval.)

Batch Process Balance Error Listing – verify that no accounts are listed as out of balance – File report

Outstanding Purchase Orders – verify that outstanding purchase orders are not aged (older than 60 days), the balance matches the original amount unless a partial payment has been made on the purchase order, and that the Accounts Payable pending purchase order files contain a copy of all outstanding purchase orders – File report and forward a copy to the Receiving Clerk for reconciliation of pending receiving reports.

Aged Purchase Orders – research all purchase orders that are over 60 days old – File report and forward a copy to the Receiving Clerk for research of the aged purchase orders. NOTE: The Accounting/Purchasing Specialist shall contact the vendors if the goods/services have not been received which could indicate that the vendor either has not shipped the goods and/or never received a copy of the purchase order.

Outstanding Credit Memos – verify that there are no outstanding credit memos at the end of the month, if there are any credit memos, the credit shall taken during the next payment to the vendor. If an aged (over 60 days) credit memo exists, the vendor shall be contacted to request a check in the amount of the outstanding credit memo – File report

Board Reports Combined – verify that the report is the month being closed and that all funds are included in the report – File report and forward a PDF of the report to the Executive Director of Finance.

Board Reports Recap - verify that the report is the month being closed and that only funds 19X and 240 are included in the report – File report and forward a PDF of the report to the Executive Director of Finance.

Fixed Asset Report – verify that all account codes for fixed assets/inventory are within the 66XX object code – File report and forward a copy to the Data Processing Specialist.


Summary General Ledger – print and forward to the Executive Director of Finance for review. NOTE: The Executive Director of Finance shall review the report for accuracy and notify the Accounting/Purchasing Specialist when the EOM is ready for close.

Step 3 – Run EOM Reports: The Accounting/Purchasing Specialist shall verify that all transactions for the prior month have been posted to the general ledger, to include: General Journals (Budget, Actual, Cash Receipts, etc.). NOTE: No additional posting to the general ledger for the month being closed may be posted to that month.

The Accounting/Purchasing Specialist shall generate and print all Step 3 EOM Reports Prior to Closing EOM (reports may be printed to a PDF and filed by month/fiscal year). All reports shall be filed for audit purposes.

Step 4 – Process EOM Close: The Accounting/Purchasing Specialist shall backup the finance files for the month being closed and save the backup to the appropriate EOM back-up folder.

The Accounting/Purchasing Specialist shall process the EOM after verifying that the Year and Month of Accounting Period Being Closed are correct as noted on the screen.

The Accounting/Purchasing Specialist shall update the Finance Tables on the 1st day of the following month – this includes the Next Month, Purchasing, and Accounts Receivable accounting periods. NOTE: No transactions for the following month shall be posted to the general ledger until the accounting periods have been changed.

After processing the EOM close, the Accounting/Purchasing Specialist shall generate a YTD Check Register to verify that the checks for the month being closed have been posted to the year-to-date transaction file. NOTE: If the checks for the month being closed are not included in the YTD Check Register, it may indicate that the EOM process was not successful.

Sample ISD – Finance EOM Checklist

FINANCE END OF MONTH REPORTS CHECKLIST

MONTH_______________ YEAR____________

RUN THE FOLLOWING REPORTS:

STEP 1: RECONCILE BANK ACCOUNTS (1ST Business Day of next month) _____ GENERAL LEDGER INQUIRY (ALL CASH ACCTS – 1111)

_____ GENERAL FUND

_____ STUDENT ACTIVITY FUND

_____ CAPITAL FUND

STEP 2: EOM ACTIVITIES (After reconciling all bank accounts) _____ FIN1000 – CASH RECEIPTS JOURNAL

_____ FIN1100 – ENCUMBRANCE JOURNAL

_____ FIN1050 – EXPENDITURE/LIQUIDATION JOURNAL

_____ FIN1200 – CAPITAL OUTLAY (COPY TO DP SPECIALIST)

_____ FIN1250 – CHECK REGISTER

_____ FIN1300 – CHECK PAYMENT LIST (EMAIL TO EXEC DIRECTOR IN EXCEL)

_____ FIN1600 – BATCH PROCESS BALANCE ERROR LISTING (VERIFY ACCTS ARE IN BALANCE)

_____ FIN2150 – OUTSTANDING PURCHASE ORDER LISTING

_____ FIN2200 – AGED PURCHASE ORDERS (PRINT & RESEARCH OVER 60 DAYS)

_____ FIN2300 – OUTSTANDING CREDIT MEMOS (RESEARCH OVER 30 DAYS)

_____ FIN3051 – BOARD REPORTS COMBINED (ALL FUND) (EMAIL TO EXEC DIRECTOR IN PDF)

_____ FIN3051 – BOARD REPORTS RECAP FUNDS 195, 199, 240 (EMAIL TO EXEC DIRECTOR)

_____ FIN4000 – CAPITAL OUTLAY (FIXED ASSETS) REPORT (COPY TO DP SPECIALIST)

_____ FIN3000 – SUMMARY GENERAL LEDGER (BY FUND - ALL FUNDS)

STEP 3: RUN EOM REPORTS PRIOR CLOSING EOM _____ FIN1150 – GENERAL JOURNAL (BY FUND - ALL FUNDS)

_____ FIN1400 – DETAIL GENERAL LEDGER (BY FUND - ALL FUNDS)

_____ FIN1600 – BATCH PROCESS BALANCE ERROR LISTING (VERIFY ACCTS ARE IN BALANCE)

STEP 4: CLOSE EOM _____ BACKUP

_____ UTILITIES: EOM CLOSING

_____ FINANCE TABLE UPDATES: CHANGE ACCOUNT PERIODS ON THE 1ST DAY OF THE

FOLLOWING MONTH

_____ NEXT ACCOUNT PERIOD

_____ PURCHASING

_____ ACCOUNTS RECEIVABLE

_____ FIN 1800 – YTD CHECK REGISTER

EOM Processed by: __________________________ Date: __________________

(Siignature)

Sample ISD

Cash Management Procedures

2014-2015 Page 1

Purpose: The District receives cash and checks from many sources. These procedures are designed to ensure that all cash received by the District and its employees are deposited and tracked for the benefit of the District and its students. Adherence to these procedures is essential to mitigate fraud. General Cash Management Guidelines No post-dated checks should be accepted. Funds should not be kept in classrooms, personal wallets or purses, or at home for extended periods of time. No cash purchases should be made – every dollar collected should be receipted and deposited according to the collection procedures. Personal employee checks shall not be cashed from monies collected at the campus or district level to ensure an adequate audit trail of all funds collected by the district. Cash of different types shall not be commingled. A separate cash box shall be maintained for Change Accounts, Petty Cash and funds pending deposit (collections). All change and petty cash accounts shall be in balance every day. For example, the cash and/or receipts in a $350 petty cash account must equal $350 at all times and shall be subject to audit on a random basis. Staff is strictly prohibited from “borrowing” from district funds. Staff who borrow (defined as temporarily removing of funds with the intent to return the funds) or steal district funds shall be subject to disciplinary action, up to and including termination of employment. Receipt of Cash or Cash Equivalents All cash and checks received from campuses and departments should be counted, receipted, and prepared for bank deposit by the data processing specialist on a daily basis. The bank deposit confirmation receipt shall serve as the official documentation of all cash collected. The audit trail for all deposits shall include the single receipts, Athletic or Ticketed Event Form, Concession Stand Sales Tally and Reconciliation Form, and/or Activity Account Daily Collections Report that support the deposit. General Receipt Issuance Guidelines The flow of money and the receipts must support all money collected and deposited. All receipts issued shall follow the following guidelines:

An official receipt book with pre-numbered, bound receipts in triplicate Both parties to the money exchange should be present when the money is counted &

receipted A copy of the receipt must be given to the person paying (sponsor) – Original Copy A copy of the receipt must remain in the receipt book A copy of the receipt should be attached to the deposit documentation

Sample ISD


2014-2015 Page 2

Receipts should not be altered Voided receipts (white original copy) must be re-attached to the receipt book Receipts are not to be pre-dated or pre-signed Receipt numbers must be used consecutively

A copy of receipts or the appropriate form shall move with the funds. Sample Receipt

At a minimum, the following items must be completed on a pre-numbered receipt.

Date – the date the money was received Received from – Payee - the full name of the person paying the money (Address is

optional – this field can be used to indicate of the payee is a student or parent.) Dollars – the actual amount collected in dollars and cents For – the reason for the payment (Note. This is essential to ensure that the correct

campus, department, student organization, etc. receives credit for the funds.) How Paid – the type of funds received is essential to track cash and checks on the bank

statement By – the signature (original – no stamps) of the person receiving the money

Date money was received

Fundraiser, lost or damaged items, fines, or other payments

Signature of person receiving money

Sample ISD


2014-2015 Page 3

Collection Procedures Collected by Teachers

Cash and checks collected by teachers for student field trips or fees shall be reported on an Activity Account Daily Collections Report. The Activity Account Daily Collections Report shall include the date received, amount received, student name, and purpose of funds collected. If payments were received from students for items such as entry fees, tickets, etc., the

name of the student and amount collected should be reported on the form. For sales of items, such as candy, ice cream, or other small items, the item(s) sold and

the amount collected should be reported on the form. By the end of each day, teachers shall submit the funds collected with a copy of the

Activity Account Daily Collections Report to the Principal’s Secretary. Both the teacher and Principal’s Secretary shall count the funds to ensure that the amount

is verified prior to the issuance of a receipt from the Principal’s Secretary to the teacher. Teachers shall maintain a copy of the receipt received from the Principal’s Secretary for

their own records. Collected by Activity Account Sponsors (Including Fundraising)

Cash and checks collected by activity account sponsors for student trips, club fees and fundraising shall be reported on a receipt or Activity Account Daily Collections Report. The Activity Account Daily Collections Report shall include the date received, amount received, student name, and purpose of funds collected.

Prior to collecting cash from fundraising activities, the sponsor shall have an approved Authorization to Conduct a Fundraiser form (approved by the Campus Principal) on file with the Principal’s Secretary.

The activity account sponsor shall issue a receipt for all collections that exceed $5.00 per payment. Payments less than $5.00 shall be recorded on an Activity Account Daily Collections Report. The Activity Account Daily Collections Report shall include the date received, amount received, student name, and purpose of funds collected. If a receipt book is used, it must be a bound, pre-numbered receipt book with

triplicate copies shall be used. The original copy shall be given to the payee, the 2nd copy shall move with the money, and the third copy shall remain in the receipt book for audit purposes.

By the end of each day, activity account sponsors shall submit the funds collected with a copy of the receipt or Activity Account Daily Collections Report to the Principal’s Secretary. The receipts and/or Activity Account Daily Collections Report shall indicate the purpose of the funds, i.e. club fees, fundraising, etc.

Both the activity account sponsor and Principal’s Secretary shall count the funds to ensure that the amount is verified prior to the issuance of a receipt from the Principal’s Secretary to the teacher.

Activity account sponsors shall maintain a copy of the receipt received from the Principal’s Secretary for their own records.

Sample ISD


2014-2015 Page 4

Collected by Activity Account Sponsors (Concessions)

Cash and checks collected by activity account sponsors for concession sales shall be reported on a Concession Stand Sales and Reconciliation Form.

The activity account sponsors shall complete the Concession Stand Sales and Reconciliation Form and submit to the Principal’s Secretary with the cash collected on the same day of the event, as appropriate.

If the concession sales are after hours, the activity account sponsor may submit the cash and Concession Stand Sales and Reconciliation Form to the Principal’s Secretary on the next business day. The cash must be secured overnight in a locked safe.

Both the activity account sponsor and Principal’s Secretary shall count the funds to ensure that the amount is verified at the time the funds are submitted to the Principal’s Secretary.

The Principal’s Secretary shall forward the Concession Stand Sales and Reconciliation Form and cash to the district Accounts Receivable Clerk for deposit.

The Stacey Campus shall have a Change Account in the amount of $30 for concession sales.

Collected by Athletic or Other Ticketed Events

Cash and checks collected for Athletic or Other Ticketed Events [plays, concerts, dances, etc.) shall be reported on an Athletic Gate Receipts Form, Ticketed Events Form, or individual receipts, as appropriate for the event. The forms shall include the starting and ending ticket numbers for adults and students.

The tickets taker shall complete the Athletic Gate Receipts Form, Ticketed Events Form, or individual receipts, as appropriate for the event and submit to the Principal’s Secretary with the cash collected on the same day of the event, as appropriate.

If the event is after hours, the ticket taker may submit the cash and appropriate form or receipts to the Principal’s Secretary on the next business day. The cash must be secured overnight in a locked safe or cabinet.

Both the ticket taker and Principal’s Secretary shall count the funds to ensure that the amount is verified at the time the funds are submitted to the Principal’s Secretary.

The Principal’s Secretary shall forward the Athletic Gate Receipts Form, Ticketed Events Form, or individual receipts, as appropriate for the event and cash to the district Accounts Receivable Clerk for deposit.

The Athletic Department shall have a Change Account in the amount of $100. Collected by Principal’s Secretary (Including Campus Fundraising)

Cash and checks collected by the Principal’s Secretary for student trips, club fees and fundraising shall be reported on a receipt or Activity Account Daily Collections Report. The Activity Account Daily Collections Report shall include the date received, amount received, student name, and purpose of funds collected.

Collections by the Principal’s Secretary may include:

Sample ISD


2014-2015 Page 5

Lost textbooks Damage to campus supplies, equipment, facilities, etc. Campus fundraisers Lost or damage to technology devices such as i-Pads, laptops, computers, etc.

Prior to collecting cash from fundraising activities, the campus shall have an approved Approval to Conduct a Fundraiser Form (approved by the Campus Principal) on file with the Principal’s Secretary.

The Principal’s Secretary shall issue a receipt for all collections that exceed $5.00 per payment. Payments less than $5.00 shall be recorded on an Activity Account Daily Collections Report. The Activity Account Daily Collections Report shall include the date received, amount received, student name, and purpose of funds collected. If a receipt book is used, it must be a bound, pre-numbered receipt book with


By the end of each day, Principal’s Secretary shall submit the funds collected with a copy of the receipt or Activity Account Daily Collections Report to the district Accounts Receivable Clerk. The receipts and/or Activity Account Daily Collections Report shall indicate the purpose of the funds, i.e. club fees, fundraising, etc.

Both the activity account sponsor and Principal’s Secretary shall count the funds to ensure that the amount is verified prior to the issuance of a receipt from the Principal’s Secretary to the teacher.

Activity account sponsors shall maintain a copy of the receipt received from the Principal’s Secretary for their own records.

A district-issued locking money bag shall be used to transfer the funds from the food service department to the district office. The bag shall be locked prior to delivering the bag to the Accounts Receivable Clerk.

Collected by Food Service Department - Cashiers

Cash and checks collected by a Food Service Department cashier may include the following: Student payments for daily meals, a la carte purchases and pre-paid meal account

funds Adult payments from District staff for daily meals, a la carte sales and pre-paid meal

account funds Adult payments from non-employees for daily meals or a la carte purchases.

The Food Service cashier(s) post all cash collections to the automated system, Systems Design.

By the end of each day, the Food Service Department cashier shall reconcile the cash collected with the System Design Daily Summary Report and submit the collections report to the Food Service Director for approval. After approval, the Food Service cashier(s) shall forward the cash and System Design Daily Summary Report to the Accounts Receivable Clerk (DP Specialist).

Sample ISD


2014-2015 Page 6

Deposits which cannot be made on the same day shall be stored in a food service department locked safe or cabinet until such time as the deposit can be made.

A district-issued locking money bag shall be used to transfer the funds from the food service department to the district office. The bag shall be locked prior to delivering the bag to the Accounts Receivable Clerk.

The Food Service Department cashier shall maintain a copy of the receipt received from the Accounts Receivable Clerk with the campus records.

The Food Service Department shall have a Change Account in the amount of $160 (combined for both schools).

Collected by Media Center Library Specialist

Cash and checks collected by the Library Specialist may include the following: Payments for library books, library fines and damages to library books. Payments for lost or damaged kindles.

The Library Specialist shall issue a receipt for all collections that exceed $5.00 per payment. Payments less than $5.00 shall be recorded on an Activity Account Daily Collections Report. The Activity Account Daily Collections Report shall include the date received, amount received, student name, and purpose of funds collected. The receipt issued may be from the library automation software (Follett) provided that the date of the payment, payment amount, student name and purpose of the funds is included in the receipt. If a receipt book is used, it must be a bound, pre-numbered receipt book with


By the end of each day, the Library Specialist shall submit the funds collected with a copy of the Activity Account Daily Collections Report and/or single receipts to the Accounts Receivable Clerk (DP Specialist).

Deposits which cannot be made on the same day shall be stored in a Media Center safe until such time as the deposit can be made.

A district-issued locking money bag shall be used to transfer the funds from the campus to the district office. The bag shall be locked prior to delivering the bag or sending the bag with the district courier to the Accounts Receivable Clerk.

The Library Specialist shall maintain a copy of the receipt received from the Accounts Receivable Clerk with the campus records.

The Media Center shall have a Change Account in the amount of $30. Collected by Accounts Receivable Clerk

Cash and checks collected by a Accounts Receivable Clerk may include the following: Student payments (during the summer months) for lost textbooks, damages to

property and other related collections Staff reimbursements of travel funds Donations from external sources

Sample ISD


2014-2015 Page 7

Other miscellaneous checks from vendors Deposits from a campus, food service department, or the media center

The Accounts Receivable Clerk shall issue a receipt for all collections that exceed $5.00 per payment. Payments less than $5.00 shall be recorded on an Activity Account Daily Collections Report. The Activity Account Daily Collections Report shall include the date received, amount received, student name, and purpose of funds collected. If a receipt book is used, it must be a bound, pre-numbered receipt book with


All checks shall be stamped upon receipt for endorsement purposes. By the end of each day, the Accounts Receivable Clerk shall prepare all funds for deposit

to the District’s depository bank (Bank of America) no later than 2:00 pm for pick up by the district courier.

All funds shall be sealed in a secure money bag. The tracking number for the money bag shall be attached to the deposit supporting documentation.

Deposits which cannot be made on the same day shall be stored in the business office safe until such time as the deposit can be made.

The bank deposit supporting documentation should be forwarded to the Accounting/Purchasing Specialist for posting to the general ledger and bank reconciliation purposes.

All supporting documents for the bank deposits should be forwarded to and maintained by the Accounting/Purchasing for audit purposes.

Transport of Deposits to the Bank – District Courier The district courier should deliver all deposits to the bank branch on LAFB in a secure

money bag. The district courier must wait for the deposit to be processed and a deposit confirmation

receipt issued by the teller. The deposit confirmation receipt shall be forward to the Accounting/Purchasing Specialist. Posting of Deposits, Withdrawals and Transfers – Accounting/Purchasing Specialist Notices of checks which were not deposited due to “insufficient funds” shall be received by

and processed by the Accounting/Purchasing Specialist. A form letter should be prepared and sent by the Accounting/Purchasing Specialist to all

makers of rejected checks. The established fee for rejected checks shall be noted on the form letter.

A JV or Cash Receipt Reversal shall be prepared by the Accounting/Purchasing Specialist to record the returned deposit. After approval of the JV by the Executive Director of Finance, the Accounting/Purchasing Specialist shall record the receivable to the general ledger.

All cash transfers between cash and investment accounts shall be initiated by an investment officer and posted by the Accounting/Purchasing Specialist. Deposits from investment

Sample ISD


2014-2015 Page 8

accounts shall be posted as cash receipts journals. Withdrawals from investment accounts shall be posted as general journal vouchers.

All other cash withdrawals from a bank account such as ACHs or wire transfers shall be initiated by the Executive Director of Finance or Director of Payroll & Benefits and posted to the general ledger by the Accounting/Purchasing Specialist.

All electronic deposits to the bank accounts, such as state aid or impact aid payments, shall be coded by the Executive Director of Finance and posted to the general ledger on a monthly basis by the Accounting/Purchasing Specialist. Clarifications, if needed, on the appropriate revenue codes shall be forwarded to the Executive Director of Finance.

All recurring miscellaneous revenue, such as vending commissions, shall be forwarded to the Accounts Receivable Clerk for receipting and depositing purposes. The Accounting/Purchasing Specialist shall post the deposits to the general ledger. Clarifications, if needed, on the appropriate revenue codes shall be forwarded to the Accounting Manager and/or Executive Director of Finance.

All travel reimbursements to the district shall be submitted to the respective campus by the traveler, and then forwarded by the Principal’s Secretary to the data processing specialist for receipting and depositing purposes. The Accounting/Purchasing Specialist shall post the deposits to the general ledger. Clarifications, if needed, on the appropriate revenue codes shall be forwarded to the Executive Director of Finance.

Monitoring Available Cash – Accounting/Purchasing Specialist A Daily Available Cash Balance Report shall be prepared by the Accounting/Purchasing

Specialist and submitted to the Executive Director of Finance for review no later than 9:00 am on a daily basis (via email). An investment officer shall transfer out excess cash to an investment account An investment officer shall transfer in sufficient funds to meet cash shortfalls prior to the

disbursement of payroll and/or accounts payable disbursements. The Accounting/Purchasing Specialist shall maintain a High Cash Balance Report every

month. The report shall reflect the highest cash balance during each month and the cash balance at the EOM. The High Cash Balance Report (spreadsheet) shall be forwarded to the Executive

Director of Finance by September 15th for audit purposes. The Executive Director of Finance shall verify that the district’s deposited funds are fully

collateralized at all times in accordance with state law.

SAMPLE INDEPENDENT SCHOOL DISTRICT PROCEDURES:

Fixed Asset Tracking

Procedures: Fixed Asset Tracking

October 2014 Page 1

Goal: An up-to-date inventory of all equipment, vehicles, and buildings with a unit value greater than $5,000 shall be maintained for audit purposes. In addition, an up-to-date inventory of all equipment with a unit value between $1,000 and $5,000 shall be maintained for insurance purposes by the business department. An inventory of other small equipment shall be tracked by the respective campus or department. Fixed Asset Functions: The Data Processing Specialist shall maintain an up-to-date database of all fixed assets and inventory

items. The database shall include the following information, at a minimum:

A description of the equipment Serial number or other ID Funding source Who holds title Original acquisition date Original cost Percent of federal participation Location Use and condition Disposition date

Upon receipt of a Fixed Asset/Inventory Transfer form, the Data Processing Specialist shall post the change to the database and file the form for audit purposes.

All items transferred to the Warehouse as surplus or salvage shall be tracked on the database. A list of all salvage items shall be submitted to the Superintendent for approval prior to a

public sale or auction. The signed list shall be maintained for audit purposes. All items sold via a public sale, auction, or disposal shall be removed from the fixed assets

database. Fixed Asset Transfer Form A Fixed Asset/Inventory transfer form is required whenever equipment is moved from one location to another. This shall include one classroom to another, one campus to another, or from a location to the warehouse. No equipment shall be stored at a facility other than the warehouse, except for a specific project such as the Computer Re-Invest project. Procedures:

o Campus or department completes the form to move equipment o If the equipment to be moved is technology or audio visual related, the Director of Technology

should approve the transfer before processing the transfer form o Forms should be submitted to the Data Processing Specialist for review.

o If the equipment is audio visual or technology, the form should be routed to the Executive Director of Operations and Technology for his approval. After the Director of




October 2014 Page 2

Technology’s approval, the form should be routed to the Technology Technician for movement of the equipment as approved.

o If the equipment is moving within the campuses, the form should be routed to the Custodial Supervisor for movement of the equipment.

o If the equipment is moving to the warehouse, the form should be routed to the Director of Maintenance for his approval. Andy shall coordinate the movement of the equipment as approved.

o After the items have been moved the appropriate individual shall submit the completed form to the Data Processing Specialist

o The Data Processing Specialist will input all transfers on the Fixed Asset Management system o The Data Processing Specialist will maintain 2 separate inventories for warehouse items: storage

(that will be reassigned as requested) and surplus (that will be sold or discarded) o The Director of Maintenance will submit a transfer form to the Executive Director of Finance for

all items recommended to be discarded. After the Superintendent’s approval, the Executive Director of Finance will forward a copy to the Data Processing Specialist for posting and a copy to the Director of Maintenance for discarding purposes. Under transfer to “trash” should be noted

o A transfer form shall be completed when items from storage are moved to a campus/department. The individual requesting the items shall complete the transfer form and follow the steps as noted above starting with the submission to Betty.

Monthly Reconciliation: Fixed (Capital) Assets (C) shall be defined as: All equipment with a unit cost over $5000 (account

codes 663X) should be tagged, posted in the Fixed Asset System and posted to the general ledger. These items are defined as fixed assets for audit purposes. These assets are also tracked on a spreadsheet for the purpose of calculating the annual depreciation expense.

Inventory (I) shall be defined as: All equipment with a unit cost over $1,000 should be tagged and posted in the Fixed Asset System for inventory purposes.

Other small equipment shall be defined as: All equipment defined as “personal use items” such as laptops, I-Pad, digital cameras, calculators, etc. with a unit cost between $500 and $1,000 shall be tracked by the respective campus or department. The campuses and media center have opted to use the Library Automation software

(Follett) to track and issue the small equipment to students and/or staff. The technology, maintenance, food service, custodial and transportation departments have

opted to use the Fixed Assets Module in TxEIS to track small equipment such as tools, small equipment, etc.

All inventory and fixed asset items shall be tagged by the Data Processing Specialist upon receipt before delivery to the campus or department.

A capital outlay report shall be generated at the end of each month by the Accounting/Purchasing Specialist and provided to the Data Processing Specialist for reconciliation.

All items on the capital outlay report shall be reconciled with the new inventory and fixed asset items tagged during the month. The total 663X expenditures should be added to the fixed asset system and general ledger. The total 664X expenditures should be added to the fixed asset inventory system.

The Data Processing Specialist shall prepare all Application for Vehicle, Title, and License Plate forms for all new vehicles purchased by the district. The forms shall be submitted to the Executive




October 2014 Page 3

Director of Finance for approval and signature of all forms. [The Application for Vehicle Registration, Titles, and License Plate procedures shall be followed in securing the documents.] The Executive Director of Finance shall submit the forms to the Bexar County Tax Office for

processing. The Executive Director of Finance shall notify the auto insurance carrier of the new vehicles.

All construction expenditures should be recorded on a spreadsheet by project. The total 6629 expenditures should be added to the fixed asset system and general ledger.

All inventory and fixed asset relocation forms received from campuses and departments shall be entered in the fixed asset system upon receipt.

All inventory or fixed asset items purchased with federal grants should be tagged and the appropriate federal grant indicated on the item.

The disposal of assets via surplus sales, stolen, or lost assets shall be recorded in the fixed asset system.

The inventory and fixed asset schedules maintained in the fixed asset system should be used to purchase property and casualty insurance.

Annual Reconciliation: Annually, by April 1st, a list [sorted by room #] of all inventory and fixed asset items should be sent

to each campus and department for reconciliation purposes. The reconciliation process should be complete by May 1st, and all changes posted on the fixed asset

system soon thereafter. All discrepancies and/or missing items should be compiled in a summary report and forwarded to the

appropriate campus and/or department administrators. The staff members (teachers) should not be released for the summer until all missing items have been

accounted for. A list of all fixed assets (over $5000 unit cost) should be prepared by September 15th for audit

purposes. A list of all construction assets should be prepared by September 15th for audit purposes. The list

should include all “construction in-progress” through August 31st, including accounts payables and retainage.

The lists should be reconciled with the general ledger and submitted to the Executive Director of Finance.

The fixed asset depreciation schedules and spreadsheet should be prepared by September 15th and submitted to the Executive Director of Finance for audit purposes.

Fixed Asset Disposal: All efforts will be made to obtain the best return value to Lackland ISD and consideration will be

made to responsible protection of our environment. Lackland ISD identification will be removed from items as part of the sales process. Any items that

might contain data or any association with Lackland ISD will be cleared or disposed of in a manner that ensures the data is destroyed (example: hard drives will not be sold, but would be destroyed to prevent any possible data recovery).

The follow 3 steps would be the method of disposal. [Exception for federally funded assets below] Garage type sale. Generally standard items will have a sale price establish on the disposal list

that will serve as the garage sale price. Other unique items will have a starting minimum price as established on the disposal list, but will be sold on a silent auction basis.




October 2014 Page 4

Two types of items will be identified – standard and unique. Preset prices will be established for “standard” item as shown on the approved

disposal list. A few items will be marked as “unique” and will be sold using a silent bid format with the last and highest bid being the sales price as long as it exceeds the minimum value.

The unique items sale price will be the last highest price as reflected on the item bid sheet at the close of the sales day.

Employees have a preview to see what is for sale and to identify items that may have some instructional value for re-use in their classrooms and/or offices

Employee pre-sale sale 1 day prior to the public sale Public sale for a designated period of time All prices on standard items, as posted on the disposal list, will be in effect until 1

hour prior to the close of the sale at which time the prices may be reduced by 50%. Unsold items that are suitable for sale shall be retained in storage for the next surplus

sale. Recycling. Items that are not sold during the garage sale will be disposed through recycling if

possible. Trash – Items that are not disposed of through recycling will be considered trash and disposed

of as trash.

All surplus sales shall be advertised via email and the Talespinner, as appropriate. All items disposed of shall be removed from the FAMP system by the Data Processing Specialist. The Data Processing Specialist shall reconcile and deposit all monies collected at the surplus

sale. All surplus revenue shall be deposited to a miscellaneous revenue account in the General

Fund (199), with the exception of surplus revenue from the sale of Food Service equipment which shall be deposited to the Food Service Fund (240).

Use of Federally Funded Assets: All federally funded equipment shall be used, as long as needed, for the original grant project,

whether or not the project continues to be federally funded. Assets shall be made available for other projects as long as the use does not interfere with the project

under which it was originally acquired (it may be appropriate to split or share the costs of the equipment with other fund sources so that each program bears its fair share).

When no longer needed for the original grant project, equipment may be used in other federally supported activities (if purchased with state funds, would be used in another state program).

Disposal of Federally Funded Assets:

When equipment is no longer needed for the original project or another federally funded project, Lackland ISD shall dispose of the equipment in the following manner:

o Equipment with current fair market value of less than $5,000 may be retained, sold, or otherwise disposed of with no further obligations to TEA.

o Equipment with current fair market value of $5,000 or more may be retained or sold but TEA shall have right to the proceeds.

TEA reserves the right to transfer title to another grantee for noncompliance or as needed after the project ends (regardless of how equipment is classified).




October 2014 Page 5

At the conclusion of a local grant project, TEA may request a list of equipment purchased with grant funds. The grantee must request disposition instructions from TEA. For most TEA discretionary grants, if a local project is ending and the grantee no longer needs equipment purchased with grant funds, and if the equipment is relatively up-to-date and in good working order, TEA, at its discretion, may instruct the grantee to transfer the equipment to another viable grantee.

Disposal of all federally funded assets shall be tracked in the fixed assets database, including a disposition date and method for audit purposes.

SAMPLE ISD

PROCEDURES: PURCHASING

Procedures: Purchasing Procedures

October 2015 Page 1

Goal: To ensure a systematic process to review and approve the purchase of goods and services in

compliance with federal grants requirements, state law, Board Policy and local procedures.

Section 1. Purchase Order Approval Authority:

The Superintendent has delegated the Executive Director of Finance to approve all purchases that

are less than $50,000.

The Board of Trustees retains the authority to approve all contracts for the purchase of goods or

services for any single purchase that exceeds $50,000.

Section 2. Statutes, Regulations and Board Policies Applicable to Purchasing

The district shall comply with all Texas laws, regulations and Attorney General Opinions related to

the purchasing of goods and services.

The district shall comply with all local policies and procedures, such as School Board Policy CH Local

and these written purchasing procedures.

For all purchases with federal grant funds, the district shall comply with the federal regulations,

EDGAR related to the purchasing of goods and services. [2 CFR 200.317-200.326] effective July 1,

2017 (until the implementation of the EDGAR Procurement Standards the OMB Circulars shall

apply).

All relevant statutes, regulations, board policies and procedures shall be made available to all

purchasing stakeholders, as appropriate in a paper or electronic format.

Section 3. Requisition and Purchase Order Processing

On-Line Requisition System:

The district shall use an on-line requisition system for all purchases, except for non-purchase order

purchases such as petty cash and Procurement Card (PCard) transactions.

The Executive Director of Finance shall create all requisition system users/approvers and assign the

appropriate account code(s).

The Executive Director of Finance shall create all of the requisition approval paths in accordance

ith the district’s Purchasing Flow Chart (refer to Exhibits).

Purchase Requisitions:

Requisitions are internal documents and should not be forwarded to a vendor to place an order.

All requisitions from grant funds (state/federal) shall comply with the TEA Budgeting Costs

Guidance Handbook and the State & Federal Grants Handbook.

The approval path of requisitions shall be as noted below [Purchasing Flowchart].

The requestor (and/or the campus secretary/bookkeeper) shall submit a purchase requisition

using the on-line requisition system.

SAMPLE ISD



October 2015 Page 2

o If the vendor that the requestor intends to purchase from does not exist in the vendor

database, the requestor shall follow the Vendor Management Procedures.

o If the account code(s) that the requestor intends to purchase with do not have sufficient

funds, the requestors shall follow the Budget Change/Amendment Procedures.

The requestor shall forward all attachments for requisitions such as order forms, registration forms,

or other special instructions via email or pony pail. The attachment(s) shall include the system-

generated requisition number.

o If the requisition is for travel, follow the Travel Procedures.

o If the requisition is for a field trip, Co-Curricular, or Extra-Curricular trip, follow the Student

Travel Procedures.

o If the requisition is for the purchase or food and non-food items, follow the Food and Non-

Food Purchase Procedures.

o If the requisition is for professional services, follow the Contract Management Procedures.

o If the requisition is for incentives and/or awards for staff or students, follow the Staff and

Student Incentive & Award Procedures.

The re uestor’s super isor (ca pus pri cipal or depart e t head should recei e a e ail otif i g him/her that a requisition(s) are pending approval.

The campus principal or department head shall review and approve all requisitions.

All requisitions from federal grant funds shall be reviewed and approved by the appropriate grants

manager. Refer to the State and Federal Grants Manual.

The Accounting/Purchasing Specialist shall review all requisitions prior to releasing the requisition

for review by the Executive Director of Finance.

o The Accounting/Purchasing Specialist shall review the pending requisitions at 8:00 am in the

morning, throughout the day, and at the end of each day.

The review shall include the following:

o Requestor name

o Shipping address

o Vendor name and number

o Reason - Verify that the reason matches the purchase and is properly spelled out

o Reference – Name of person (and room number if classroom teacher) that goods should be

delivered to

o Attachment - If box is checked, the requisition should not be released until the attachment

is received and reviewed

o Bid Number – Bid, quote, or Co-Op contract number, as appropriate. NOTE. If the requisition

is for goods or services that were competitively procured, a copy of all bid/proposals shall

be on file in the purchasing department.

o Catalog number

SAMPLE ISD



October 2015 Page 3

o Description – Detailed description of item or service (exceptions may include: Web Order,

Order List attached, Contract/Scope of Services attached, etc.

o Unit of measure

o Unit price – If equipment with a unit cost equal to or over $500, the object code must be

664X; if equipment with a unit cost equal to or over $5,000, the object code must be 663X.

o Account code(s) – the account code(s) must match the purchase and location/department

If any deficiencies are noted with a requisition, the Accounting/Purchasing Specialist shall contact

the requestor to resolve the discrepancies.

o If the discrepancies cannot be remedied, the Accounting/Purchasing Specialist shall retur the requisition to the requestor.

The Accou ti g/Purchasi g “pecialist shall appro e all re uisitio s that eet the re uired re ie . The Accounting/Purchasing Specialist shall notify the Executive Director of Finance if any

requisitions are pending final approval or are time sensitive.

Purchase Orders:

The Executive Director of Finance shall serve as the final approver of all requisitions. Upon approval

by the Executive Director of Finance, the requisition becomes a purchase order and is assigned a

system-generated number.

Purchase Orders are si ilar to a pro issor ote i the se se that it co e s to the e dor that if they provide the goods or services, the district promises to promptly pay for the goods or services.

The Accounting/Purchasing Specialist shall print 3 copies of all purchase orders.

o The Accounting/Purchasing Specialist shall print purchase orders at 8:00 am in the morning,

throughout the day, and at the end of each day.

The Accounting/Purchasing Specialist shall distribute the purchase orders as noted below:

o 2 District copies – 1 for Receiving Clerk and 1 for Accounts Payable files

o 1 Vendor copy – Distribute to the vendor via fax or email

The Accounting/Purchasing Specialist shall file a district copy of all purchase orders in an alphabetic

file pending receipt of the invoice, packing list, and receiving confirmation.

The Accounting/Purchasing Specialist shall generate an Aged Purchase Order Report on a monthly

basis (at the end of the month) and research all aged purchase order. The research shall entail a

review with the Receiving Clerk of all purchase orders pending receipt.

o All purchase orders that are pending receipt after 60 days shall be cancelled unless there is

clear documentation that the order for goods or services will be filled within a reasonable

amount of time.

At the end of the fiscal year, all purchase orders shall be either cancelled or carried forward to the

following fiscal year.

SAMPLE ISD



October 2015 Page 4

o If the purchase order is carried forward to the following fiscal year, the Executive Director of

Finance shall record the aggregate amount in the respective fund group as Reserved for

Encumbrances.

Section 4. Non-Purchase Order Purchases

Petty Cash:

Each campus, the Food Service Department and the Business Office are authorized to have a petty

cash account. The petty cash accounts shall be in the following amounts and time periods:

o Elementary $_____ August 15th through June 15th

o Secondary $_____ August 15th through June 15th

o Food Service $_____ August 15th through June 15th

o Business Office $_____ Year-round

Petty cash transactions are authorized with all district fund groups, including federal grant funds. If a

petty cash purchase is made with federal grant funds, the appropriate federal grants manager shall

approve the transaction to verify that the expense is reasonable, necessary and allowable in the

federal grant fund.

Every petty cash transaction shall be supported with an original, detailed receipt and a Petty Cash

Voucher.

Petty cash transactions shall not exceed $50 per expense.

To replenish petty cash accounts, the campus or department secretary/bookkeeper shall prepare a

Petty Cash Reimbursement Form

The campus or department secretary/bookkeeper shall ensure that the reimbursement form is

supported by original, detailed receipts and shall verify the charges, add the account code(s), and

forward to the campus principal or department head for review and approval.

o Sales tax shall not be reimbursed with petty cash funds.

The Accounting/Purchasing Specialist shall review all Petty Cash Reimbursement Forms prior to

releasing the requisition for review by the Executive Director of Finance.


o Original, detailed receipt – the reimbursed amount must not include sales tax

o Account code(s) for each transaction – the account code(s) must be appropriate for the

purchase

o Approval from the campus principal or department head

If any deficiencies are noted with a Petty Cash Reimbursement Form, the Accounting/Purchasing

Specialist shall contact the requestor to resolve the discrepancies.

o If the discrepancies cannot be remedied, the Accounting/Purchasing Specialist shall return

the Petty Cash Reimbursement Form to the requestor.

SAMPLE ISD



October 2015 Page 5

The Accounting/Purchasing Specialist shall approve all Petty Cash Reimbursement Form that meet

the required review and prepare for payment in accordance with the Accounts Payable Procedures.

Procurement Card (PCard):

PCard transactions are authorized with all district fund groups, including federal grant funds. If a

PCard purchase is made with federal grant funds, the appropriate federal grants manager shall

approve the transaction to verify that the expense is reasonable, necessary and allowable in the

federal grant fund.

Each professional staff member and select paraprofessional staff (campus and department

secretaries) shall be eligible for a PCard.

To request a PCard, an employee shall complete an Employee Procurement Card Agreement and

forward to his/her supervisor.

The campus principal or department head shall review and approve all PCard requests.

The Executive Director of Finance shall review and approve all PCard requests to include the

following:

o Credit limit

o Merchant Code (MCC) Group

The Executive Director of Finance shall request all new cards from the banking institution.

The Accounting/Purchasing Specialist shall be responsible for the safekeeping of all PCards to

include the issuance and collection of PCards at the start and end of the PCard time periods.

The PCard time periods shall be as noted below:

o 10 month staff September 1st through May 31st

o 11 month staff August 15th through June 15th

o 12 month staff Year-round

The PCard holders shall submit a Purchase Transaction Log within 5 days of each purchase

The campus or department secretary/bookkeeper shall ensure that the log is supported by an

original, detailed receipt and shall verify the charges, add the account code(s), and forward to the

campus principal or department head for review and approval.

o Sales tax charges, if any, shall be collected from the PCard holder, receipted and deposited

to the expenditure account code(s).

The campus principal or department head shall review and approve all Purchase Transaction Logs.

The Accounting/Purchasing Specialist shall review all Purchase Transaction Logs prior to processing

the PCard account payment.


o Original, detailed receipt – the reimbursed amount must not include sales tax

o Purchase is in compliance with PCard Program Policies and Procedures.

o Account code(s) for each transaction – the account code(s) must be appropriate for the

purchase

SAMPLE ISD



October 2015 Page 6

o Approval from the campus principal or department head

If any deficiencies are noted with a Purchase Transaction Log, the Accounting/Purchasing Specialist

shall contact the campus or department secretary/bookkeeper to resolve the discrepancies.

o If the discrepancies cannot be remedied, the Accounting/Purchasing Specialist shall forward

the Purchase Transaction Log to the Executive Director of Finance.

The Accounting/Purchasing Specialist shall create an Excel spreadsheet of all charges by account

code to facilitate reconciliation and posting of the monthly PCard statement.

The Accounting/Purchasing Specialist shall approve all Purchase Transaction Logs that meet the

required review and prepare for payment in accordance with the Accounts Payable Procedures.

The Executive Director of Finance shall review and approve all PCard transactions prior to issuing the

payment to the credit card vendor.

Payment Authorization Form:

A Payment Authorization Form shall be used for two (2) types of payments:

o Non-purchase order payments such as unencumbered expenses such as legal fees,

scholarship awards, certification fee reimbursements, etc.

o Purchase order payments that exceed the encumbrance amount. Specifically, if an invoice

for a purchase order exceeds the purchase order by 20%, the excess payment amount (over

the purchase order) shall be initiated by the appropriate campus or department with the

account code(s) for the excess cost.

The Accounting/Purchasing Specialist shall review all Payment Authorization Forms to ensure that

funds exist in the account code(s) and that the vendor exists in the Vendor database.

The Executive Director shall approve all Payment Authorization Forms and forward to the

Accounting/Purchasing Specialist for payment.

Section 5. Competitive Procurement Methods and Procedures

Purchasing Methods:

The Executive Director of Finance (or the Superintendent) shall determine the appropriate

purchasing method for each type of purchase as noted below:

o All purchases of supplies, materials and equipment that, in the aggregate, are less than

$50,000 in a fiscal year, shall be made by selecting the lowest practical prices from the most

qualified vendors.

o Purchases of supplies, materials and equipment that, in the aggregate, are more than

$50,000 in a fiscal year, shall be made by one of the procurement methods allowed by state

law and/or federal regulations, as appropriate based on the source of funds.

o The priority order of competitive procurement methods for the district shall be as noted

below:

SAMPLE ISD



October 2015 Page 7

Interlocal contract or cooperative purchasing program

Competitive sealed proposals

Competitive bidding

o All purchases of professional services, such as architects, engineers, certified public

accountants, etc., shall be obtained through a Request for Qualifications process

o All purchases with federal grant funds shall also adhere to the EDGAR Procurement

Standards.

o When a conflict exists between the state and federal purchasing methods, the district shall

adhere to the more restrictive of the purchasing methods

Competitive Procurement Procedures:

The following procurement methods and procedures shall be utilized to ensure that the district meets

its purchasing goal(s).

Interlocal contract or cooperative purchasing program

The Executive Director of Finance shall ensure that the district subscribes to Interlocal Agreements

and Cooperative Purchasing Programs that provide the best value to the district.

Competitive Sealed Proposals

The Executive Director of Finance shall utilize the Checklist for Competitive Sealed Proposals

Process when the Superintendent or School Board have chosen this method for a specific

procurement of goods or services.

Competitive bidding

The Executive Director of Finance shall determine when the competitive bidding process is the most

advantageous purchasing method for a specific purpose.

The following procurement methods and procedures shall be utilized for all purchases with federal

grant funds effective July 1, 2017 (after the 2-year grace period). Prior to July 1, 2017, all federal grant

fund purchases shall comply with state law and OMB federal regulations.

Micro-purchase procurement (less than $3,000) – EDGAR Regulation

The Executive Director of Finance shall ensure that micro-purchases are allocated among qualified

vendors.

Small purchase procurement (up to $150,000) - EDGAR Regulation

The Executive Director of Finance shall obtain at least 2 quotes from qualified vendors before

approving small purchases.

SAMPLE ISD



October 2015 Page 8

Non-competitive procurement (sole source, etc.) - EDGAR Regulation

The Executive Director of Finance shall ensure that the appropriate pass-through or federal grant

agency has approved a non-competitive procurement such as sole source.

Section 6. Vendor Selection and Relations

Vendor Selection:

The Executive Director of Finance shall oversee the selection of vendors and the maintenance of the

district’s appro ed e dor data ase. The Accounting/Purchasing Specialist shall maintain the vendor database in the TxEIS Finance

System in accordance with the Internal Control Procedures: Vendor Maintenance.

The Vendor Management Procedures shall be adhered to in the selection, renewal and removal of

district approved vendors.

Vendor selection – The district shall select vendors that are qualified and capable to providing the

goods and/or services to the district. The vendor selection criteria for competitively procured goods

and services shall include:

1. Purchase price.

. The reputatio of the e dor a d of the e dor’s goods a d ser ices.

. The ualit of the e dor’s goods or ser ices.

4. The extent to which the goods or services meet the District’s eeds.

5. The e dor’s past relatio ship ith the District.

6. The impact on the ability of the District to comply with laws relating to historically

underutilized businesses.

7. The total long-term cost to the District to acquire the goods or services.

8. For a contract that is not for goods and services related to telecommunications and

information services, building construction and maintenance, or instructional materials,

hether the e dor or the e dor’s ulti ate pare t co pa or majority owner has its principal

place of business in this state or employs at least 500 persons in this state.

9. Any other relevant factor specifically listed in the request for bids or proposals. Education

Code 44.031(b). [Examples: Vendor response time, compatibility of goods/products purchased

with those already in use in the district.]

SAMPLE ISD



October 2015 Page 9

This criteria shall also be used to select vendors for the procurement of non-competitively procured

goods and services.

This criteria shall also be used to select vendor for the procurement of goods and services paid with

federal grant funds.

In addition to the criteria list above, the district shall establish and publish in construction services

specifications, the relative weights of each criteria.

The district shall not use vendor selection criteria that restricts full and open competition among

qualified vendors.

o Specifically, the district shall not consider the following in selecting vendors for purchases or

goods or services with federal grant funds (EDGAR), as this criteria may restrict full and open

competition among qualified vendors:

Unreasonable requirements on firms for them to qualify to do business,

Requiring unnecessary experience and excessive bonding,

Noncompetitive pricing practices between firms or between affiliated companies,

Noncompetitive contracts to consultants that are on retainer contracts,

Organizational conflicts of interest

Specifying a brand name instead of allowing an approved-equal product in

specifications,

Any arbitrary action in the procurement process.

Vendor renewal – The district shall renew an inactive vendor using the vendor selection criteria.

Vendor removal – The district shall investigate all vendor complaints such as non-responsiveness,

poor quality of goods or services, or other documented, substandard performance. In the event that

the complaint is verified and not remedied on a timely basis by the vendor, the Executive Director of

Fi a ce shall otif the e dor [i riti g] that the ill e re o ed fro the district’s approval

vendor database.

Vendor inactivation – The Executive Director of Finance may inactive a vendor due to inactivity over

one (1) full fiscal year, or as appropriate, if the vendor ceases to provide goods or services to the

district or the general public.

Vendor Relations:

The district operates under a centralized purchasing system; therefore, the business department

is tasked with distributing the Purchase Order to the vendors and corresponding with vendors

regarding pending purchase orders.

No district employee shall forward a purchase order to a vendor, unless prior authorization has

been approved by the business department.

Purchase order initiators, such as campus-based or department-based staff, are strictly

prohibited from ordering goods or services from vendors without a purchase order. Such orders,

SAMPLE ISD



October 2015 Page 10

if any, shall be financial responsibility of the initiator. Furthermore, this action will be in violation

of the district’s “chool Board Polic CH Local. Business department staff and purchase order initiators are strictly prohibited from establishing

close, personal relationships with vendors as these types of relationships may result in a conflict

of interest or a perception of improper vendor relations.

Section 7. Receiving & Distribution

The district shall utilize a centralized receiving system for all goods ordered through the purchase

order process.

The Central Receiving Area shall be in a controlled environment to protect the goods until they can

be inspected, counted and labeled for delivery.

o No goods shall be removed from the Receiving Area without the prior approval of the

Receiving Clerk and/or Accounting/Purchasing Specialist.

Goods which are too large or on pallets shall be delivered to the Maintenance Warehouse. On at

least a daily basis, the Maintenance Director shall notify the Receiving Clerk if any goods were

received at the Maintenance Warehouse.

o If goods include multiple boxes on a pallet, the Maintenance Staff shall break apart the

pallet and deliver all boxes/packages to the Central Receiving Area.

o If goods include goods that require assembly, the Maintenance Director shall open, inspect

and sign-off in receipt of the goods. The packing list shall be forwarded to the Receiving

Clerk within two (2) of receipt. The Maintenance Director shall assign the assembly of the

goods to one of the Maintenance staff members.

o If the goods will be delivered and/or installed directly at a campus or department, the

Maintenance Director shall notify the Receiving Clerk of the receipt of the goods and shall

deliver the goods directly to the campus or department.

o In no event, shall goods received at the Maintenance Department remain in that

department for more than two (2) days.

The Accounting/Purchasing Specialist shall forward a copy of all purchase orders to the Receiving

Clerk.

The Receiving Clerk shall file all receiving copies of purchase orders in alpha order by month. A copy

of all e-purchase orders should also be maintained on file.

On at least a daily basis, the Receiving Clerk shall inspect all packages/boxes received for damage. If

damages have occurred, the vendor should be promptly notified.

The Receiving Clerk shall open, count and record all goods received on the appropriate open

purchase order.

The Recei i g Clerk shall check off all ite s o the recei i g report. The e dor shall e promptly

notified of any discrepancies.

The quantity of items received shall be entered on the TXEIS receiving system.

If the order i cludes i e tor or fi ed asset e uip e t, the appropriate tag u er should e affixed to the equipment by the Data Processing Specialist.

SAMPLE ISD



October 2015 Page 11

All boxes/packages should be labeled for delivery to the appropriate campus or department. The

room number indicated on the purchase order should be noted on the box(es) for direct delivery to

the classroom by the custodial staff.

The signed, receiving copy should be forwarded to the Accounting/Purchasing Specialist for

payment to the vendor.

At the end of the month, the Data Processing Specialist shall generate and review an Aged Purchase

Order report [over 60 days].

All orders that have been outstanding for more than 60 days should be researched and cancelled, if

appropriate, by the Receiving Clerk. All order cancellations should be relayed to the

campus/department and the Accounting/Purchasing Specialist.

Section 8. Disposal of Obsolete and Surplus Property

The disposal or obsolete and surplus property shall be in accordance with the Fixed

Assets/Inventory Procedures.

SAMPLE ISD

PROCEDURES: CONTRACT MANAGEMENT

Procedures: Contract Management

May 2015 Page 1

Goal: To ensure a systematic process to review and approve contracts with vendors to include

purchases, services, maintenance agreements, construction, and other contracts as appropriate.

Contract Approval Authority [Board Policy CH Local]:

The Superintendent has been designated by the Board of Trustees to approve and execute all

contracts for the purchase or goods or services for all single purchases that are less than $50,000.

The Board of Trustees retains the authority to approve all contracts for the purchase of goods or

services for any single purchase that exceeds $50,000.

Contract Review:

The requestor [campus or department] shall forward the Contract document(s) to the Executive

Director of Finance for review.

o Contracts may be vendor-originated, or

o Lackla d I“D’s Professional Services (Consultant) Contract

The Contract Transmittal form shall be completed by the originator and attached to the Contract

document(s).

The Contract documents shall include the vendor/co tractor’s co tract form or the Lackland ISD

Consultant Contract.

If the proposed vendor is new to the district, a completed Lackland ISD Vendor Application Packet

shall be included with the contract documents.

The Executive Director of Finance shall review the Contract and complete a Contract Review

Checklist.

o If the contract will be funded with federal grant funds, the following provisions must be

included in the contract [Per TEA’s Guida ce a d Best Practices]. The contract is only effective upon receipt by the subgrantee of the NOGA from the

awarding agency.

The contract period is aligned to the grant period of availability as stated on the

NOGA from the awarding agency (period of availability).

All services will be completed during the effective dates of the contract.

All services will be invoiced monthly after services are received (rather than paid

lump sum at the beginning of the period of availability before services are rendered)

and paid upon verification of receipt of services.

The regulations for procurement in 2 CFR §§200.318-323 are followed in issuing the

contract.

All professional services provided under the contract will follow the provisions of 2

CFR 200.459 Professional service costs.

The contract identifies the funding sources that will be charged for the services

provided, including the specific amount and/or percentage of the total contract

amount to be charged to each funding source.

SAMPLE ISD



May 2015 Page 2

The contract identifies and lists only reasonable, necessary, and allocable services to

be provided during the period of availability of the funding sources listed in the

contract.

The administrative costs charged to the grant in the contract must comply with any

limitations for administrative costs for funding sources (if applicable).

The contract specifies that the invoice provided by the contractor will include the

list of services provided, dates of services, and location(s) where services were

provided during the billing period.

o If the contract will be funded with federal grant funds, the following provisions must be

included in the contract [Per EDGAR Appendix II Part 200 Contract Provisions for Non-

Federal Entity Contracts Under Federal Awards].

Contracts over $150,000 must address administrative, contractual or legal remedies

in instances where contractors violate or breach contract terms, and provide for

such sanctions and penalties.

Contract over $10,000, must address termination for cause and for convenience by

the District including the manner by which it will be effected and the basis for

settlement.

Equal Employment Opportunity clause

Davis-Bacon Act clause for construction contracts, including compliance with

prevailing wages. [The District must place a copy of the current prevailing wage

determination is used by the Department of Labor with each solicitation.]

Contract Work Hours and Safety Standards Act clause related to the computation of

wages of every mechanic and laborer on the basis of a standard work week of 40

hours.

Rights to Inventions Made Under a Contract or Agreement clause if the federal

a ard eets the defi itio of fu di g agree e t

Clean Air Act and Federal Water Pollution Contract Act clauses if the contract is in

excess of $150,000

Debarment and Suspension clause which prohibits awarding a contract to a

contractor who has been debarred, suspended or otherwise excluded from federal

awards.

Byrd Anti-Lobbying Amendment clause which applies to contractors that apply or

bid for an award exceeding $100,000 who must file the required certification.

Procurement of recovered materials (200.322) clause

If the Contract is recommended as is, the Contract will be forwarded to the Superintendent and/or

School Board for final review and approval (signature).

If the Contract is not acceptable as is, the Executive Director of Finance shall contact the contracting

party to attempt to resolve the deficiency(ies).

SAMPLE ISD



May 2015 Page 3

o Legal advice fro the district’s legal fir shall be obtained as necessary to remedy the

contract deficiencies.

If the Contract is not acceptable and cannot be corrected to an acceptable form, the Executive

Director of Finance shall reject the contract and notify the proposed vendor. The rejected contract

shall be forwarded to the Accounting/Purchasing Specialist.

The Accounting/Purchasing Specialist shall file the rejected contract.

Contract Letter of Intent [Per TEA’s Guidance and Best Practices]:

The Superintendent may execute a Letter of Intent with a third party (contractor) prior a fiscal year

or state/federal grant period only if the following provision is included in the Letter of Intent:

o The final execution of the contract is contingent upon availability of local funds or receipt of

a Notice of Grant Award (NOGA) from a state/federal granting agency.

Contract Approval:

The Superintendent shall return the original, signed Contract to the Executive Director of Finance.

If the contract also requires School Board approval, the Executive Director of Finance shall prepare

the School Board Action Item for approval at the next regularly scheduled board meeting.

The Board Secretary shall return the original, signed Contract to the Executive Director of Finance.

The Executive Director of Finance and/or Accounting/Purchasing Specialist shall verify that the

contract document(s) have been executed and take the following steps:

o Ensure that both parties (District and Contractor) have executed the contract. Notify the

contractor by letter, email and/or phone call, as appropriate, that the contract has been

approved, but is pending encumbrance of funds.

o Notify the contractor that the services cannot begin until the contractor receives the fully

executed contract and Purchase Order.

o Notify the contactor that the services cannot begin until the contractor submits any bonds,

Certificate of Insurance, Criminal History, etc. documentation, as appropriate.

o Notify the contract originator (campus or department) of the contract approval and request

that the originator submit a requisition to encumber the funds associated with the contract.

o Forward the original contract to the Accounting/Purchasing Specialist for filing purposes.

Upon receipt of the original, signed contract, the Accounting/Purchasing Specialist shall file the

original contract according to the Contract Filing Procedures (below).

The Accounting/Purchasing Specialist shall enter the new vendor in the TxEIS database and file the

Contract copy pending receipt of a requisition from the originator.

o If the originator does not submit a requisition within 10 business days, the Contract shall be

voided. Notification shall be made via email to the originator regarding the Contract

cancellation. The contractor shall also be notified that the contract is null and void.

SAMPLE ISD



May 2015 Page 4

Purchase Commitment for Contract (Purchase Order):

The requestor shall submit a purchase requisition for the annual cost [fiscal year] of the contract.

Upon receipt of the purchase requisition, the Accounting/Purchasing Specialist shall review and

appro e the re uisitio i accorda ce ith the district’s Purchasing Procedures.

The Accounting/Purchasing Specialist shall attach a copy of the approved contract to the purchase

requisition and forward to the Executive Director of Finance for approval of the requisition.

The Executive Director of Finance shall review and approve the purchase requisition in accordance

ith the district’s Purchasi g Procedures. Upon approval of the purchase order, the Accounting/Purchasing Specialist shall forward a copy of

both the approved contract and purchase order to the vendor.

Contract Filing Procedures:

Upon receipt of a fully executed Contract and Vendor Application Packet, the Accounting &

Purchasing Specialist shall file the contract as noted below:

o Scan the Contract to a PDF and file in a Shared Business folder, and

o File the original Contract in the fire-proof safe.

Contracts shall be filed by the length of the contract as noted below:

o One-time or single fiscal year contracts shall be filed by fiscal year

o Multi-year, term and recurring contracts shall be filed by vendor name

An Excel spreadsheet of all multi-year contracts shall be maintained. The spreadsheet shall contain

the following information (at a minimum):

o Vendor name and number

o Starting and ending date of contract

o Renewal terms, such as automatic renewals, or renewal by mutual agreement, etc.

o Non-renewal or cancellation terms (for recurring contracts)

Contract Management:

The contract originator shall be directly responsible to ensure that the contracting party performs

the services covered by the Contract. The contract originator shall sign the invoice to certify that the

work was completed to satisfactory standards.

For contracts in excess of $10,000 a 2nd administrator shall also review and ensure that the

contracting party performed the contracted work. The 2nd administrator shall sign the invoice to

certify that the work was completed to satisfactory standards.

Upon completion of the service(s), the vendor shall forward an invoice to the Accounting/Purchasing

Specialist to request that payment be made to the contracting party. The contractor shall provide an

SAMPLE ISD



May 2015 Page 5

invoice with a list of services provided, dates of services and location(s) where the services were

performed during the billing period.

The Accounting/Purchasing Specialist shall make partial or final payments only upon receipt of an

invoice signed by the originator. The signature of the originator is verification that the services have

been performed and that the payment should be made to the contracting party.

Contract Review Checklist

Yes No N/A Activity

Contracting parties are correct?

Term of contract is specified?

Multi-year contract has a funding out clause on a fiscal year basis?

Co tract has a auto-re e pro isio ?

Venue is listed as Bexar County, Texas?

Governing Law is the State of Texas?

Amendments, if any, must be in writing and agreed to by both parties?

Dispute resolution is mediation?

Dispute resolution is arbitration?

Ter i atio clause has a ith or ithout cause pro isio ?

Indemnification clause is worded appropriately (In accordance with Texas law)

Payment terms, in accordance with Texas Prompt Payment Act?

Attorney Fees are specified?

Severability Clause is present?

Confidentiality Clause is appropriately worded? (Subject to Texas PIA)

Ownership of intellectual property for items created?

Person (vendor) is indebted to district (if restricted in CH Local)?

Professional services contracts were obtained under Govt. Code 2254.003?

Interlocal Agreements: Vendor has stipulated contract-related or management

fees? [Must report these fees to Board in writing on an annual basis.]

Certificates of Insurance are required?

Payment and/or Performance Bonds are required?

Criminal history: Felony Conviction Form has been submitted for contractor

and subcontractor, if any

Criminal history: Vendor has certified that all contractor and subcontractor

employees have been subject to a national criminal history [applicable if the

contract i cludes co ti ui g duties or direct (u super ised co tact ith a student(s)]

Other:

Other:

Other:

Other:

Vendor:

Reviewed by: ________________________________ Date: _____________________________

Contract Recommended: ( )Yes ( )No

SAMPLE ISD

PROCEDURES: VENDOR MANAGEMENT

Procedures: Vendor Management

June 2015 Page 1

Goal: To ensure a systematic process of adding and renewing vendors on the finance database. The

process is designed to meet local, state, and federal guidelines related to vendor relations and

procurement by a school district.

Vendor Application

The requestor shall forward the Vendor Application Packet to the prospective vendor. An inactive

vendor must complete a new Vendor Application Packet after a 1-year period of inactivity.

The Vendor Application Packet shall include the following:

o Vendor Application

o Form W-9

o Conflict of Interest Questionnaire

o Felony Conviction Form

o Criminal History Verification (if applicable)

o Certificate of Insurance (with Lackland ISD as additional insured, if applicable)

o Debarment Certification Form (if contracted with federal grant funds)

The completed Vendor Application Packet should be forwarded by the requestor to the

Accounting/Purchasing Specialist.

Vendor Review and Approval

The Accounting/Purchasing Specialist shall review the packet to ensure that all required items have

been submitted and are properly executed, including the signature of an authorized individual.

The Accounting/Purchasing Specialist shall review and verify the following requirements, as

appropriate. Possible non-compliance with the requirements shall be forwarded to the Executive

Director of Finance for a final determination regarding the vendor eligibility to contract with the

District.

Insurance Requirements:

If the vendor will perform services on Lackland ISD Property, the vendor must provide the Certificate

of Insurance (with Lackland ISD as additional insured) prior to the start of any work and only after a

purchase order has been approved by the final approving authority. The Certificate of Insurance

must include the following lines of coverage and limits and must be with a carrier with at least an

A rati g ith A.M. Best. o E plo er’s Lia ilit - $500,000 Each Accident

o Commercial General Liability - $1,000,000 Combined Single Limit. $500,000 Combined

Single Limit Each Occurrence

o Business Automobile Liability - $1,000,000 Combined Single Limit Each Occurrence

(Hired/non-owned coverage, too)

SAMPLE ISD



June 2015 Page 2

o Workers Compensation – Certificate of insurance, certificate of authority to self-insure

issued by the TDI, or a coverage agreement showing statutory workers compensation

i sura ce co erage for the perso ’s or e tit ’s e plo ees pro idi g ser ices o a project is required for the duration of the project.

o Note: The Commercial General Liability and Business Automobile Liability limits may

be adjusted dependent upon the size, scope and nature of contract.

Felony Conviction/Criminal History Verification:

All vendors shall complete a Felony Conviction Form and disclose if the owner or operator has been

convicted of a felony.

Co tractors ho ill ha e co ti ui g duties [defi ed as pro idi g the ser ice o a regular, repeated asis] or direct co tact ith stude ts [defi ed as pro idi g su sta tial opportu it for

verbal or physical interaction with students that is not supervised by a district employee] shall

obtain criminal history record information and provide it to the District.

Employer TIN-Matching:

The Accounting/Purchasing Specialist shall verify the TIN of vendors through the IRS TIN-Matching

online service. If any discrepancies are noted between the TIN-Matching online service and the

vendor-completed Form W-9, the matter shall be referred to the Executive Director of Finance to

make a determination regardi g the e dor’s eligi ilit to co duct usi ess ith the District. IRS TIN-Matching Log-In

Bonding Requirements [Construction Only]:

If a construction contract exceeds $25,000, the Accounting/Purchasing Specialist shall verify that the

o d [cashier’s check or certified check i the a ou t of ot less tha 5% of the co tract price] ith the appropriate amount has been submitted to the District.

Licensed or Registered Contractors:

If the contractor is required to be licensed or registered with the State of Texas (such as plumbers,

electricians, HVAC technicians], the Accounting/Purchasing Specialist shall verify that the

co tractor’s lice se if acti e a d that there are o sa ctio s agai st the co tractor. The Texas Department of Licensing and Regulation (TDLR) website shall be used to search for

licensed contractors and to search for contractor violations.

TDLR Licensed Contractor search: https://www.license.state.tx.us/licensesearch/

If the contractor is not required to be licensed by the State of Texas, the Accounting/Purchasing

Specialist shall verify if the contractor is registered with the City of San Antonio (such as remodeling,

painting, or other skilled trades].

https://la2.www4.irs.gov/pub/rup_login_1?TYPE=33554433&REALMOID=06-3e42c2f4-1c41-0019-0000-25b0000025b0&GUID=&SMAUTHREASON=0&METHOD=GET&SMAGENTNAME=lgjzN0Exzjjq7GXjaIQAtum2VjVbftpJfXjCX5EEznNQ6gB2VzGstn8fCh3KSapr&TARGET=-SM-%2fRUP%2fnewSelectPersonality%2f%3fTYPE%3d33554433%26REALMOID%3d06--42d3d179--ae36--0006--0000--4d5700004d57%26GUID%3d%26SMAUTHREASON%3d0%26METHOD%3dGET%26SMAGENTNAME%3dlgjzN0Exzjjq7GXjaIQAtum2VjVbftpJfXjCX5EEznNQ6gB2VzGstn8fCh3KSapr%26TARGET%3d--SM---%2fPORTAL----PROD-%2fCRM-%2fsignon-%2ehtml

https://www.license.state.tx.us/licensesearch/

SAMPLE ISD



June 2015 Page 3

The City of San Antonio Contract Search website shall be used to search for registered

contractors. The District shall contract with a registered contractor is a preference.

City of San Antonio Contractor Search: http://sanantonio.gov/DSD/Online/Contractor.aspx

Debarred Vendor Verification:

The Accounting/Purchasing Specialist shall verify that a vendor to be contracted with federal grant

funds has completed a Certification Regarding Debarment, Suspension, Ineligibility and Voluntary

Exclusion for Covered Contracts and Grants Form.

The Accounting/Purchasing Specialist shall verify that the vendor is not debarred from doing

business with the State of Texas.

o The Texas Comptroller of Public Accounts maintains a list of vendors debarred from doing

business with the State of Texas, effective from the Date of Debarment for the length of

time indicated.

o http://comptroller.texas.gov/procurement/prog/vendor_performance/debarred/

The Accounting/Purchasing Specialist shall verify that all new vendors are not debarred from

receiving federal contracts [contracts funded with federal grant funds]. o The SAM.GOV website shall be used to search for ineligible vendors. o The co tractor a e should e e tered i the search field. E tities ith E clusio listed

i purple are curre tl de arred, hile those la eled E tit i gree do ot ha e exclusions.

The Accounting/Purchasing “pecialist shall refer a detectio of a e dor’s de ar e t (state of federal) to the E ecuti e Director of Fi a ce to ake a deter i atio regardi g the e dor’s eligibility to conduct business with the District.

After the Accounting/Purchasing Specialist has verified that a Vendor Application Packet is

complete, the packet shall be forwarded to the Accounting Manager and/or Executive Director of

Finance for final review and approval.

After the final approval, the vendor shall be added on the vendor database. NOTE: Vendors will be

added to the vendor database only if a purchase requisition has been submitted by the requestor.

Vendor Database Management

The Accounting/Purchasing Specialist shall create a complete vendor record, including but not

limited to the following:

Vendor legal name and DBA, if applicable

Mailing address

Remit address, if applicable

Tax Identification Number or Social Security Number

Date W-9, Felony Conviction, and CIQ forms were received from vendor

Company phone numbers: voice and fax

Company email

http://sanantonio.gov/DSD/Online/Contractor.aspx

http://comptroller.texas.gov/procurement/prog/vendor_performance/debarred/

https://www.sam.gov/portal/SAM/?portal:componentId=da4318dc-6b96-4dc1-be67-739ce150f67f&interactionstate=JBPNS_rO0ABXc0ABBfanNmQnJpZGdlVmlld0lkAAAAAQATL2pzZi9mdW5jdGlvbmFsLmpzcAAHX19FT0ZfXw**&portal:type=action#1

SAMPLE ISD



June 2015 Page 4

Prior to adding a new vendor, the Accounting/Purchasing Specialist shall verify if the vendor does

not exist in the Vendor Database in an active or inactive status.

o If the vendor does exist, and the vendor identification information is the identical, the

inactive vendor may be reactivated.

The Accounting/Purchasing Specialist shall make changes to the vendor database upon receipt from

a vendor of a change in address, phone number, email, etc.

The Accounting/Purchasing Specialist shall seek approval from the Executive Director of Finance

prior to adding a new vendor, if the vendor notifies the district of a change of their company name,

tax identification number, etc.

Throughout the fiscal year, on at least a quarterly basis, the Accounting/Purchasing Specialist shall

verify that the vendors paid with federal grant funds are not debarred from federal contracts.

At the end of each calendar year, the Executive Director of Finance shall review Vendor activity to

determine which vendors, if any, to inactivate.

Vendor Number Tracking

The District shall use the auto numbering feature in the finance system. At no time, shall a vendor

number be reused as this will create data quality issues for historical finance files.

SAMPLE ISD



June 2015 Page 3

The City of San Antonio Contract Search website shall be used to search for registered

contractors. The District shall contract with a registered contractor is a preference.

City of San Antonio Contractor Search: http://sanantonio.gov/DSD/Online/Contractor.aspx

Debarred Vendor Verification:

The Accounting/Purchasing Specialist shall verify that a vendor to be contracted with federal grant

funds has completed a Certification Regarding Debarment, Suspension, Ineligibility and Voluntary

Exclusion for Covered Contracts and Grants Form.

The Accounting/Purchasing Specialist shall verify that the vendor is not debarred from doing

business with the State of Texas.

o The Texas Comptroller of Public Accounts maintains a list of vendors debarred from doing

business with the State of Texas, effective from the Date of Debarment for the length of

time indicated.

o http://comptroller.texas.gov/procurement/prog/vendor_performance/debarred/

The Accounting/Purchasing Specialist shall verify that all new vendors are not debarred from

receiving federal contracts [contracts funded with federal grant funds]. o The SAM.GOV website shall be used to search for ineligible vendors. o The co tractor a e should e e tered i the search field. E tities ith E clusio listed

i purple are curre tl de arred, hile those la eled E tit i gree do ot ha e exclusions.

The Accounting/Purchasing “pecialist shall refer a detectio of a e dor’s de ar e t (state of federal) to the E ecuti e Director of Fi a ce to ake a deter i atio regardi g the e dor’s eligibility to conduct business with the District.

After the Accounting/Purchasing Specialist has verified that a Vendor Application Packet is

complete, the packet shall be forwarded to the Accounting Manager and/or Executive Director of

Finance for final review and approval.

After the final approval, the vendor shall be added on the vendor database. NOTE: Vendors will be

added to the vendor database only if a purchase requisition has been submitted by the requestor.

Vendor Database Management

The Accounting/Purchasing Specialist shall create a complete vendor record, including but not

limited to the following:

Vendor legal name and DBA, if applicable

Mailing address

Remit address, if applicable

Tax Identification Number or Social Security Number

Date W-9, Felony Conviction, and CIQ forms were received from vendor

Company phone numbers: voice and fax

Company email

http://sanantonio.gov/DSD/Online/Contractor.aspx

http://comptroller.texas.gov/procurement/prog/vendor_performance/debarred/

https://www.sam.gov/portal/SAM/?portal:componentId=da4318dc-6b96-4dc1-be67-739ce150f67f&interactionstate=JBPNS_rO0ABXc0ABBfanNmQnJpZGdlVmlld0lkAAAAAQATL2pzZi9mdW5jdGlvbmFsLmpzcAAHX19FT0ZfXw**&portal:type=action#1

SAMPLE ISD



June 2015 Page 4

Prior to adding a new vendor, the Accounting/Purchasing Specialist shall verify if the vendor does

not exist in the Vendor Database in an active or inactive status.

o If the vendor does exist, and the vendor identification information is the identical, the

inactive vendor may be reactivated.

The Accounting/Purchasing Specialist shall make changes to the vendor database upon receipt from

a vendor of a change in address, phone number, email, etc.

The Accounting/Purchasing Specialist shall seek approval from the Executive Director of Finance

prior to adding a new vendor, if the vendor notifies the district of a change of their company name,

tax identification number, etc.

Throughout the fiscal year, on at least a quarterly basis, the Accounting/Purchasing Specialist shall

verify that the vendors paid with federal grant funds are not debarred from federal contracts.

At the end of each calendar year, the Executive Director of Finance shall review Vendor activity to

determine which vendors, if any, to inactivate.

Vendor Number Tracking

The District shall use the auto numbering feature in the finance system. At no time, shall a vendor

number be reused as this will create data quality issues for historical finance files.

hearne isd management review march 7,...

Documents