FINANCE

1
FINANCE

• COMPS PREPARATION
• STUDY GUIDE

2
California Statistics

• student demographics
• enrollment growth
• expenditures comp. with nation

3
Budget Estimation

• Expenditures enrollment projections (know
  factors going into these e.g. births,
  in-migration), new programs, salaries, (most
  impt.) student-teacher ratio (class size)
• Revenues enrollment, ADA, COLA, Categorical
  monies, lottery

4
Categorical Funds

• Categorical Funds are restricted funds for
  specific purposes only, from both the state and
  fed. govt. (Title I and Child Nutrition largest
  from Fed. govt),
• require greater restrictions (and input, e.g.
  parental for SIP).
• Block Grants Mega Item concept.
• Some encroachment for Spec. Ed., Class Size
  Reduction (also student transportation and food
  services).

5
Budget Process

• ongoing
• public hearing required
• most districts use line item budget for general
  fund
• historical/incremental process means using the
  prior year as the starting point
• Program budgeting PPBS complex process used in
  past, categ. funds use program budgets more often

6
Source of Income

• 2/3 or more of districts money comes from the
  state (counting redistributed property taxes its
  85 plus)
• 9-13 from
• Federal Govt
• The rest local

7
School Year length

• at least 180 days for pupils, Fiscal Year July
  1-June 30

8
Types of Districts in CA

• most are elementary

9
CBO

• Credential not required in CA. qualifications
• business operations,
• collective bargaining,
• accounting, economics

10
Funds

• General fund is largest and most active
  required for all districts includes both
  restricted and unrestricted revenues and
  expenditures (e.g. special education)
• there are others such as cafeteria, (also bond
  interest and redemption, building fund, deferred
  maintenance, adult education, child development
  etc.)

11
Taxation

• consumption tax (sales tax is example),
• property tax creates inequities
• Ad Valorem (know an example)

12
What districts can charge for

• Student transportation to and from school (except
  for indigent),
• not for textbooks and supplies or fees for
  extra-curricular activities (accord. to Hartzell
  v. Connell not on test)

13
AB1200

• why passed (imposes greater fiscal accountability
  and control on districts and county offices of
  education based on bankruptcy of some
  districts),
• County school superintendent reviews interim
  reports to check fiscal solvency (positive,
  negative, or qualified report)

14
Watershed Events in California School Finance

• SERRANO V. PRIEST - Calif. Supr. Court Case (1976
  orig. filed in 1968) that held the CA system of
  funding schools unconstitutional - because its
  reliance on property taxes made per pupil
  expenditures unequal. Court ordered that
  property taxes and per pupil expenditures should
  be equalized (within a 100 band)
• PROPOSITION 13 - An initiative proposition (1978)
  creating a constitutional amendment to limit
  property tax increases to 1 a year and limited
  increases on assessed value to 2 a year).
  Effect was to shift funding schools from local
  property taxes to state funding of schools (also
  cities/counties) Impact on schools - more
  dependent on the state economy
• PROPOSITION 98 - and its amendment Proposition
  111 A constitutional amendment to establish base
  minimum funding for K-14. It had four provisions
  and 3 tests modified by Prop. 111. . Prop. 98
  also modified the Gann limit. Impact on schools -
  guaranteed funding, also tied in to the state
  economy

15
Audits

• annual external audits required (also for student
  body funds),
• tells about financial condition, accounting
  methods, compliance laws

16
Revenue Limit

• Money received by a district (income) for
  general education from the state (general purpose
  money)
• Revenue limit is given on a per pupil (ADA) basis
• Made up of state funds and local property taxes
• Determined by a complex formula by the state
  legislature,
• Categorical aid is in addition to the revenue
  limit monies

17
Student Body Funds

• frequent problems in audits
• fund raisers to be approved by principal and
  student council
• value/purpose
• to function properly must have minutes of
  meetings, constitution (purpose of organization),
  policies/procedures for officers, fund-raisers,
  expenditure approval
• school boards have legal responsibility for
  regulations
• what are legitimate fund raisers not
  recommended are rummage sales, cant raise funds
  for what school district should buy (e.g.
  textbooks), raffles are illegal
• Food in Elem Schools to be sold only after the
  noon meal

18
Maintenance and Operations

• Maintenance repairs/replacement (grounds,
  buildings, equipment)

• Operations housekeeping/custodial to keep
  plants functional work order system advantages
  to keep track of hours and costs

19
Facilities

• age of CA school buildings over half over 30
  years old
• General Obligation Bonds- most often used method
  to raise funds
• Bonds State (requires simple majority, also for
  other state facilities such as prisons) and
  District bonds (require 55 majority), have been
  inadequate to meet the needs
• state building fund - year-round schools get
  incentives for construction funds

20
Food Services

• contracting out not necessarily better,
• is a separate fund,
• free/reduced lunch require record keeping,
• how to make self-supporting and avoid
  encroachment (not on test)

21
Reserve for economic Uncertainties

• 3 for majority of districts in CA (range 1-5,
  1 for LAUSD, 5 for small districts)

22
Lottery funds

• not major part of revenues (2-3 of districts
  budget)

23
Vouchers

• recent trends provide parents options, related
  to choice, political issue, critiqued as not
  being in accord with democratic (not party
  definition) tradition of public education in
  America

24
Budget Accounts

• Account codes are prescribed by the state and
  found in the California School Accounting Manual.
  Account codes have 6 elements fund/group,
  resource, project year, goal, function, and
  object/services.
• Expenditures are shown in the series 1000-7000
  1000s are certified personnel, 2000s are
  classified personnel, 3000s benefits, 4000s
  books and supplies, 5000s are services and other
  operating expenditures, 6000s capital outlay,
  7000s other outgo.
• Salaries and Benefits are the largest
  expenditures (85 ).
• Revenues are placed in 8000 series.

25
Budget forms and areas

• are prescribed by the CA Dept of Educ.
• are uniform across the state

26
Food Sales

• are restricted and regulated e.g. in elementary
  schools may be sold after the noon meal

27
Special Education costs

• 3-7 times higher than regular education student
  encroachment currently 20-25
• Federal and State funds

28
Glossary

• Review words in text, know especially these
• Employee Benefits
• Revenue Limit
• Second Period
• Attendance / P-2