skills refresher for asbo international’s certification exam€¦ · the shift from mainframe to...

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Skills Refresher for ASBO International’s

Certification Exam

Copyright ASBO International 2010

Table of Contents

• Managing Accounting Systems (28%-33%)• Managing Accounting Functions (67%-72%)• Conduct Financial Planning and Analysis (27%-32%)• Conduct Budget and Reporting Activities (15%-20%)• Conduct Risk Management Activities (10%-15%)• Manage School Facilities (7%-12%)• Manage Information Systems (4%-6%)• Manage Human Resource Functions (15%-20%)• Manage Ancillary Services (7%-12%

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Manage Accounting Systems

Ellen R. SkovieraAssistant Superintendent for Business and Operations

Leander ISDLeander, TX 78641

[email protected]

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What is an Accounting System?

• A series of steps, either manual or automated, that records the transactions of a business, and provides the information for financial reports

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Typical Accounting Flow• Journalize the business event (accounting

transaction) in a book of original entry (a special or general journal)

• Post the business event from the journal to a subsidiary ledger

• Post the total from the journal to the General Ledger

• Summarize the business events by preparing a trial balance

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Automated Systems• Batch processing: aggregation of several

business events over some period of time with the subsequent processing of these data as a group (while not identical, the term ‘periodic mode’ is sometimes used interchangeably)

• OLTE-On-line transaction entry: data entry directly into the information system at the time and place where the transaction occurs

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Automated Systems• OLRT-Online Real-Time Processing:

entry of transaction at the time and place of its occurrence, which updates the master data file immediately(The term ‘immediate mode’ is used to refer to the processing mode where little or no delay occurs between transaction entries)

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Automated Systems• 3 steps:• Record Transaction• Update Master Data• Generate reports (and support

queries)

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On-line communications technology

• Communication networks range from those designed to link a few computers, to the internet which links most of the world’s computers together

• Client/server: the physical and logical division between user-oriented allocation programs that are run at the client (user) level and the shared data that must be available through the server (the central server that handles centrally shared activities)

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• LAN (Local-area network): links several different local user machines with printers, databases, and shared devices

• WAN (Wide-area network): links distributed users and local networks into an integrated communications network

• Web browsers: software designed to allow users to easily view various documents and data sources available on the Internet

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• Intranet: mini internal equivalent to the Internet, links an organization’s internal documents and databases that are accessible via Web browsers or internally developed software

• Extranet: expanding access to a company’s intranet to external, trusted partners

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Internet-based systems (Cloud computing)

• Cloud computing is a paradigm shift following the shift from mainframe to client–server in the early 1980s. Details are abstracted from the users, who no longer have need for expertise in, or control over, the technology infrastructure "in the cloud" that supports them.

Continued…12

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• Cloud computing describes a new delivery model for IT services based on the Internet, and it typically involves over-the-Internet provision of dynamically scalable and often virtualized resources. Cloud services provide ease of access to remote computing sites provided by the Internet, web-based tools or applications that users can access and use through a web browser, as if it were a program installed locally on their own computer.

Internet-based systems (Cloud computing)

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Important Things to Remember

• Security: are your records housed either manually or on-line in a location that is protected from intrusion? In fire-proof cabinets, if hard to replace

• Back-up: are your electronic records backed-up at least each night?

• If there were an emergency, have you assigned records responsibility to anyone?

• Do you have Business Interruption Insurance?

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Documentation• Sarbanes-Oxley Act of 2002 Section 404

requires that organizations document internal controls over their financial reporting processes

• This documentation helps the organization know the flow of transactions through the accounting system, helps identify which areas have implemented internal controls, and can identify areas of control gaps that need to be addressed

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Documentation• Written procedures• Flowcharts: • Data flow diagrams, which portray business

process activities , storage of data, and flows of data

• Systems flowcharts present a comprehensive picture of the management operations, information systems, and process controls present in the business processes

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THIS IS YOUR BREAK

See you back in 15 minutes!

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Manage Human Resource Functions

Matthew J. MalinowskiDirector of Business Affairs

School District of Cheltenham TownshipElkins Park, PA

Manage Hiring of Good Employees

• Recruitment– Review the necessary qualifications by

appropriate personnel: HR, principals, supervisors

– Utilize exit interview paperwork

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• Vacancy Notice– Include job description or summary job

description– Work Schedule– Hourly rate– Salary

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• Application• Qualifications• Reference Check• Interviews

– Use at least teams of two • Ensure at least one individual on the team is

knowledgeable of job functions– Document questions and answers– Ensure questions are appropriate– Prohibit comments that are personal and

subjective 23

Managing Hiring of Good Employees

• Orientation Goals– To Promote the new employee’s

identification with the school entity– To facilitate the new employee’s

successful adjustment to the entity and to the position to which he/she has been assigned

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Managing Hiring of Good Employees

• Probationary Period– 30 days to 1 year– Formal evaluation

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• Tour of facility• Introduction to staff• On-site organization structure• Reporting time/procedures• Inclement weather procedures• Attendance/punctuality• Absence notification• Special equipment/supplies (tools, etc.)• Dress• Security/ID badges• Emergency procedures• School calendar• Break times• Lunch area procedures

• Parking• Telephone calls/rules• Overtime/comp. time/extra duty• Staff/faculty meetings• Sick leave/other leaves• Jury duty• Safety/accident reporting• Handbook or contract distribution• Review of position description• Evaluation form• Review and receipt of particular

policies• (harassment, smoke/tobacco/drug-

free workplace, workers’• compensation, evaluation, discipline,

child/student abuse)• Explanation of applicable employee

benefit programs• (Retirement, health and life benefits,

flexible spending accounts)• Tax-sheltered annuities• Payroll dates and procedures• Probationary period

ORIENTATION TOPICS

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Develop Compensation Structure

• Compensation Management– Goal: Have a system of determining

compensation for employees that is: • Fair• Understandable• Rational

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Develop Compensation Structure

• Compensation Management– Internal Equity

• Range of pay for positions in organization and the relative value/rate of pay assigned

– External Equity• Rate of pay for a position as compared to the

“market”• “Market” for school districts is surrounding districts• For some trades and technology other external data

may be relevant• Critical to attracting and retaining qualified

candidates28

Manage Staff Development and Training Programs

• Link Training with ASBO/ Local ASBO• Look for appropriate college opportunities

for staff development• Bring effective Personnel through internal

and external development programs

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Manage Evaluation Process

Purpose of Evaluation• First, it acts as the tool to evaluate

administrator performance• Secondly, it provides the documentation

necessary to award merit increases as a result of demonstrated performance

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Manage Personnel Administration

• Pertinent Regulations– Family and Medical Leave Act of 1993 (FMLA)

• The U.S. Department of Labor’s Employment Standards Administration, Wage and Hour Division, administers and enforces the Family and Medical Leave Act (FMLA) for all private, state and local government employees, including school entities. FMLA became effective on August 5, 1993 and entitles eligible employees to take up to 12 weeks of unpaid, job-protected leave in a 12-month period for specified family and medical reasons. The employer may elect to use the calendar year, a fiscal year or a 12-month period prior to or after the commencement of leave as the 12-month period.

• The law contains provisions on employer coverage, employee eligibility for the law’s benefits, entitlement to leave, maintenance of health benefits during leave, job restoration after leave, notice and certification of the need for FMLA leave and protection for employees who request or take FMLA leave. The law also requires employers to keep certain records.

• School entities should adopt policies to clarify specific aspects of the law.– Consolidated Omnibus Budget Reconciliation Act (COBRA)

• Federal law requires that employers offer eligible employees and their dependents the opportunity for a temporary extension of health coverage called continuation coverage at group rates in certain instances, or Qualifying Events, where coverage under the plan would otherwise end.

– The Health Insurance Portability and Accountability Act of 1996 (HIPPA)• HIPAA protects health insurance coverage for workers and their families when they change

or lose their jobs.• http://www.hhs.gov/ocr/privacy/

– Drug-Free Workplace Act of 1988• Required of any organization who receives federal funding

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Manage Personnel Administration

– Omnibus Transportation Employee Testing Act of 1991• requires all school entities to establish programs and practices designed to help prevent

accidents and injuries resulting from the misuse of alcohol or controlled substances by drivers of commercial vehicles subject to the commercial driver’s license (CDL) requirements

– Harassment Policy • Equal Employment Opportunity Commission guidelines on discrimination because of sex

define sexual harassment as any unwelcome sexual conduct that “has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile or offensive work environment.”

– Americans with Disabilities Act (ADA)• Activities covered under the ADA include but are not limited to walking, talking, seeing

and hearing. People with a record of such impairment and those regarded as having an impairment are protected under the ADA.

– Age Discrimination in Employment Act (ADEA)• prohibits employment discrimination against any individual forty years of age or older.

– Pregnancy Discrimination Act (PDA)• Employees who are pregnant must be treated the same as other employees with similar

disabilities or limitations. An employer cannot refuse to hire a woman because she is pregnant nor may an employer terminate a woman simply because she becomes pregnant.

• If an employee is temporarily unable to perform the requirements of a job due to pregnancy, the employer must treat her like any other temporarily disabled employee

– State Regulations• Veterans Preference• State Certification Guidelines

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Manage Employee Benefit Programs

• The most important and overlooked aspect of employee benefits administration is communicating the value of these benefits to staff

• Benefits can average 25-30% of total compensation for most entities

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How to communicate Benefit Information

• Personalized statements sent periodically to each employee showing the employee’s salary and an itemized list of the benefits available to that employee and the entity’s cost to provide those benefits

• Benefit booklets written so that they can be easily read and understood by the employee

• Periodic meetings to review changes in coverage utilizing insurance company representatives to explain coverage, answer questions, etc.

• Orientation programs for new employees

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• All school administrators should have a basic understanding of the value and coverage offered through their entity’s benefit package. They should be able to direct employee inquiries to the appropriate staff person who can answer specific questions. Areas in which staff members must be knowledgeable include:

• Eligibility requirements for all insurance coverage• Rates for all insurance coverage• Co-payment amounts, if applicable• COBRA regulations• Eligibility requirements for PSERS• Basic understanding of all coverage provided• Amounts and procedures for calculating vacation days, sick

days, personal days, etc.

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Manage Accounting Functions

Brenda R. Burkett, CPAChief Financial Officer

Norman Public Schools, Norman [email protected]

Manage Payroll Functions

• The greatest portion of the price of education is concentrated in the form of personnel

• Education is labor intensive• Personnel costs make up 80-90% of

most school budgets

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Personnel Costs• Personnel costs are the single most

expensive (and most important) item in school budgets

• After estimating enrollment and envisioning programs, costing out salaries is the next most important task in successfully balancing revenues and expenditures

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Determining Staffing Needs

• Enrollment drives staffing• Ability to properly determine staffing

needs is a function of organizing and using information about the district and its current and prospective staff

• Projections indicating a need for new staff require budget input

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• Hiring decisions must be coordinated with the budget office, which must find money for salaries

• Must determine if budget constraints will allow for additional staff to be hired

• If so, consider whether the district should hire beginning teachers or whether it can afford more experienced staff

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Data Input• As the hiring decisions are made, and

the staff member’s payroll information is processed, it is critical that data be correctly entered into the payroll system

• There are many items pertaining to compensation that must be accurately keyed into the system, for a person’s pay and benefits to be correct

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Compensation• Employee compensation includes

negotiated benefits such as teacher’s retirement and various kinds of insurance

• Compensation also includes employer costs for workers’ compensation coverage, unemployment insurance, and social security

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Pay Tables And Deduction Codes

• One of the most critical functions of the payroll office is to ensure that pay tables and deduction codes are set up and entered correctly into the software

• It doesn’t matter if you’ve entered the staff person’s correct pay step into the computer. If the pay step amount is not correct in the computer, underpays or overpays will occur.

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Pay Tables And Deduction Codes

• Deduction codes and the correct percentages should be entered and double checked for accuracy

• Retirement payments into the Teachers Retirement System, and taxes paid to the IRS, are dependent on accurate percentages being set up in the payroll software

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Benefits/Other Compensation

• Leave Benefits: There is often time away from the job not deducted from pay, including sick leave, bereavement leave, and personal leave

• Other Comp: Direct and indirect compensation such as overtime pay, supplemental salaries, and performance pay may also occur

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• Leave balances available to employees are handled either by regular accruals, or by days given on an annual basis or some other benchmark in the employment process

• A system must be in place for all leave requests so proper reduction of leave balances occurs, or pay docks are processed, if no leave is available

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Checks and Balances• Payroll oversight entails making sure

that the amounts paid are correct, and that the benefit calculations are accurately figured

• Deduction registers should be scrutinized for reasonableness

• Random sampling should be performed to check % calculations

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Salary Payment Options• There are many different categories of

employees that work in a school system, and often their start dates and contract days vary

• Many districts require 10 month employees receive their annualized pay over 12 months, to handle monthly insurance premiums or annuity deductions that continue on a year-round basis

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Salary Payment Options• Summer checks run in June (July and

August checks that are for salaries to be charged in current fiscal year) will have taxes, retirement payments and other deductions withheld

• Payment of these deductions require close supervision to ensure paid in the right month and paid by certain deadlines

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Manage Accounts Receivable

• The purpose of Accounts Receivable is to track revenues that are not yet received by the District

• Procedures should be set in place to accumulate, categorize, report and control revenues due the district

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• Procedures and practices should remain the same across time and reports. If differences occur, they should be due to substantive differences in the events and conditions reported rather than because of arbitrary accruals

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• The Accounts Receivable function can provide a method for accruing revenues earned for a certain period, for consistency and comparative analysis to that same period the year before.

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Revenue Applications

• Revenue and Accounts Receivable applications should be designed with superior and flexible functionality to generate, maintain, inquire, collect and report on revenues earned

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MANAGING ACCOUNTING FUNCTIONS

Presented by Brenda Burkett and Ann Williams

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Brenda R. Burkett, CPA, CSBAChief Financial OfficerNorman Public SchoolsNorman, OK

Ann C. Williams, MBATreasurerBradley Bourbonnais CHSD #307Bradley, IL

Agenda

4/28/2016 56

•Manage Payroll Functions •Manage Accounts Receivable •Manage Accounts Payable Process •Manage Purchasing Procedures •Manage Annual Budgets •Prepare Financial Reports•Manage Cash Flow

Managing Payroll Functions• The greatest portion of the price of education is

concentrated in the form of personnel• Education is labor intensive• Personnel costs are the single most expensive (and

most important) item in school budgets• Personnel costs (salary and benefits) make up 70-90%

of most school budgets• After estimating enrollment and envisioning programs,

costing out salaries is the next most important task in successfully balancing revenues and expenditures

4/28/2016 57

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• Enrollment drives staffing• Ability to properly determine staffing

needs is a function of organizing and using information about the district and its current and prospective staff

• Projections indicating a need for new staff require budget input

4/28/2016 58


• Hiring decisions must be coordinated with the budget office, which must find money for salaries

• Must determine if budget constraints will allow for additional staff to be hired

• If so, consider whether the district should hire beginning teachers or whether it can afford more experienced staff

4/28/2016 59

Payroll-Compensation• Employee compensation includes

– Salaries– negotiated benefits (i.e. teacher’s

retirement and various kinds of insurance)

• Compensation also includes– employer costs for workers’

compensation coverage, unemployment insurance, and social security

4/28/2016 60

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Payroll-Data Input• As the hiring decisions are made, and the

staff member’s payroll information is processed, it is critical that data be correctly entered into the payroll system

• There are many items pertaining to compensation that must be accurately keyed into the system, for a person’s pay and benefits to be correct

4/28/2016 61

Payroll-Pay Tables And Deduction Codes

• One of the most critical functions of the payroll office is to ensure that pay tables and deduction codes are set up and entered correctly into the software

• It doesn’t matter if you’ve entered the staff person’s correct pay step into the computer. If the pay step amount is not correct in the computer, underpays or overpays will occur.

4/28/2016 62

Payroll-Pay Tables And Deduction Codes

• Deduction codes and the correct percentages should be entered and double checked for accuracy

• Retirement payments into the Teachers Retirement System, and taxes paid to the IRS, are dependent on accurate percentages being set up in the payroll software

4/28/2016 63

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• Leave Benefits: There is often time away from the job not deducted from pay, including sick leave, bereavement leave, and personal leave

• Other Comp: Direct and indirect compensation such as overtime pay, supplemental salaries, and performance pay may also occur

4/28/2016 64


• Leave balances available to employees are handled either by regular accruals, or by days given on an annual basis or some other benchmark in the employment process

• A system must be in place for all leave requests so proper reduction of leave balances occurs, or pay docks are processed, if no leave is available

4/28/2016 65

Salary Payment Options• There are many different categories of

employees that work in a school system, and often their start dates and contract days vary

• Many districts require 10 month employees receive their annualized pay over 12 months, to handle monthly insurance premiums or annuity deductions that continue on a year-round basis

4/28/2016 66

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Salary Payment Options• Summer checks run in June (July and

August checks that are for salaries to be charged in current fiscal year) will have taxes, retirement payments and other deductions withheld

• Payment of these deductions require close supervision to ensure paid in the right month and paid by certain deadlines

4/28/2016 67

Checks and Balances• Payroll oversight entails making sure

that the amounts paid are correct, and that the benefit calculations are accurately figured

• Deduction registers should be scrutinized for reasonableness

• Random sampling should be performed to check % calculations

4/28/2016 68

Payroll-Best Practices– Verify contract amounts by requiring

signature annually from all staff members

– Audit annual contract amounts – Verify data input from the salary

schedule– Verify deductions for benefits, taxes,

etc.– Audit every hourly payroll (determine %)– Submit (and evaluate) monthly overtime

report to BOE4/28/2016 69

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Manage Accounts Receivable• The purpose of Accounts Receivable

is to track revenues that are not yet received by the District

• Procedures should be set in place to accumulate, categorize, report and control revenues due the district

4/28/2016 70


• Procedures and practices should remain the same across time and reports. If differences occur, they should be due to substantive differences in the events and conditions reported rather than because of arbitrary accruals

4/28/2016 71

Revenue Applications

• Revenue and Accounts Receivable applications should be designed with superior and flexible functionality to generate, maintain, inquire, collect and report on revenues earned

4/28/2016 72

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Best Practices-Accounts Receivable

• Review student accounts quarterly• Review transportation expenses to

ensure homeless expenses are shared (when applicable)

• Review joint agreement contracts regularly

• Track and report oustanding revenue from previous fiscal years

4/28/2016 73

Managing Accounts Payable

• Spot check vendor list regularly• Use invoice numbers to prevent

duplicate payments• Scan payments to look for obvious

errors• Audit bills that may frequently have

errors– phone bills– FedEx/UPS

Attorney bills4/28/2016 74

Purchasing• BID or RFP?• Review the bidding process for your state

– Is public notice required?– Require sealed bids– Is a public bid opening required?– Consider the lowest RESPONSIBLE bidder-one who

conforms in all material aspects to the requirements and criteria set for in the invitation to bid

• Consider a Request for Proposals– Attorneys, architects, auditors, etc

• Vendor relations

4/28/2016 75

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Purchasing-Bidding and RFP

• Specifications• Vendor selection• Bid/RFP opening• Bid analysis• Board approval

4/28/2016 76

Purchasing-Best Practices

• Consider electronic purchase order process

• Request Net 60 or 45 rather than 30• Inform vendors of board meetings

date• Don’t buy out of a catalog until you

look online

4/28/2016 77

Managing Annual Budgets• What type of budget works best for

your district?– Line item– Function level– Program based– Zero based

4/28/2016 78

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Zero Based Budgeting• What is a zero based budget?• What are the benefits?• Debt reduction plans

4/28/2016 79

Budgets• What does “budget” mean to your district?• What is it’s purpose?• Are amendments acceptable? If so, when?• Four elements

– Planning– Receiving funds– Spending funds – evaluating results

4/28/2016 80

Building budgets con’t

• Enrollment Projections– ADA-average daily attendance (used in IL)– ADM-average daily membership– Projection Methods

• Trend analysis• Cohort survival

– Personnel Projections• The single most important and expensive

resource in schools• Student/teacher ratio is critical to quality and

costs. Why?• Would you use student/teacher ratio to calculate

all positions in a district? Why or why not?• What type of adjustments might be required for

small or large schools?4/28/2016 81

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Building budgets con’t• Estimating expenditures

– Identify programs and functions– Determine types and quantities of

resources needed– Estimate costs of each program or function– Consider the teacher contract

• How much schedule movement can you anticipate?

• Is there a new Master’s program in town?

4/28/2016 82

Budgeting Adjustments• In order to balance the budget, we must

deal with three types of adjustments– Budget reductions– Budget increases– Budget shifts

• Two types of budget reductions may occur due to…– Cost savings through improved efficiencies– Cost reductions due to program reductions

4/28/2016 83

Budgeting adjustments con’t

• Continuum for budget reduction– Obtain reduced prices for services– Increase productivity– Defer spending– Make across the board cuts– Eliminate “non-essential” services– Reduce instructional positions and

programs

4/28/2016 84

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• Reductions through improved efficiencies– Energy conservation– Risk management– Purchasing– Privatization– Training for operations/support staff– Deferral of expenditures– Use of more efficient equipment– Early retirement plans– Lower salary increases– Lower cash carryover (working cash)

4/28/2016 85


• Budget reductions due to program reductions– Reduce instruction staff– Reduce course offerings– Reduce support staff– Reduce non essential services

4/28/2016 86


• Reductions are inevitable, but how can we increase revenues to avoid cuts?– Charge for services provided

• Facility use by others (pool, auditorium, etc.)• Parking

– Charge for non academic services• Transportation (if not mandated)

– Private sector support– volunteers4/28/2016 87

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Manage the Budget• The budget is “done”, what now?

– Compare budget to “actuals”• Are actual expenditures within the budgeted

amount?• How much is left to spend?

– Look at encumbrances• Defined-obligations in the form of purchase

orders, contracts or salary commitments chargeable to an appropriation and for which part of the appropriation is reserved

4/28/2016 88

Financial Reports• Consider the Budget at a Glance…..

4/28/2016 89

Managing Cash Flow• Determine cash on hand requirements• Cash on Hand = projected estimate of the

number of days a district could meet operating expenditures provided no additional revenues were received.

• Review historical cash flow patterns• Evaluate anticipated changes in patterns

(recession)• Establish Board Policy• Create plan to build fund balances over time

4/28/2016 90

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Cash vs. accrual• Cash

– Recognizes revenue when received– Recognizes expenses when paid

• Accrual– Recognizes revenue before it is received– Recognizes expenses when they are

incurred• Which method is better for your

district? Why?4/28/2016 91

MANAGING ACCOUNTING FUNCTIONS

Presented by Ann Williams

4/28/2016 92

• Serve as a School Leader • Review Financial Impact of Strategic

Planning Goals• Develop Financial Goals • How Bond Sales Work• Develop Outside Funding Sources • Develop Multi-Year Forecast • Estimate Real Estate Property Tax Revenues

4/28/2016 93

Agenda

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School Leadership• As a school leader, our role is to…..

– Educate the community and the staff on the fiscal condition of the district

– Represent the district at all times• During the school day• With the media• On the weekends in the grocery store

– Implement best practices in all areas of operation

• Nutrition programs• Transportation• Business Office4/28/2016 94

Marketing the Budget• What is marketing?• Who is the budget's marketing

audience?• After the budget document has been

created, it must be presented inside and outside of the organization

• Primary purpose of budget presentation– To explain the contents

To explain the why’s4/28/2016 95

Marketing the budget con’t

• Working with the media• Community relations

– Employ a customer focus• know your audience

– Develop basic operational strategies• Market long term, all year long• Create a citizen’s task force (opinion shapers)• Integrity-don’t make promises you can’t keep!• School staff (ambassadors to the community)• Emphasize education• Be effective!

4/28/2016 96

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Financial Impact of Strategic Planning

• Create a strategic financial plan committee– Review district’s mission– Review district’s strategic plan

• Link financial goals to mission and strategic plan

• Create a financial profile of today and tomorrow– Revenue to expenditure ratio– Revenue to Fund balance ratio– Days cash on hand

4/28/2016 97

How Does a Bond Sale Work?

• Administration contracts with a bond consultant to issue bonds.

• Interest rate is negotiated • After bonds are sold, the district receives

the current cash value of bonds.• District pays the bonds back with interest

over a specified period of time

4/28/2016 98

What Are the Three Leading Types of Bonds?

• Life Safety– Used for state approved projects– Subject to debt repayment limit– No referendum needed

• Working Cash – Used to generate revenue which can be loaned or transferred to

Education, O & M, Life Safety and Transportation– Subject to debt repayment limit– Backdoor referendum

• Building– Land, building and equipment costs for new facilities or

renovations/additions– Requires a referendum

4/28/2016 99

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Why are bonds considered revenue when they are repaid like a loan?

• Districts can add to their tax levy to pay back bonds.

• Taxpayers contribute additional dollars to cover the bond payments

• Incoporporate an explanation of the district’s bonds into your annual tax levy presentation

• It’s critical that districts communicate the impact of bond issuance over the term of the bond period

4/28/2016 100

Other Borrowing Non-Referendum Options

• Tax Anticipation Warrants– “Credit card debt”– For short term cash flow needs– Issued against anticipated property tax

income– Maximum of 85% of total tax levied

4/28/2016 101

Other Potential Funding Sources

• Business partnerships• District Foundation• Athletics• Other non academic services (pool,

auditorium, etc.)

4/28/2016 102

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Estimating Property Tax Revenue

• Review revenue for previous years and analyze patterns

• Consider anticipated changes– TIFs– New construction (or lack of)– Collection rates

4/28/2016 103

This is your break

See you back in 15 minutes!

104

Conduct Financial Planning and Analysis

Ellen R. SkovieraLeander ISD, Leander , TX

September 24, 2010

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Serve as School Leader• Represent the district on financial

matters• Community• Budget• “Data-driven” analytical resource• Legislature• Bond ratings

106

Some reflective questions

• What does it cost us to reduce by one child per elementary/middle/high school? What is your overall teacher-pupil ratio? How does it compare to similar districts?

• How do your function costs compare to other similar/state/provincial districts

• How do your budget expenditures tie to the organization’s stated mission?

107

Leadership• “You are a fund balance manager”• Ready access to various data services• Awareness of financial trends in your

state, province, or region• Long term planning- multi-year projections• What are the demographic trends being

seen in your district, and what are the cost implications?

108

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Legislation• How often does the governing legislature

meet?• Is your state/ province financial system

stable or constantly being changed? What data resources are available to you?

• (Good chance for a brainstorm: what are your best sources to know what to expect? Share with the group)

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Impacts of Legislation(example, email from 9-21-2010

U.S. Municipal Focus: The Implications of the Basel III Proposals for Municipal Issuers

Basel III is one of the important global regulatory reforms being advanced in response to the credit and financial crisis of the last few years. Regulators are recommending heightened capital and liquidity requirements both as to amount and quality. As Chris Mauro of RBC Capital Markets’ Global Research writes in this report, those requirements, however well-intended, will directly impact the cost of credit enhancement for municipal issuers of variable rate demand notes. I believe you will find his analysis thoughtful and timely for any involvement in this market. Please click here to access the full report.

www.rbccm.com/municipalfinance 110

Presenting your districtThis image cannot currently be displayed.

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Presenting your district

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Presenting your district

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Financial Impact of Strategic Planning Goals

• Know ahead of time what a program is likely to cost

• Involves working closely with program developers, particularly Curriculum

• An example:• Science scores need to improve• Pilot run, funded at $120,000 to provide

regular rotation of science kits by grade level

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Example of Budget Costs for Strategic Objective: Improve

Science Scores• Added Science materials Center Manager• Purchased building• Purchased initial start up supplies for kits,

expanded each year • Courier cost was absorbed in current mail

delivery model• Science scores show great improvement at all

levels

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Sample Goal: Want latest technology for students

• Operational definition: “Latest” (Best? Newest?)• TCO: Total cost of ownership (CoSN model)• What are the direct costs of the goal?(Teacher

training? Other staff to support the equipment? R and D to identify the proper technologies, space (small classrooms?), computer(s) and peripherals, supplies-more printing, for example (paper, toner), training, energy, opportunity cost—what else are we giving up?

116

Develop Financial Goals• Operating cost per student• Cost of instruction as a percent of dollar• Cost of teacher starting salaries to be highest

in region• Fund balance policy, if not prescribed by law• Cost of support (metrics:cost per square foot

to maintain, clean, landscape)• Long-term strategies: 10 year facilities plan

117

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Other Financial Goals• Does the Board wish to control its tax rate

against any given benchmark?• Long-term replacement plans (buses, copiers,

technology refreshment, musical instruments)• Construction of facilities: cost to construct,

life cycle costs, green initiatives (LEED)• For each area or program, what are the costs?• For example, do you pay more for staff

development, but have lower turnover as a result? It is more than just the metric

118

Evaluate funding options for debt management

• Typically, highly regulated…you need an attorney and a financial advisor

• Bond programs require a long-term strategy• Including community involvement, education,

identification of essential projects, recognition of failing existing building systems (roofs, HVAC, e.g.), Informational materials for the general community, tax election

• Lease vs. Buy (consider state aid funding mechanisms)

119

Funding Options for Debt Management

• The following are various forms of securities, which may not be legal in your state or province

• General Obligation Bonds• CIBs (Current Interest Bonds• CABs (Capital Appreciation bonds)• RANs and TANs (Revenue and Tax Anticipation Notes-not for

raising capital, only for cash management)• Leasing (may or may not be legal in your state/province)• Budget Notes, Public Property Finance Contractual Obligations

(PPFCOs), Lease Revenue Obligations (public facility corporation is created which issues)

• Time Warrants• Maintenance Notes, Delinquent Tax Notes, Stadium Revenue

Notes, Refunding Bonds

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Lease vs. Buy• Calculate the total cost of ownership• Calculate the cost of leasing• Which is a better economic value?• Which poses more risk? (for example, if

you lease, what happens if your budget cannot sustain?)

• NON-APPROPRIATIONS clauses-include in all contracts

121

Contract Management as Financial Tool

• Central review of all documents which bind the district

• Does state/province have a caveat emptor or caveat vendor philosophy? Include venue, hold-harmless restrictions, restrictive covenants

• Be sure that someone does not “lease” what is actually a lease-purchase capital acquisition

122

Develop Outside funding sources

• Financial Advisor • Grants- cost/benefit analysis

(monitor cash request submissions)• Donors• Foundations (MOUs)• Fund Raising (internal controls)

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Analyze Economic data• Annual schedule of economic announcements• What is your region’s primary industry?• What is housing doing in your region?• Are there any tax-credit housing

developments being started?• Consumer confidence• Interest rate projections• Unemployment rate

124

Economic Factors• Slower housing may lead to slower

growth in enrollment• Tax-credit developments may lead to

higher school nutrition program eligibility (U.S.)

• Unemployment may key slower tax collections (what are you using for collection rate?)

125

Analyze Demographic Date

• What is your cohort survival at each grade level?

• Are your lower grades more populous than your higher grades?

• What is your free/reduced percentage over time?

• Are you enrolling more harder-to-educate youngsters? What impact will that have on your costs?

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43

Analyze your Demographic Data

• Housing: any new starts? Foreclosures?• From city planning departments: Plat

approvals• Inventory of homes: size in square feet,

number of bedrooms, starter vs. move-up,• Apartments• “Recycling” of neighborhoods (children grow

up, house sells, new family with new children)

127

Develop multi year forecast

• Use Excel as an easy tool for this• Identify major budget drivers: enrollment,

property value, income (if part of the state aid equation)

• Identify major budget costs:• Personnel (staffing ratios) , Operating metrics

(cost per square foot or student or ‘x’)• Other: energy, support costs, equipment

refreshment

128

Multi-Year Forecasting• Important to understand how various

components affect your state aid calculations

• Look at least three years ahead on your debt rate, do you need to smooth it out?

• If operating rate is concern, look at combination of both tax rates (debt and operating), consider timed application of fund balance, if available

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Multi-year forecasting• Develop and share replacement schedules with

Board (action, where applicable)• Develop and share staffing ratios with Board• (action, where applicable)• Examples: 1:22 k-4, 1: 27 at 5th, 6 teachers to

150/team at middle school, 30 per class at high school (watch core class enrollments)

• Examples: Buses, 200,000 miles or 15 years, Band Uniforms, every 8 years

130

Multi-year forecast

131

132

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133

Estimate Real property Tax Revenues

• Maintain long tem collection data, and couple it with economic health indicators in your area

• Are there any changes to the formula that will affect your collections?

• If you have disabled, senior, or portability exemptions, is there any new development that might cause an increase in exemptions?

• Is the Board considering any economic development strategies that will impact your collections (P.I.L.O.T agreements, for example)

134

Tax Collections• Know the local tax office officials• Have there been any property value

appraisal studies?• Based on longitudinal data, estimate tax

collections. Consider last three years, last five, last ten. If the economy is changing, shorten the comparison years.

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End of Financial Planning and Analysis Module

Questions?

136

Conduct Budgeting and Reporting Activities

Ellen R. SkovieraLeander ISD

September 21, 2010

Budget at a Glance• Where does your money go?• % salaries• % operating costs (facilities, energy)• % transportation• % staff development• % technologyWhat are your biggest items?

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Comparison Districts• How do your data compare to other districts in

your region or state/province?• Benchmark districts: who is best in class, and

how do you compare?• Brainstorming: What sources do you use for

such metrics?• B R A IN S T O R M R E S O U R C E S-we will

tabulate and send a list to all participants• Example: Just for the Kids (AR and TX)• http://www.just4kids.org/en/texas/higher_performing/elementary_schools.cfm

139

Project Student Enrollment

• Various Means• www.uaps.ucf.edu/enrollment/files/susdataworkshop25july

2006.ppt• Cohort Survival

• Other resources:• http://www.isbe.state.il.us/research/pdfs/public_school_en

rollment.pdf (projects Illinois enrollments through 2013)• http://www.proximityone.com/cgi/regsd.pl

140

Managing Risk In Schools

Brian N. Moore

Plan, Prepare, Protect

48

What will we cover?• What is School Risk

Management?• How do you perform

a Risk Audit?• How to follow up a

risk audit?• How to analyze

available insurance options.

• Some help!

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School Risk Management for Dummies!

The process of analyzing the risks to the health and welfare of our students and staff then finding ways to effectively mitigate that risk!

The process of analyzing the risks to the stability and well being of our physical assets, our schools and finding ways to mitigate them.

Making intelligent financial decisions regarding how to best manage that risk.

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What is a risk audit?It is an exercise in history and predicting the future.

A risk audit begins with a historical analysis of incidents that have occurred in your schools, including Workers Compensation Claims and Incident Reports.

What happened and when?

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49

Predicting the future?Perform a trend analysis!• Look at weather or

flood predictions.• Review long term

community growth trends.

• Review crime statistics and discuss possible future trends.

Flood Data From NOAA

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What’s Next?Mitigation Planning• Review ways to reduce

risks associated with historical or possible future threats.

• Purchase products or create policies to reduce risks associated with operating a school.

• NEVER STOP! The cycle continues!!!

146

Insurance ManagementOutside Insurance Firms• Review available options

from commercial business insurers.

• Allow them to help provide you with a risk assessment!

• Don’t trust the agent who tries to sell you flood insurance for your school on TOP of the Mountain!

Self Insurance• What are the risks?• What is your current

Situation?

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Other Options?

• Insurance Pool?• State Office of

Insurance?• Combination planning.

• Legal insurance.

148

School FacilitiesIf you build it..They will come!

Brian N. MooreSupervisor, Public Safety

Red Clay Consolidated School District, Delaware

What would school look like without walls?

150

51

So we know we need walls!

• We will review how we plan our schools.• How do we maintain our schools?

• How do we build new schools?

151

You need a plan!• How many schools

do you need?• How many schools

WILL you need?• How many schools

do you have?• How long will the

schools that you have last?

152

Did you know?• The average age of a

school in the US is 42 years old!

• 1927 new schools were opened in 2008.

• 2120 schools were closed!

• Public school enrollment is expected to increase by 12% before 2017.

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How do we maintain them?

• A strong maintenance team is necessary to extend the service life of schools.

• Focus on preventative maintenance, use electronic work orders.

• Perform life cost analysis rather than the early savings!

154

Train your team.• They must focus on

good work skills.• They should have a

strong sense of ownership in the facilities.

• They can be a key resource for any energy saving initiatives!

155

Build your next school!• Once you know that you

need a new school.• Where can you build it?• How much money will it

cost too build?• How will you pay for it?

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Marketing for school facilities.

• Use your parents as key stockholders!

• Sell your School Board.• Sell your elected

officials.• Sell your voters or the

public!

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Once you pass a bond or budget funding

• Find the right architect.

• Decide what construction model you would like to use: Managing Architect versus Construction Manager.

• Begin planning!

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What else?• Outside groups

using school facilities.

• Recreational and sports facility management.

• Green cleaning initiatives.

• IPM programs.• Energy purchasing

and conservation programs.

• Life safety management programs.

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Where can I learn more?• ASBO School Facilities Committee

• National Clearinghouse for Educational Facilities.

• Facility Masters Program.• Just ask me!

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Manage Information Systems

Ellen R. SkovieraLeander ISD, Leander, TX

September 24, 2010

Assist in Developing Technology Plan

• What is the district’s Technology Vision?• What is desired for children to use and to

know?• Roles include automational,

transformational, communications, efficiency

• “Mission critical”• What is mandated?• What does it take to get there?

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Consider:• Infrastructure, telecommunications (e-rate)• Training of staff (critical!)• Equipment standards and refreshment• Accessibility of printers to classrooms (cost factor)• Standardization of software• Disaster and recovery (share with other schools?)• Business interruption insurance

163


• High degree of attention needs to be placed on security

• Secure versus non-secure sites• Many textbook companies are offering

online textbook enhancements, but the sites are not secure: FERPA and privacy concerns

• National Education Technology Plan3d2know.cosn.org/presentations/DDDottawa.pptwww.classroomtco.org

164


• Open source computing vs. proprietary software• Cloud computing• ...a model for enabling convenient, on-demand network

access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models. (NIST definition)

165

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CoSN Checklist for Efficient Operations

• IT Asset Management• Manage software licenses repurpose minimally used

computers: Some computers are used more than others. Certain software applications are no longer used, or they’re not installed on all of the systems for which they are licensed. It is prudent to make sure that computers (including servers) are located where they are needed most and licensed only for the software actually in use. An IT asset management application can monitor this use over the network, evaluating usage results over time.

166


• Help Desk and Centralized Support Tools• Technical support consumes time and money when technology

professionals must travel from building to building to maintain equipment, troubleshoot problems and support end users. With already stretched staffs and more staff reductions in the offing, it’s a good idea to find a way to support users more efficiently.

• Automated, remote support from a centralized help desk is an answer. Centralized user support requires tools to view and control computers remotely. This approach to problem management does have some up-front costs, but it provides the opportunity for efficiencies over the longer term, while maintaining user satisfaction by effectively managing responses to support requests. A vendor-provided centralized support ROI calculator can be found on KACE's website.

167


• Computer Refresh Cycle• During times of economic stress, one of the budget areas that receives scrutiny is

the IT capital budget and the computers scheduled for replacement. Leasing…

• Direct and Indirect LaborWhile looking into reducing time computer support techs spend traveling through centralized support techniques, it is also important to ask, "Who is providing direct labor services?" Direct labor includes all personnel who have as at least part of their responsibility to provide computer support or other computer services. This may include external providers, teachers, aids, school-based techs who don't report to the IT organization, as well as the computer services organization. Is your current support structure as effective as it can be? In many cases it doesn't make sense to pay teachers, who are not trained as techs and are more expensive, to provide user support services.

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• Computer, Server and Network Consolidation• Server Consolidation and server virtualization reduce complexity,

OS and other software licenses, and power usage. This process involves up-front planning and some initial investment, but can result in significant savings. This topic is covered under "Other Resources" and in CoSN's Green Computing Leadership Initiative.

•• Networks: A district telecom system typically consists of data

lines from campuses to the central office and connection to the Internet, plus internal and external voice communications and often security and clock synching networks. The external voice connections through the local telephone company can add up to a significant cost, as do Internet access lines and Internet service provider (ISP) charges. A study of VoIP costs and savings should be considered, as well as consolidation of the data networks.

169


• Number of Supported Operating Systems and Applications• A broad mix of desktop, laptop and server operating systems requires a broad mix of

support talent and complicates system integration and network management. This is not to say there should be only one operating system. More than one client and one server operating system however, that supporting multiple OS versions also could be more costly in terms of support talent and system/network integration issues.

• Printing• Printing and copying can be major expense that include hardware, ink or toner

cartridges, energy and paper costs. It’s important to evaluate your current printer inventory: How many and what type of printers and copiers are connected to computers and on the network? Operational costs can be drastically reduced by replacing individual other inkjet printers in favor of strategically located print/copy centers. Implementing electronic forms for staff and school board use can also reduce the cost of printing. Some of these issues are covered in CoSN's Green Computing Leadership Initiative.

•http://www.cosn.org/Initiatives/ClassroomTotalCostofOwnership/Checklist/tabid/5126/Default.aspx

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Maintain Technology and Telecommunications systems

• Platform decisions-cost and complexity• Staffing ratios for support - fixing and teaching• R&D: emerging trends and technologies• Cloud computing, in-house programming, open-source• VoIP, POTS• Refreshment cycles, and how funded• E-rate decisions• Security policies, spam filtering, content blocking

172

Maintain Technology Systems/Oversee

Telecommunications systems• Capacity should always be measured: when

will you need more (ports? shelves? band width?) Conduct predictive exercises

• Planning for capacity is multi-year effort (budget and bonds)

• License compliance• Acceptable use policies, employment

consequences• Policies on social media-risks and benefits

173

Manage Technology and Telecommunications Systems

• Staffing: expertise and staying competitive with market• Preventive Maintenance schedules• Service Level Agreements• ITIL• Responding to growing dependence on IT, the UK Government's

Central Computer and Telecommunications Agency (CCTA) in the 1980s developed a set of recommendations. It recognized that without standard practices, government agencies and private sector contracts were independently creating their own IT management practices.The IT Infrastructure Library originated as a collection of books, each covering a specific practice within IT Service Management. ITIL was built around a process-model based view of controlling and managing operations often credited to W. Edwards Deming and his plan-do-check-act (PDCA) cycle.

• http://en.wikipedia.org/wiki/Information_Technology_Infrastructure_Library

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175

Managing Information Systems

Questions?

176

Manage Ancillary Services

Brenda R. Burkett, CPAChief Financial Officer

Norman Public Schools, Norman [email protected]

60

Managing Ancillary Services• There is a tendency in society to see

the mission of schools as exclusively instructional

• The unfortunate outcome is other areas are ignored when they should also be valued for their role in providing equal opportunity and meaning to the social and educational mission of schools

178

Transportation and Food Service Programs

• Schools would be negatively impacted without these operations

• Every child has a right to a good education without regard for socioeconomic status

• Every child should be able to get to school without hardship and attend classes free from hunger

179

Transportation and Food Service Programs

• There is no equal opportunity when educational programs are physically inaccessible or when children are underfed

• All stakeholders in education should be concerned with organizing and operating efficient systems for transporting and feeding children.

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Transportation• These operations are large and complex

regardless of school district size• Urban districts use many buses to

transport thousands of students over short distances

• Rural districts also need many buses, despite low pupil population, to travel over countless open miles

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Transportation • Actual costs may be similar, and large

and small systems alike face issues of safety, insurance, and so on

• Billions are spent annually, making it a major industry

• Complex issues of liability, safety, and equal access

182

Transportation Function• No doubt one of the most visible

services in schools• Bright yellow school buses arrive in

front of homes of more than half of all school children each morning

• And the bus is often the last school contact of the day

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Transportation Function• Also involves taking students on field

trips and to athletic and academic events

• Also assist with other services such as special education

184

“When floors shine, the schools seem good”

• When buses are late or when problems arise, everything about schools seems suspect

• As a result, transportation is one of the most important and visible non-instructional activities of schools

185

Transportation Origins and Purpose

• Transportation and state financial support have been in existence since 1869

• Pupil transportation has had no choice but to grow as compulsory attendance, district consolidation, and the advent of motor vehicles have drastically affected society.

186

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Transportation Origins and Purpose

• A major role for transportation has also arisen from court-ordered desegregation plans revolving around forced busing

• More recently, magnet schools and year-round schools have added to the complexity of pupil transportation

187

Complexity of Transportation• Variables such as population density,

number of pupils to be transported, topography, road conditions, and length of routes affecting the size of buses on routes

• Movement of population within a community may create new transportation demands

• Racial integration may require new school attendance boundaries

188

Director of Transportation ServicesRequires a variety of talents and skills:• Ability to efficiently organize a large

transportation fleet and to consistently demonstrate human relations skills in working with personnel problems

• Skilled in decision-making to manage effectively

• Knowledge of diverse topics, including computer routing, budgeting, labor relations, inventory, drug testing, underground storage tanks, and hazardous materials

189

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Comprehensive Transportation Manual

• Document should be open to public, and in-service should be held with transportation staff to clarify the policies of the district

• Special emphasis must be given to driver training, pupil discipline, energy conservation, disability issues, public relations, bus routes, and bus schedules

190

Transportation Funding• Like other forms of state aid,

transportation aid varies in amount and distribution method from state to state

• Formulas include a variety of factors, such as expenditures per pupil, population density, bus capacities, matching grants, or some combination as common denominators

191

Transportation Funding• Some states provide a transportation

allowance based on hazardous walking conditions

• In some states, transportation aid is tied to the general fund formula

• One basic similarity: in most states, transportation aid almost NEVER covers the entire cost

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What other Transportation issues are relevant?

• Owning or Contracting• Computerizing Transportation

Services• Purchasing Buses• Maintenance and Safety

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Owning or Contracting• Contracting avoids the cost of buying

buses• Contracting avoids the high maintenance

cost of older buses• It’s argued that contracting lowers

capitalization costs, reduces personnel and administration costs, and provides greater efficiency through contractors whose sole business is transportation

194

Contracting Transportation

Counterarguments, however, include: • how to ensure quality performance by

a contractor when the district no longer controls the public relations aspect of the contractor’s behavior

• the need for insuring against liability for acts of contractors.

195

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District Ownership of Transportation

Arguments for district ownership:• Provides more flexibility, provides

selection, training, and supervision of transportation employees, and ensures control over changes in operational costs

196

Owning or Contracting• It may be that there is no one best

option for transportation, as the right choice may depend on a district’s financial position and the community’s attitude about this vital service

197

Computerizing Transportation Services

• Every year more districts are using computerized routing systems

• These plans are cost-effective in that they can apply mathematical formulas for routing efficiency

• Aid in mapping routes, including census data, highway time delay studies, and other manual data supplied

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Computerizing Transportation Services

• Software is even available to preplan routes in undeveloped areas in advance of actual population movement

• Computerized fleet maintenance is also common. Total costs and item costs can be accounted for instantly and used to make decisions about maintenance and disposal

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Purchasing Buses• Large outlays (over $50,000 per bus, plus

additional thousands for a bus with a wheelchair lift)

• Local districts use written specifications, usually based on state guidelines

• Especially complicated because they are purchased on separate chassis and body bids, but this provides both economy and specialization that can be used by manufacturers

200

Purchasing Buses

• Larger buses are more versatile, which in turn reduces the number of buses and staff.

• Smaller buses are used in sparsely inhabited areas or inner cities on crowded streets

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Maintenance and Safety• Maintenance, safety, and staff are

inseparable in any discussion of transportation

• Good drivers cannot offset bad buses, nor can new equipment offset bad drivers.

• Transportation utmost duty: To ensure student safety

202

Food Service Programs

• Like transportation, the food service function is a key to effective and efficient operation of schools

• Less visibly related to the primary mission of schools, but provides vital support to the instructional process

203

Food Service FunctionNeed to understand the following:• How it operates• How meal prices are set under

federal, state and local participation• How revenues and expenditures in

food service budgets are allocated

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Linking School Performance to Nutrition• Undernourishment due to poverty and

ignorance is still sizable in today’s era of economic progress

• Data exists that links poor school performance to nutrition

• The role of food service in schools has increased with time, as seen in the fact that most schools now have both breakfast and lunch programs

205

Food Service Funding• Long history of federal, state, and

local subsidies to supplement meal prices paid by children

• These sources make up the revenue side of food service operations and are highly interdependent

206

Federal Support

• Surplus commodities began to be used in school lunch programs in 1936

• Not long afterward, Congress enacted the National School Lunch Act authorizing grants to states to help provide food and facilities for school lunch programs

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State Support

• Individual state participation is harder to summarize because each state has been free to determine the extent of its involvement in the National School Lunch Act

• State funding is relatively small compared to federal spending

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Local Support• The local contribution is defined as

dealing with the leftover costs after fed/state revenues are expended

• The local role is thus one of determining how much, if any, the district wishes to further subsidize meals by shifting additional local tax revenue to food service

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Local Support• Leaving the unfunded part of meal

costs to the local district creates a heavy burden for schools, in that such decisions have moral and financial implications.

• If the district channels all unfunded costs to families, then some children may not receive the intended benefits of food service programs

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Local Support• If the district subsidizes meals from

tax revenues, a choice to reduce other program expenditures is often made.

• Costs, efficiencies, and all other aspects of operations are a function of district size and skill in directing food service operations. The number of meals and dollars becomes large very quickly.

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Relevant Issues• Often the biggest problem is rising

costs associated with purchasing and preparing foods such as supply price increases, labor costs, and equipment and facilities – all of which must factor into what the district ultimately charges for meals.

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Compliance Requirements

• Compliance is a common concern whenever outside aid is provided. Assurances are directed to the federal government in return for dollars and commodities

• Districts must assure states of compliance so the state can provide its own assurances to the fed govt

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Federal Rules and Regs

• Operate a nonprofit program – Only a 3 month operating balance may

be kept on hand and still be nonprofit• Serve meals that meet nutrition

requirements- Programs can offer single menu, fast

food choice menu, or a’ la carte menu

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Federal Rules and Regs• Price meals as a unit

– To count as reimbursable, meals must be priced as a unit. This does not prohibit single item sales

• Supply free and reduced meals– To eligible needy children

• Agree to avoid discrimination– No child may be refused because of

inability to pay, race, gender, or national origin

215

Federal Rules and Regs• Keep accurate records of income and

expenditures– Records are subject to intensive state

and federal audits• Complete a formal reimbursement

claim– Claims must be sent on a timely basis

each month to the state

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Federal Rules and Regs• Distribute applications for free and

reduced meals– Districts must actively inform each

student of the program• Review and act on F&R applications

– Parents or guardians must be notified regarding decisions

• Develop and implement verification procedures– A method of verifying accuracy of

applications must be followed 217

Federal Rules and Regs• Maintain accurate participation

records– The district must establish procedures

for obtaining accurate meal counts• Establish and implement purchasing

procedures– Purchasing procedures must comply with

state and federal regulations

218

Federal Rules and Regs• Use federally donated foods or

commodities– This includes the ability to store

commodities properly without spoilage• Approved programs provide meals

based on daily nutritional requirements– Must provide approx 1/3 of the

recommended dietary allowance (RDA)219

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Meal Reimbursements• To receive reimbursement, a lunch

must contain a set of specified components and menu items, where components are:– Meat or meat alternate– Vegetable and/or fruit– Bread or bread alternate– Milk

• The Goal is a balanced diet220

Food Service Management

• Options on types of mgmt systems best suited to a district’s needs:– Management companies– Centralized in-house operations– Decentralized in-house food service

• Careful cost analysis necessary since each has its benefits and problems

221

Management Companies• Use of outside management

companies centers around debate of whether it is more cost-effective

• The main reason many districts have decided to contract for food service has been a benefit stemming from fiscal and managerial efficiency

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Benefits to Contracting• Administrators have more time for

curriculum• Wage and benefit costs, disputes,

and grievances have been reduced because the district no longer handles personnel

• Menu planning is improved by use of food professionals

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Benefits to Contracting• In-house record-keeping

requirements are reduced• There is strong incentive for food

service to become a profit center with high client satisfaction

224

Contracting Services• Districts should take care to choose

from a list of reputable and experienced firms

• Should act from a set of bid specs to assist bidders in deciding whether to bid, as well as establishing the criteria for evaluating proposals

225

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In-House Operations• Centralize or de-centralize services• On-site food preparation vs satelliting

from central kitchens• Satelliting means delivering cooked food

with finishing kitchens on-site, in contrast to on-site food prep

• Major benefit is mass preparation and non-duplication of full facilities

• Concern could be loss of site control and responsiveness, and overstandardization

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In-House Food Services Director• Full time director highly trained to

assure the efficient and cost-effective operation.

• Needs skills to work closely with principals and central office, as well as supervising service workers

• Must work with district budget director, and provide leadership in setting meal prices

227

Managing Purchasing Process

• Accountability for public money is backbone of purchasing

• Procedures must be in place that focus on getting the best bang for the buck with taxpayer funds

• As long as procedures are outlined and followed, then substantiation for purchasing decisions will be in place

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How Districts Procures Goods and Services

• The District obtains quotes, at the appropriate dollar threshold, on items to be purchased and then creates purchase orders to award the contracts based on Board of Education approval

• Purchase order – legal authority to spend• Contracts - to delineate specific terms• Districts should purchase from responsible

business entities.

229

Purchasing Process• Bidding

– Public notice normally 10 to 20 days before

– All bids must be sealed– All bids must be opened during a public

bid opening where the contents are announced

– Bids should be awarded to the lowest responsible bidder who conforms in all material aspects to the requirements and criteria set in the invitation to bid

• Request for Proposals - often used for services

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Options for Purchasing• Quotes from vendors • State Contract pricing• National Purchasing cooperative

– US Communities– NJPA (National Joint Powers Alliance)

• allow participating governmental and municipal agencies to reduce the cost of purchased goods by leveraging their combined purchasing power.

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Wrap Up• Ancillary services are a vital contribution

to educational outcomes• Although often lacking in glamour, they

represent vast expenditure outlays and significant liability

• They are interrelated parts of a complete educational system. Each piece makes a vital contribution and can’t be slighted without significant harm to children

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