Preparing 1st Interim Reports

1
Preparing 1st Interim Reports
November 1, 2005 Diane Lacombe El Dorado County
Office of Education
2
Welcome

• Introductions
• Facilities
• Materials
• Schedule

3
Outline

• School Accounting
• Elements of Financial Reports to Board
• Financial Summary/Budget Document
• - - - - - LUNCH - - - - -
• Elements of Financial Reports to Board (cont.)
• Board Certification
• Multi-Year Projection
• Cashflow Analysis
• Official SACS Forms
• Updating Data in Financial System (QSS)
• Planning Calendar

4
Interim Reports

• What is an Interim Report?
• A report of the districts financial status
  including revised projections and activity up
  through a certain point in the fiscal year
• Why do Interim Reports?
• Review financial condition of district
• Provide status report to interested parties
• Determine revisions needed
• Determine if district will meet financial
  obligations
• When to do Interim Reports?
• Lets look at the Basic Reporting Cycle

5
Basic Reporting Cycle

• Preliminary Budget July 1, 2005
• Note typically no state budget yet
• Revise budget 45 days after State of CA budget
  adoption if material revisions
• First Interim December 15, 2005
• Board approval by December 15 (for time period
  ended October 31)

6
Basic Reporting Cycle

• Second Interim December 15, 2006
• Board approval by March 16, 2005 (for time period
  ended January 31)
• Third Interim (optional) (April to June 2006)
• Required if qualified
• June update (optional)
• Most districts provide current year update with
  next year budget but OK to use 2nd interim

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School Accounting
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Fund Accounting

• Local Educational Agencies (LEAs) follow
  procedures in California State Accounting Manual
  (CSAM)
• Available online to view or download
  www.cde.ca.gov/fg/ac/sa/
• The function of all accounting systems is to
  present fairly and with full disclosure the
  financial position of a business in conformity
  with generally accepted accounting principles.
• LEA accounting systems are organized and operated
  on a fund basis. Accounting for LEAs is referred
  to as fund accounting.
• A fund is a fiscal and accounting entity with a
  self-balancing set of accounts.
• The financial transactions of LEAs are separated
  into various funds in order to permit
  administrators to ensure, and report on,
  compliance with the laws and regulations that
  affect LEAs.

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Categories and Types of Funds
10
Basis of Accounting

• Basis of accounting refers to when revenues,
  expenditures are recognized and reported
• Cash (not OK for LEAs)
• Modified Accrual (most funds)
• Revenues recorded when available and measurable.
  Liabilities recorded when incurred.
• Accrual (limited use)
• Revenues are recorded when earned and measurable.
  Liabilities recorded when incurred (includes
  depreciation)

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Allowable Funds

• 0160 GOVERNMENTAL FUNDS
• 01 General Fund/County School Service Fund
• 03 General Fund Unrestricted
• 06 General Fund Restricted
• 0920 Special Revenue Funds
• 09 Charter Schools Special Revenue Fund
• 11 Adult Education Fund
• 12 Child Development Fund
• 13 Cafeteria Special Revenue Fund
• 14 Deferred Maintenance Fund
• 15 Pupil Transportation Equipment Fund
• 16 Forest Reserve Fund
• 17 Special Reserve Fund for Other Than Capital
  Outlay Projects
• 18 School Bus Emissions Reduction Fund
• 19 Foundation Special Revenue Fund
• 20 Special Reserve Fund for Postemployment
  Benefits
• 2150 Capital Project Funds
• 21 Building Fund
• 25 Capital Facilities Fund

• 6170 PROPRIETARY FUNDS
• 6165 Enterprise Funds
• 61 Cafeteria Enterprise Fund
• 62 Charter Schools Enterprise Fund
• (new in CSAM 2005)
• 63 Other Enterprise Fund
• 6668 Internal Service Funds
• 66 Warehouse Revolving Fund
• 67 Self-Insurance Fund
• 7195 FIDUCIARY FUNDS
• 7175 Trust Funds
• 71 Retiree Benefit Fund
• 73 Foundation Private-Purpose Trust Fund
• 7695 Agency Funds
• 76 Warrant/Pass-Through Fund
• 95 Student Body Fund
• Not required to be reported to CDE however,
  these funds are required to be included in the
  audited financial statements to meet GAAP
  reporting requirements.

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Sample District Summary (about 3,000 students)
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General Fund

• The chief operating fund
• Used to account for the ordinary operations of
  the LEA
• All transactions except those required or
  permitted by law to be in another fund are
  accounted for in this fund
• Within the General Fund, restricted projects or
  activities must be identified and separated from
  unrestricted activities. The LEA has the option
  of using one general fund or of separating
  transactions into two general funds restricted
  and unrestricted.

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• General Fund Unrestricted and Restricted

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Standardized Account Code Structure

• SACS

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SACS codes/Resource/Goals

• SACS
• Standardized Account Code Structure
• Provide statewide consistent financial data to
  State and US Department of Education
• Complies with federal reporting requirements
• Ability to account for revenues and expenses by
  funding source

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RESOURCE Where the funds come from Restricted Unre
stricted Track required categorical
income/expenditures Track other activities with
special reporting requirements, e.g.,
Lottery Track locally restricted activities,
e.g., donations View each resource like a
separate business with its own set of self
balancing accounts
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CBO Leadership ROLE In reviewing financial
reports are RESOURCES BALANCED? Check to ensure
this has occurred Major problems if not done
properly Has direct support and indirect been
charged properly? Example - Your Director of
Fiscal Services provides you with a financial
report that shows the following
is this correct?
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Balancing Resources
CBO Leadership ROLE This is the detail you dont
see in financial reports Develop systems to
ensure that this type of reconciliation is
prepared and reviewed for reasonableness
20
Example Resource Balanced
is this correct?
can you spot the error?
21
Consequence of Error

• In the previous example, you would have
  overstated unrestricted ending balance by over
  25,000
• Other common errors
• Not tracking local donations/local sources
• Unspent dollars end up in unrestricted ending
  balance with no designated restriction
• CBO reports these dollars as available and the
  Superintendent and board spend the money
• CBO gets a big surprise when the PTA or Site
  Principal ask Where is the budget for the
  50,000 donation deposited in the prior year that
  they were planning on spending this year!

CBO Leadership Role - are systems in place to
track income and expenditures by resource?
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• PROJECT YEAR
• Primarily used for federal projects that cross
  fiscal years
• Federal Fiscal year
• October 1 to September 30
• Example for 2005-06 State Transaction Cycle (July
  to June)
• Federal grant expenditures might be coded as
  follows
• 5 (2004-05 federal year) July 2005 to September
  2005
• 6 (2005-06 federal year) October 2005 to June 2006

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• GOAL
• WHO Instructional and Community Programs
• Regular Education
• Continuation
• Adult Education
• Special Education
• CBO Leadership ROLE
• Are systems in place to appropriately track
  reporting of goal?
• Consequence of Error
• Special Education reporting maintenance of
  effort federal requirements

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• FUNCTION
• WHAT Primary operational area
• Direct Instruction to Pupils
• Support Services to Instruction
• Instructional Support
• Pupil Services
• Ancillary Services
• Community Services
• Enterprise
• General Administration (indirect pool)
• Plant Services
• Other Outgo
• Function field in conjunction with GOAL will be
  used to determine indirect cost

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• FUNCTION GOAL
• CBO Leadership ROLE
• Are systems in place to appropriately track
  function and goal?
• Consequence of Error
• Indirect rate under reported limits amount you
  can charge various categorical programs

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• OBJECT CODE
• Basic Categories of Expenditures (object codes)
• 1xxx Certificated Salaries
• Positions requiring credential (e.g., teachers)
• 2xxx Classified Salaries
• Positions not requiring credential (e.g.,
  instructional aides, bus drivers)
• 3xxx Benefits
• E.g., Retirement (STRS,PERS, Social Security),
  Health and welfare, unemployment, workers
  compensation
• 4xxx Books and Supplies
• 5xxx Operating Expenditures
• Travel, Conference, Contracts, Operating
  Expenditures, e.g., electricity, telephone
• 6xxx Capital Outlay
• Typically capital outlay purchases over 5,000
• 7xxx Other Outgo
• E.g., transfers to other funds

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• OBJECT CODE
• CBO LEADERSHIP ROLE
• Are systems in place to ensure that expenditures
  are posted to the correct accounts?
• E.g., Site Principals may charge a conference
  expenditure to a books/supply account because the
  supply account has a budget balance available
• Consequence of error
• Comparative data analysis with other districts
  will show anomalies
• Inconsistent data from year to year comparison
• Potential flawed calculation on of budget (with
  exclusions) spent for teacher/instructional aides
  and related benefits

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• SCHOOL
• Optional field
• Not reported to CDE at this time
• To track or not to track?
• Tracking costs of school
• Value of data
• School A has teachers with significant longevity
• School B has new teachers

conclusion from the data?
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SACS - El Dorado County

• Object code before Goal
• Reports to CDE following Function when export to
  
• SACS software
• Local 1, 2, 3 available
• Not reported to CDE
• Keep simple but use if helpful

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Exercise

• You have learned it is important to have systems
  in place to
• track income and expenditure by Resource
• ensure Resources are balanced
• track reporting of goal
• track function and goal
• ensure expenditures are posted to correct
  accounts
• What do systems look like?
• Brainstorm ideas. Share with class.

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Sample 1-page SACS handout for staff
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BREAK
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Elements of Financial Reports to Board

• Financial Summary/Budget Document
• Contains Assumptions and Narrative
• Locally developed format
• Multi-Year Projection
• State format or district developed
• Cashflow Analysis
• for First and Second interim
• Board Certification
• Finding of Positive, Qualified, Negative
• Official SACS forms
• State required reporting format

34
Another Reporting Requirement

• Collective Bargaining Disclosure information that
  goes to board
• Must also go to county office
• If qualified district, COE must review and
  comment BEFORE board action
• Requires Superintendent and CBO to certify the
  district can afford the settlement

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Financial Summary/Budget Document
36
Financial Summary - Assumptions

• Sample Revenue Assumptions
• Base Revenue Limit per ADA
• Hourly Programs - amount per ADA, deficits
• K-3 Class Size Reduction - amount per pupil full
  day, half day
• Instructional Materials - amount x py CBEDS
• Sample expenditure assumptions
• Step and Column with statutory benefits
• Negotiated salary agreements
• STRS 8.25
• Staffing changes
• Health and Welfare 20 increase
• Health and Welfare cap
• Site allocation formulas for instructional
  supplies, office supplies, such as xx per
  student
• Utilities 10 increase over prior year

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Enrollment Projections

• Plan for staffing and program needs
• Need layoffs? Need to hire?
• Facility needs
• Materials e.g. enough textbooks for each
  grade?
• Some revenues based on enrollment
• Class Size Reduction (CSR)
• Many categorical programs
• Measuring enrollment
• CBEDS (California Basic Education Data System)
  October
• CSR April 15
• Monthly see the trends. Declining? Growing?

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Enrollment Projections

• Estimating enrollment many methods
• One way

Assume current enrollment 8th grade
enrollment K enrollment
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Average Daily Attendance (ADA) Projections

• Revenue Limit is majority of funding for most
  districts and is based on ADA
• Lottery funded on Annual ADA
• Measuring ADA
• P-1
• P-2
• Annual

• Estimating ADA many methods
• One wayCBEDS to P-2 ratio

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Revenue Limit Projections

• Calculating projected Revenue Limit
• Spreadsheet, other software
• Current and next two years
• Factors
• COLA
• Deficit
• Unemployment Insurance projection
• PERS RLR rate estimated buyout
• Local property taxes
• Transfers to charter schools in lieu of property
  taxes
• Hourly programs rate per hour, deficit factors
• Community Day School cap factors, hourly rates,
  deficit factor
• Beginning Teacher Salary BTS 1? BTS 2?

41
Revenue Limit Projections

• Highlight Basic formula
• ADA x Revenue Limit ( other misc) Entitlement
• Mix of state aid and local taxes
• Attach detailed calculations
• RL is what of funding for your district?
• Funded on greater of current or prior year ADA
• Which for your district?
• What are significant changes?
• ADA change loss/gain in funding
• COLA , per ADA, total dollars
• Deficit restoration
• Changes from Budget Adoption
• Hourly programs back to RL, not in new block
  grant
• Slight change to deficit reduction factor

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Financial Summary - Assumptions

• Separate Handouts
• SSC Dartboard Fall 2005 version
• EDCOE State Budget Summary Installment 3
• SSC Articles
• CDE Recertifies Advance Apportionment -10/27/05
• AB825 Block Grant info -10/11/05
• School Finance Conference Q A -7/29/05
• 2005-06 Title I Allocations Released -9/14/05
• List of Mega-Item Programs from SSC (July 05)
• CDE Information
• AB 825 General FAQs
• Revised list of Categorical Block Grant Programs
  AB825 10/24/05
• Preliminary Title I part A 2005-06 entitlements
  9/9/05

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Financial Summary

• Easy to read summary of technical data
• In words (Narrative)
• In numbers (Financial Spreadsheet)
• Financial projections
• Effect on General Fund
• Ending Fund Balance
• What is reserved and why
• What is available
• Other funds
• Multi-year projection
• Other Key issues of the district
• Explain changes
• What and why from last time they saw numbers
• Certification what Boards action means

44
Financial Summary - Format

• Locally defined some suggestions to avoid
  serious mistakes
• One page summary with Unrestricted, Restricted
  and changes in each
• SACS puts unrestricted, restricted, total each
  on separate pages
• Analysis of change in Unrestricted
• 3-5 main reasons for changes
• Do changes make sense?
• Analysis of change in Restricted
• 3-5 main reasons for changes
• Do changes make sense?
• Comparison of Budget to Actuals
• Track budget changes for reasonableness
• Systems in place to test for reasonableness of
  budget to YTD actuals

45
Financial Summary Format Analysis Example

• Your Director of Fiscal Services prepares a SACS
  report for your review
• Where do you start your review?
• Sample Summary of SACS document attached
• Compare unrestricted total from last report to
  next report
• Compare restricted total from last report to next
  report
• What are the differences?
• Suggested format for tracking the changes - can
  avoid some serious mistakes
• Compare Budget to YTD actuals

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Change in Unrestricted? Does it make sense?
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Change in Restricted does it make sense?
49
Restricted

• To read the restricted side of the financial
  statement you must understand the treatment of
  deferred income and restricted ending balance
  carryover

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Deferred Incomeor Carryover(as if school
finance were not complicated enough!)
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Carryover Defined

• Carryover is a term that applies to money not
  spent in the current year.
• Carryover can be for local sources of revenue or
  state/ federal categorical funds
• For categorical programs, carryover is treated in
  two different ways
• Grants are subject to deferred revenue.
• Entitlements do not defer revenue but the
  carryover is a restricted ending balance.

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Note 41,000 in ending balance to be spent next
year.
Note 20,000 reduction in ending balance. To
be counted as income in next year
53
2003-04 Carryover and Deferred Income
incorporated in 2004-05 First Interim Budget
54
Final Result comparison of final last year data
to this years updated First Interim
SIP increased by deferred income
SIP expenditures now match income available
Inst. Materials budget now reflects 40,000 from
restricted ending balance
Donation from restricted ending balance reflected
in budget
55
Problem

• During your board presentation of first interim
  someone asks why 2003-04 SIP Income was 80,000
  and this year it is 120,000? We obviously had a
  40,000 increase in SIP income and can afford now
  to hire two new aides.
• Your Answer?

56
One Answer

• We have an ongoing income source of 100,000 per
  year
• 2003-04 income was 100,000 but is reflected on
  the books at 80,000 since 20,000 was unspent.
• 2004-05 income is 100,000 PLUS 20,000 in one
  time money from the prior year.
• It is available for expenditure, but prudent
  budgeting means that we allocate one time dollars
  for one time uses

57
Problem

• An irate bargaining union member asks
• How can you have a 3.45 increase in income and
  22 increase in expenditures? The board
  obviously has money to spend on everything but
  salaries for employees.
• Your Answer?

58
One Answer

• In order to properly compare financial data from
  one reporting period to the next, you get the
  most accurate picture by comparing unrestricted
  data.
• Unrestricted expenditures only increased 100,000
• Restricted data increases and decreases
  significantly based on changes in categorical
  funding and by the impact of budgeting deferred
  income and carryover.

59
Problem

• A board member asks why it is that they adopted a
  balanced 2003-04 budget. Income Expenditures.
  Our first interim now shows we are deficit
  spending by 41,000. We all know that deficit
  spending is WRONG. Therefore, how can we approve
  this budget?
• Your Answer?

60
One Answer

• The true operating deficit is still -0-
• Unrestricted income less unrestricted expenditure
  is balanced
• The 41,000 negative income/expenditure variance
  relates to the planned use of prior year
  restricted monies

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LUNCH
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Multi-Year Projection
63
Multi-Year Projection

• Know where the district will be financially in
  next few years
• Basis for critical decision making
• Identify potential deficits/encroachments
• Enable district to provide ongoing educational
  programs
• Help develop negotiating strategies
• Incorporate enrollment and staffing projections
• Indicate assumptions
• Should result in a positive interim report
  certification

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Multi-Year Projections

• Beware of
• Predicting terrible conditions that never occur
• Overly conservative assumptions
• Overly optimistic assumptions
• Projections on unsound assumptions

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Multi-Year Projection

• Key Elements
• ADA used for Revenue limit calculations-all 3
  years
• Detail of Revenue limit components (can be on a
  separate spreadsheet) - all 3 years
• Revenues/Sources and Expenditures/Uses by Major
  object classification - all 3 years
• Breakdown of amount of salary increase attributed
  to Step/Column and staffing adjustments (can be
  listed out in ASSUMPTION summary, if not on
  separate line)
• Beginning Balance- Reconciles with Prior Year
  Ending balances for each subsequent fiscal year

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Cashflow Analysis
67
Cashflow Analysis

• Provides monthly detail by major object category
  of the receipt and disbursement transactions for
  the General Fund
• Actuals for interim period
• Remaining months estimated through end of year
• Include accruals
• Current year revenue expenditure totals on
  Cashflow should agree with projected interim
  totals for General Fund
• May use SACS Form CASH or equivalent spreadsheet
  that contains the same data elements
• Beginning Cash
• Monthly Cash balances
• Major Revenue/Sources and Expenditures/Uses lines
• Prior Year Accruals/Monthly activity
• Current Year Estimated Accruals column (Reconcile
  Cash activity back to Projected Budget, amounts
  not received or expended would be accrued State
  Aid paid in July, Payroll paid in July, etc.)

68
Cashflow Analysis - Tips

• Revenues
• Use historic patterns of distributions per month
  in relation to total revenues received
• Use CDE cash distribution estimates, for example
• Principal Apportionment monthly payment
  schedule
• Transportation 1/10 per month Sept thru June
• K-3 Class Size Reduction
• 25 advance October
• 75 est per application (up to max py CBEDS)
  February
• Final adjustment per actual enrollment (J-7 CSR)
  July
• Title I - 40 December, 40 April, 20 June
• Expenditures
• Review debt schedules for payment cycles
• Review payroll for whether H/W premiums are paid
  monthly or quarterly
• Review payroll for when stipends are paid out,
  year end or periodically throughout the year
• Review maintenance contracts for annual payment
  cycles-negotiate with vendor if payment hits at
  low cash cycle

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Board Certification
70
Board Certification

• Board and Superintendent sign
• Interim Report was reviewed in accordance with
  the States Criteria and Standards
• Districts ability to meet its ongoing financial
  obligations in the current and TWO subsequent
  fiscal years

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Board Certification

• POSITIVE District Governing Board certifies
  that the district WILL BE ABLE to meet its
  financial obligations for the current and two
  subsequent fiscal years.
• QUALIFIED District Governing Board certifies
  that based on current projections, the district
  MAY NOT BE ABLE to meet its financial obligations
  for the current and/or two subsequent fiscal
  years.
• NEGATIVE District Governing Board certifies
  that based on current projections, the district
  WILL BE UNABLE to meet its current or subsequent
  fiscal years financial obligations.

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Class Exercise
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Class Exercise

• Lets give it a try!
• See the separate handouts
• District Financial Status with Adopted Budget
  Unrestricted/Restricted/Changes
• Changes in Financial Position Unrestricted
• Changes in Financial Position Restricted

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Class Exercise
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Class Exercise

• This is your CAT form from the prior year
  Unaudited Actuals for Federal Categoricals
  subject to Deferred Revenue

Incorporate the appropriate changes for
carryovers to the current year budget on your
worksheet.
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Class Exercise

• This is your CAT form from the prior year
  Unaudited Actuals for State Categoricals subject
  to Restricted Ending Balance.

Incorporate the appropriate changes for
carryovers to the current year budget on your
worksheet.
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Class Exercise

• The final funding for the prior year Lottery (RS
  1100 Unrestricted) has been received. When the
  prior year books were closed this funding was
  anticipated and a receivable was established for
  7,000. However, the final amount received was
  8,000.
• Incorporate the appropriate changes to the
  current year budget on your worksheet.

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Class Exercise

• You have been informed that, although the
  district has not increased enrollment, due to
  class configuration one additional teacher needs
  to be hired above the number of teachers that
  were assumed to be needed when the budget was
  adopted in June. The additional cost for the
  teachers salary and benefits will be 50,000.
• How will expenditures change? Will income
  change?
• Incorporate the changes on your working
  spreadsheet.

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Class Exercise

• Complete 1st Interim columns and variance
  columns on your worksheets.
• Look at your worksheet in the row Net
  increase/decrease to fund balance.
• Notice that the district is now deficit spending.
  
• How much of this deficit is ongoing?
• 3. How much is one-time?
• Complete the True Operating Deficit worksheets

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Class Exercise
83
Class Exercise

• For purposes of simplifying our exercise, assume
  the following for Year 1 and Year 2
• Ongoing income stays at same level as in current
  year
• Ongoing expenses stay at same level as in current
  year
• Complete the Multiyear Projection - Unrestricted

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85
BREAK
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Official SACS Forms
87
SACS Forms

• Form AI Average Daily Attendance
• Form RLI Revenue Limit Summary
• Form MYPI Multiyear Projections
• Form CASH Cashflow Worksheet
• Fund Forms
• User Data Input
• Components of Ending Fund Balance (CEFB)
• Technical Review Checks (TRC)
• Criteria and Standards (CS)
• Form CI Interim Certification

88
Form AI Average Daily Attendance (ADA)

• Displays the Revenue Limit ADA used as a basis
  for revenue limit funding for the original
  adopted budget, current approved operating budget
  and projected year totals
• Also displays the current years estimated P-2
  ADA separately if district is projecting
  declining enrollment

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Adopted Budget Form A Data
Operating Budget ADA-if updated RL
Revenue Limit ADA projection for RL (greater of
CY orPY) Must match ADA line on Form RLI
This column is CY P-2 ADA for Declining ADA
districts
90
FORM RLI Revenue Limit Summary

• Provides additional supporting information on the
  assumptions used to budget for Revenue Limit in
  the original adopted budget, approved operating
  budget, and current projection for the fiscal
  year
• The Original Budget column is to report the
  districts Form RL data from the Adopted Budget
  report
• The Board Approved Operating Budget Column should
  reflect any Board Approved revisions made to the
  state aid/revenue limit calculations, perhaps to
  bring state aid in line with Final State Adopted
  Budget guidelines, i.e.. Deficit/State Cola
• The Projected Year Totals is the revenue limit
  calculations based on the projected ADA used in
  Form AI, along with any updates for
• PERS RLR
• UI
• Other elements

91
Current Operating Budget RL calculation-if
district adjusted Adopted Budget State Aid/Object
8011
Projected RL based on estimated P-2 Data
Elements,
Adopted Budget-Form RL Data
PERS reduction should match amounts projected for
Object 8092 and total of Object 3801 3802
92
FORM RLI Revenue Limit Summary

• Sum of lines 21 and 22 (PERS Reduction and PERS
  Safety Adjustment) agrees with Object 8092, PERS
  Reduction Transfer, reported in the General Fund
• Sum of lines 25 through 27 agrees with the sum of
  objects 8020 through 8089 reported in the General
  Fund
• Amount on line 40 agrees with Object 8011,
  Revenue Limit State Aid-Current Year, reported in
  the General Fund

93
Property Taxes should reflect most current J-29B
Property Tax estimate from County Auditor and
should equal objects 8021-8089
Hourly programs should be updated to reflect most
current actual and projected hours on Form AI
Total should equal amount projected for object
8011 in Projected Year Totals column of Form 01I
94
Fund Forms - FORM 01I

• Reporting Format
• Column A-Original Budget (Adopted, 7/1)
• Column B-Board Approved Operating Budget (Current
  Board Approved budget as of 10/31 which may
  include adjustments for UA carryovers and final
  State Adopted Budget revisions)
• Column C-Actuals to Date (current revenues and
  expenditures actually received/expended as of
  10/31)
• Column D-Projected Year Totals (Districts
  projection of updated revenues/expenditures based
  on ADA changes from Adopted Budget updated
  staffing ratios updated supply ratios new
  categorical funding or carryovers deleted
  program funding, etc.-District needs assumptions
  to substantiate adjustments being made)

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Actual ActivityAs of 10/31
Adopted Budget as of 7/1
Board approved Revised
Projected to 6/30
96
Total components must equal Ending Balance
Should equal State Minimum Reserves eg 3
97
Exporting from QSS
98
Export Data from QSS
99
Export Data from QSS
Sample (your entries may differ)
NEW must complete
100
Download data file to PC
101
Download Data to PC
Sample (your entries may differ)
102
Planning Calendar - Sample

• Task
• Assumptions gathered
• Position Control updated
• Financial System updated
• Financial Summary/Budget Document
• Multiyear Projection
• Cashflow
• Final Review with Supt
• SACS forms completed
• Materials to Board Packet
• Present to Board

• Sample Target Date
• Nov 5
• Nov 8
• Nov 15
• Nov 18
• Nov 23
• Nov 23
• Nov 30
• Dec 2
• Dec 2
• Dec 7

103
Sample Interim Checklist

• GATHER ASSUMPTIONS
• Enrollment ADA projections
• Income
• Revenue Limit projections
• Any changes to COLA, deficit factors, etc?
• ADA projections changed?
• New property tax projections?
• Restricted
• Award letters, notifications, etc
• Consolidated Application entitlements available?
• Special Ed allocations/info from SELPA
• CAT form from prior year closing
• Deferred Revenue to record
• Award Carryover to budget
• Other
• Any received but not expected need to budget?
• Interest projections OK?

• Expenditures
• Staffing changes
• For Cert. Classified FTE, total
• cost of 1 (for criteria standards)
• Negotiations settlements, Salary
• schedule changes
• Salary related benefits any rates
• changed?
• Formula budgets based on
• enrollment/ADA any changes
• Utilities projections OK?
• Actual to date vs. Budget any
• budget changes needed?
• Carryovers deferred revenues
• restricted ending balance
• New Transfer to Charters In Lieu
• of property taxes amount?
• Other
• Review balance sheet

104
Sample Interim Checklist

• UPDATE FINANCIAL SYSTEM (QSS)
• Update General Ledger (Actuals)
• Record balance sheet items above (cash transfer
  TV or TF)
• Deposits to record
• Update Expenditure Budgets
• Update Salaries Benefits using Position control
• Update objects 4xxx-7xxx, any other 1xxx-3xxx as
  needed
• Direct/indirect balanced by fund function
  (57xx, 73xx)
• Update Income Budgets
• PERS RLR Balanced across funds (8092 38xx)
• Finalize RL projection with final UI, PERS RLR
  budgets update RL income budgets
• Update other income budgets to reflect
  assumptions gathered
• Transfers 8995, 8997, and 8998 net to -0- by fund
  
• Balance Resources
• QSS Report GLD320 (or FAR300 sorted by RS, inc 4
  digit, exp 1 digit)

105
Sample Interim Checklist

• FINANCIAL SUMMARY/BUDGET DOCUMENT
• Assumptions indicated
• Enrollment ADA projections
• Revenue Limit Projections
• Other
• Narrative
• GF Summary Spreadsheet Unrestricted,
  Restricted, Changes in each
• Restricted Programs
• Summary by program
• Changes updated awards, carryovers (def. rev.
  REB)
• Size of programs carryovers, cy awards,
  contributions
• Summary of total Restricted - Totals and Analysis
  of Changes
• Unrestricted Programs
• Description of changes and updated income
  expenditure items
• Summary of total Unrestricted - Totals and
  Analysis of Changes
• True Operating Deficit / Surplus
• Projected deficit/surplus
• Changes from last time

106
Sample Interim Checklist

• MULTI-YEAR PROJECTION
• Assumptions
• Form MYP in SACS software or alternate MYP
• If using SACS Form MYP, follow suggested SACS
  software sequence (need to do Form 01I, Form
  01CSI, Form RLI before starting MYP)
• Reserve components positive
• CASHFLOW
• GLD310 QSS Cash Flow report for beginning balance
  actuals to date
• SACS software Form CASH (see SACS software
  sequence below) or alternate
• Beginning Balance for July
• Actual receipts, disbursements, prior year
  transactions for each month
• 1st Interim July 1-Oct 31
• 2nd Interim July 1-Jan 31
• Estimated receipts, disbursements, prior year
  transactions for remainder of year, including
  deferrals (should agree with the total projected
  interim GF revenues and expenditures)
• Ending cash is positive

107
Sample Interim Checklist

• SACS Software SUGGESTED DATA PROCESSING
  SEQUENCE
• SACS software installed
• Update validation tables and fixes as needed
• Preferences select LEA and Reporting Period
• Supplemental FormsAI, CI, and RLI
• CASH - Supplemental Form (if using the SACS form
  for Cashflow) see notes above
• Import from QSS - file, import, browse to select
  the file that was downloaded
• Manually input GL data not maintained in QSS
  (e.g. Bond Interest and Redemption Fund) using
  User Data Input/Review
• TRC-Import TRC-General Ledger for each of the
  four types of data
• Correct Fatal exceptions
• Correct Warnings, or explain if data is correct
• Informational Warnings correct is data
  incorrect, if data is correct then explanation
  optional but encouraged
• General Ledger Data Corrections, re-import the
  applicable fund(s), re-run TRC-Import and
  TRC-General Ledger.
• Components of Ending Fund Balance by resource.
  Re-run TRC-Import and TRC-General Ledger.
• Fund Forms - Open, review, save, and print
  applicable fund forms.
• Supplemental Forms (Counties only)JUV and ROP as
  needed.
• Criteria and Standards - Complete, save, and
  print.

108
Sample Interim Checklist

• MATERIALS TO BOARD PACKET
• Financial Summary/Budget Document
• Assumptions and Narrative
• Budget Summary
• Unrestricted/Restricted/Changes with Analysis
• Multi-Year Projection
• Cashflow
• Board Certification
• Official SACS forms

109
Congratulations!

• You now possess the necessary skills to ascertain
  and account for the changing facts in your school
  district. You can critically analyze a school
  district financial document, clearly list the
  vital assumptions, and artfully compose an
  elegant narrative. You can provide reasonable
  and understandable multiyear projections.
• You have in your repertoire of skills the ability
  to extract the necessary data to make a complete,
  coherent and riveting report to your board.
• And you all enjoy nothing more than making public
  presentations of financial data right!
• Happy 1st Interim!

110
Governmental Funds - Special Revenue Funds

• Special Revenue Funds
• Special Revenue funds are established to account
  for the proceeds from specific resources, which
  by law are restricted to the financing of
  particular activities
• Adult Education Fund
• Expenditure only for adult education
• (EC 52616b and 52501)
• Direct costs, direct support and indirect as
  defined in EC 52616
• Child Development Fund
• Federal, state, and local revenue to operate
  child development programs
• Expenditures for operation of a child development
  program (EC 8328)
• Child development programs that are not
  subsidized by state or federal funds and that are
  operated with the intent of recovering the costs
  of the program through parent fees or other
  charges to users should be accounted for in an
  Enterprise Fund

appendix
111
Governmental Funds - Special Revenue Funds

• Charter Schools Fund
• Used to report separately the activities of those
  charter schools not included in the General Fund
• Cafeteria Fund (Account)
• Federal, state, and local revenue to operate food
  service program
• EXCEPTION - May also be cafeteria account - in
  separate bank account - not county treasury
• Direct costs and direct support. Indirect
  limited lesser of PY indirect cost rate or
  statewide average approved indirect cost for the
  second prior fiscal year
• May establish and maintain a cafeteria equipment
  reserve

appendix
112
Governmental Funds - Special Revenue Funds
appendix

• Deferred Maintenance Fund (EC 17582-17587 )
• State apportionment and LEAs contributions
• 1/2 of 1 of LEA general fund state match
• Rarely fully funded
• Expenditures for major repairs or replacements
• Five Year deferred maintenance plan required
• Update yearly
• Check each year to make sure expenditures from
  this fund are included in the five year plan
• Expenditures must meet specified criteria - e.g.,
  Painting - xx years from the last repainting.
  Carpet - xx years from last replacement.

113
Governmental Funds - Special Revenue Funds

• Pupil Transportation Equipment Fund (optional)
• Education Code Section 41852b
• State and local revenue for acquisition,
  rehabilitation or replacement of equipment used
  to transport students
• May also be kept in general fund
• School Bus Emissions Reduction
• (EC 17920-17926)
• Purchase or lease of new low or zero emission
  school busses or retrofitting of existing
• LEA contributes more than 50

appendix
114
Governmental Funds - Special Revenue Funds
appendix

• Forest Reserve Fund (county offices)
• County office receives
• Pass-through fund
• Funds deposit into this fund - then transfer to
  LEAs
• Explanation of Forest Reserve monies
• Originally, money from timber harvest in national
  forest
• 25 of gross revenue returns to county where
  national forest is located. e.g., El Dorado
  National Forest covers several counties - 73 is
  in El Dorado County, therefore 73 of 25 gross
  revenue is returned to the county.
• The revenue in the county is divided 50 to
  schools and 50 to roads.
• However, when funds declined, federal formula put
  in place a guaranteed funding level equal to
  three-year average.

115
Governmental Funds - Special Revenue Funds

• Special Reserve fund for other than Capital
  Outlay (Optional)
• Primarily used to accumulate General Fund moneys
  for general operating purposes other than for
  capital outlay (EC 42842)
• Transfers must be made back to GF (or other fund)
  for expenditure
• Foundation Special Revenue Fund
• Gifts or bequests pursuant to EC 41031
• Formal trust agreement with the donor (account
  for other types of donations in the General Fund)
• Expended only for the specific purposes of the
  gift or bequest (EC 41032)

appendix
116
Governmental Funds Special Revenue Funds

• Special Reserve Fund for Postemployment Benefits
  (optional, new for 2003-04)
• Amounts earmarked for future cost of retiree
  benefits but not contributed irrevocably to a
  separate trust
• Use optional, may also use GF or Special Reserve
  for Other than Capital Outlay
• Transfers must be made back to GF for expenditure
• No need to use if utilize pay as you go for
  retiree benefit costs

appendix
117
Governmental Funds - Capital Project Funds

• Capital Project Funds
• Capital project funds are established to account
  for financial resources
• to be used for the acquisition or construction
  of major capital facilities
• Building Fund (EC15146)
• Proceeds from the sale of bonds
• Proceeds from sale of real property
• Capital Facilities Fund
• Mira Fees. Fees levied on developers or other
  agencies as a condition for approving a
  development (grandfathered)
• SB 50 fees - Level 1 and Level 2
• Expenditures in the Capital Facilities Fund are
  restricted to the purposes specified in
  Government Code sections 6597065981 or to the
  items specified in agreements with the developer
  (Government Code Section 66006).

appendix
118
Governmental Funds - Capital Project Funds

• State School Building Lease Purchase Fund (EC
  17000-17080)
• Former state program for construction funds
• District match (usually developer fees)
• Expenditures for building/modernization
• School Facility Fund (Prop 1A)
• New state building program (Includes
  modernization)
• Special Reserve Fund for Capital Outlay
  (Optional) (EC42840)
• Accumulate general fund monies for capital outlay
• Proceeds from sale of real property
• Must be expended for capital outlay purposes
• May expend directly from fund

appendix
119
Governmental Funds - Debt Service Funds

• Debt Service
• Bond Interest Redemption Fund
• Repayment for bonds issued for an LEA. Proceeds
  deposited in the county treasury. County auditor
  controls this fund. Old and new bonds
• Tax Override fund (old state issued bonds)
• Repayment of voted indebtedness tax levies to be
  financed from ad valorem tax levies.
• Debt Service Fund
• Used for the accumulation of resources for and
  the retirement of principal and interest on
  general long term debts

appendix
120
Governmental Funds - Permanent Funds

• Permanent Funds
• This governmental fund type was introduced as
  part of the governmental financial reporting
  model established by GASB Statement No. 34.
• Foundation Permanent Fund
• account for resources received from gifts or
  bequests pursuant to EC 41031 restricted to the
  extent that earnings, but not principal, may be
  used for purposes that support the LEAs own
  programs
• formal trust agreement with the donor
• expended only for the specific purposes of the
  gift or bequest

appendix
121
Proprietary Funds
appendix

• Enterprise funds (Optional)
• Fund is financed and operated in a manner that is
  similar to that employed by private business
  enterprises - e.g., governing board intent that
  the cost of providing continuos goods or services
  can be financed or recovered primarily through
  charge to users
• Full accrual basis - e.g., depreciation,
  recording of long term debt and long term
  obligations are recorded in the fund and not the
  account groups.
• Charter Schools Enterprise Fund - not-for-profit
  public benefit charter schools that use the
  accrual basis of accounting or report separately
  from their authorizing LEAs. In this case Fund 62
  serves not as a fund but as a means to collect
  financial data needed for submission of reports
  to CDE.
• Internal Service Funds (Optional)
• Self insurance fund
• e.g., Workers Compensation, health and welfare,
  deductible property loss
• Generally intended to be self supporting
• Warehouse Revolving Fund
• Budget control and stock accounting of warehouse
  merchandise

122
Fiduciary Funds

• Fiduciary funds are used to account for assets
  held in a trustee or agent capacity for others
  that cannot be used to support the LEAs own
  programs.
• Trust Funds
• Retiree Benefit Fund
• Irrevocable contributions to a retiree benefit
  plan for which a formal trust exists
• Transfer monies to fund current and future
  obligations.
• Expenditures can be made from the fund.
• Foundation Private-Purpose Trust Fund
• Account separately for monies received from gifts
  and bequests under which neither principal nor
  income may be used for purposes that support the
  LEAs own programs
• Formal trust agreement with the donor

appendix
123
Fiduciary Funds

• Agency Funds
• Warrant Pass-Through Fund
• Example, County Office Payroll Trust fund -
  Payroll deductions are deposited and checks cut.
  E.g., federal and state taxes, retirement
• Student Body Account
• Primarily used to enable a student body to raise
  and expend money to promote the general welfare,
  morale, and educational experiences of the
  student body.
• Typically a separate bank account - not done
  through county treasurer
• Expenditures may be made for merchandise, student
  body activities, food, hospitality and student
  awards. (Title 5 Education, sections 15500 and
  15501)
• Pass-through and Student Body Fund not required
  to be reported to CDE
• however, this fund is required to be included in
  the audited financial
• statements to meet the GAAP reporting
  requirements.

appendix
124
Recording General Fixed Assets

• Capital (fixed) assets e.g. building, land,
  furniture and equipment
• Meet useful life and monetary cost criteria and
  warrant capitalization
• Record fixed assets cost, date of acquisition,
  and other details
• Capital assets not reported in proprietary fund
  or trust fund are reported in government-wide
  statement of net assets
• Model established by GASB Statement 34
• Schedule of capital assets included in notes to
  the financial statements
• General Fixed Asset Account Group is eliminated
  under GASB 34

appendix
125
General Long Term Debt

• Account for the unmatured principal of long term
  indebtedness
• Outstanding bonds, long term notes payable,
  capital leases, long term liabilities for
  compensated absences
• Typically set up at year end as part of the
  preparation of financial statements
• Long-term liabilities are reported in
  government-wide statement of net assets
• Model established by GASB Statement 34
• Schedule of long-term debt included in notes to
  the financial statements
• General Long-Term Debt Account Group is
  eliminated under GASB 34

appendix