Objectives. {ISD Option for Early Warning Assistance} MSBO FINANCIAL STRATEGIES JANUARY 2016

Transcription

1 1/13/2016 {ISD Option for Early Warning Assistance} MSBO FINANCIAL STRATEGIES JANUARY 2016 ISD OPTION FOR EARLY WARNING ASSISTANCE Objectives Discuss the ISD option for an administrative review Identify the alternatives to an administrative review Share the approach and tools that Oakland Schools has developed ISD OPTION FOR EARLY WARNING ASSISTANCE 1

2 1/13/2016 Public Act 109 If the state treasurer declares that the potential for fiscal stress exists the governing body may choose to establish a contract with an intermediate school district to perform an administrative review ISD OPTION FOR EARLY WARNING ASSISTANCE What is Fiscal Stress? Defined in PA Unable to meet short or long-term obligations - Meeting any of the triggers as listed in PA 436 of 2012 (the Local Financial Stability and Choice Act) here are a few highlights: Creditor indicates non payments > 6 months of amounts more than $10,000 or 1% of revenue (greater of) Late payments to retirement system Default on bond payments Late filed audit Breach of DEP Court ordered additional tax levy Other ISD OPTION FOR EARLY WARNING ASSISTANCE 2

3 1/13/2016 What is Fiscal Stress? Treasury is trying to identify other indicators, such as: - Fund balance as a percent of revenue (5 year trend) - Revenues Over Expenditures (5 year trend) - Accounts payable over Revenue (5 year trend) - Days of cash on hand (5 year trend) - Enrollment trends (8-10 year trend) - Expenditures per pupil (5 year trend) - Retirement cost as a percent of revenue (5 year trend) - Tax burden per citizen (5 year trend) - Population trends (8-10 year trend) - Credit rating - Schools of Choice Note these indicators have not yet been approved ISD OPTION FOR EARLY WARNING ASSISTANCE How Will Treasury Determine the Potential for Fiscal Stress? State treasurer may declare that the potential for fiscal stress exists if: - An operating deficit may arise during the current school fiscal year or the following 2 school fiscal years - A school district may be unable to meet its financial obligations while also satisfying the school district s obligations ISD OPTION FOR EARLY WARNING ASSISTANCE 6 3

4 1/13/2016 How Will Treasury Determine the Potential for Fiscal Stress? Based on the following factors a) Financial data or other information submitted to a state department or agency b) Financial data or other information included within an audited financial statement c) Financial data or other information provided to a state department, agency, or authority in connection with a request to issue bonds, notes, or other debt obligations d) Financial data or other information included within a recommended budget, budget, or general appropriations act e) Financial data or other information provided to a state department, agency, or authority by an officer, employee, contractor, or agent of the school district f) For a school district, data relating to pupil enrollment g) For a school district, financial data or other information provided to the department or department of treasury by the intermediate school district in which the school district is located ISD OPTION FOR EARLY WARNING ASSISTANCE 7 How Will Treasury Determine the Potential for Fiscal Stress? Treasury intends to also use a stress test which will score multiple factors ISD OPTION FOR EARLY WARNING ASSISTANCE 8 4

5 1/13/2016 Public Act 113 If a district does not satisfy Treasury, the district may be required to submit an enhanced deficit elimination plan. If Treasury is not satisfied with the level of compliance, they may declare a financial emergency and recommend the governor immediately appoint an Emergency Manager ISD OPTION FOR EARLY WARNING ASSISTANCE 9 Alternative to Administrative ISD Review Treasury can then require the District to submit periodic financial Status reports for up to 4 years. If a school district is required to submit periodic financial status reports, the school district shall do all of the following: - Submit a periodic financial status report in the form and manner and on the periodic basis prescribed by treasury, after approval by the governing body of the school district. - Transmit a copy of each periodic financial status report required under this section to the members of its governing body. - Provide treasury with other financial data or information relating to the financial conditions of the school district, intermediate school district, or public school academy as requested by the department of treasury. - Allow the department of treasury to examine financial records and books of account of the school district. - Promptly and fully provide the assistance and information necessary and properly requested treasury in the exercise of the department of treasury s duties under this section. ISD OPTION FOR EARLY WARNING ASSISTANCE 10 5

6 1/13/2016 ISD Option At a minimum, includes a review of 11 required areas specified in the statute The parties to the contract may request Treasury to waive one or more of the 11 required areas Must be completed within 90 days of the contract being executed Requires the district implement at least one recommendation from the review within one year The ISD submits quarterly reports regarding the district s progress in implementing the recommendations for up to two years ISD OPTION FOR EARLY WARNING ASSISTANCE 11 Agreement between ISD and LEA Contract with ISD within 60 days of notification from State Oakland Schools Agreement for Administrative Review of Financial Status key elements include: - Recommendations to avoid a deficit - Present at public meeting of governance board - Submit recommendations to Departments of Ed and Treasury - May communicate findings unrelated to recommendations to Superintendent - Quarterly reports from ISD to Department of Treasury regarding implementation status of recommendations ISD OPTION FOR EARLY WARNING ASSISTANCE 6

7 1/13/2016 Oakland Schools Scope of Review Staffing levels* Wages and benefits* Non-instructional costs* Sub, workers comp and unemployment costs Current and future costs of existing bargaining agreements School building capacity utilization Enrollment projections Deferred maintenance & capital investment Financial practices State and federal grants (not in statute) Any other revenue or expenditure w/ material impact (not in statute) ISD OPTION FOR EARLY WARNING ASSISTANCE Oakland Schools - Components of Review Data Collection Meetings with District Leadership Analysis Report ISD OPTION FOR EARLY WARNING ASSISTANCE 7

8 1/13/2016 Oakland Schools Data Collection District Data Request List (in template) District Questions (in template) Website Data analytics tools (Munetrix and Eidex approved for section 102d funding) ISD datasets MISchool Data website MDE website Peer district websites ISD OPTION FOR EARLY WARNING ASSISTANCE Financial Practices Sample Items 1 Review budget adopted for June 30, year end and determine that the original budget did not adopt a deficit (overall deficit) budget 2 Review budget amendments filed during the June 30, year and determine the budget amendments did not indicate a deficit fund balance for June 30 3 To the extent a deficit budget was adopted, verify the Board of Education (or other district representative) notified the Michigan Department of Education that a deficit was expected 4 Verify that the budget contained within the district's financial system matches the Board adopted budget 5 Verify that the budget contained within the district's financial system matches the budget in MEG ISD OPTION FOR EARLY WARNING ASSISTANCE 8

9 1/13/2016 Wages Sample Items 10 Review schedule of employees limited to the hours they work as a result of receiving retirement funds through ORS (requested in 3a) 11 Review the number of part time employees by classification that qualify for ACA (requested in 3a) 12 Review the compensated absence accrual by bargaining unit for the last 3 years (requested in 3a) 13 Review the average number of absences during the prior fiscal year for the following classifications: teacher, bus driver, parapros / instructional aides (requested in 3a) 14 Review the amount paid for substitute teachers for the prior 3 fiscal years ISD OPTION FOR EARLY WARNING ASSISTANCE Facilities Sample items 3 Is the district renting facility space from others? If so, identify building and purpose 4 Is the district renting out district-owned facilities / space? If so, identify building and purpose and the rental income income for the last 3 years 5 Are custodial services included in the rent charged to outside organizations? 6 Identify all closed / unused district-owned facilities 7 Identify whether there a disposition plan in place for unused facilities ISD OPTION FOR EARLY WARNING ASSISTANCE 9

10 1/13/2016 Oakland Schools Approach Statute allows for full cost recovery Oakland Schools intends to conduct a full and comprehensive review, given the 90 day time period identified in the statute At Oakland Schools, the review is done within the OS Cost Recovery Field Services division OS will be using staff, contractors, and consultants for this project-based work (accessing the critical shortage list would be very helpful) The ISD will finalize the scope of the review with each district before contract is executed ISD OPTION FOR EARLY WARNING ASSISTANCE Oakland Schools Deliverables Restore the fund balance to a level equal to or greater than 5% of revenue (revenue as defined by the State Treasurer) within no more than five years Oakland Schools will issue one recommendation regarding annual net income in the general fund, with a menu of all the potential actions identified through the administrative review ISD OPTION FOR EARLY WARNING ASSISTANCE 20 10

11 1/13/2016 Factors to Consider Number of concurrent administrative reviews District size and capacity Quality and accessibility of data provided by the district Variance in services provided by district The existence of a recent facility condition assessment and physical asset inventory (within the prior 24 months) ISD OPTION FOR EARLY WARNING ASSISTANCE Key Takeaways If a district does not satisfy Treasury, the district may be required to submit an enhanced deficit elimination plan. If Treasury is not satisfied with the level of compliance, they may declare a financial emergency and recommend the governor immediately appoint an Emergency Manager Oakland Schools developed tools: - Agreement - Template, including data request, district questionnaire, and action items to be completed in administrative review ISD OPTION FOR EARLY WARNING ASSISTANCE 11

12 1/13/2016 Questions ISD OPTION FOR EARLY WARNING ASSISTANCE 23 Dr. Vickie Markavitch, CEO Cost Recovery Field Services Oakland Schools {Thank You!} Robert Moore, Deputy Superintendent Oakland Schools Judy Wright, Partner Plante Moran ISD OPTION FOR EARLY WARNING ASSISTANCE 12

13 1. Cover Sheet Oakland Schools Early Warning Administrative Review Checklist / Guidelines School District Name: ISD Representative or Contractor performing review: In accordance with guidelines outlined in Public Act 109, the ISD shall perform the steps noted on the subsequent tabs related to their administrative review of the school district. Date work began: Date work completed: List LEA individuals involved in providing data or discussions Name Role DRAFT: 10/30/15

14 2. Peer Districts Through discussion with district representatives or based on ISD experience, identify those entities which represent appropriate peers for comparison. Peers can be identified through foundation allowance, size, geographic proximity, demographic composition, etc. List the peer entities below (at least 6 should be identified): District Name Most recent Pupil FTE Count Foundation Allowance % of Students Qualifying for Free or Reduced Lunch %ELL Special Ed Pupils as % of Total Pupil Special Ed FTE Special Ed Headcount Average Teacher Salary (Bulletin 1014) DRAFT 10/30/15 Items in bold may occur in a later phase

15 3a. Data Request District District Data Request List ITEM # ITEM PROVIDED? 1 Organization chart identifying positions and number of FTEs 2 Approved budget for prior fiscal year and current fiscal year 3 All approved budget amendments for prior and current fiscal years Budget pulled from the financial system for prior and current fiscal year (please provide in hard copy and 4 spreadsheet format) 5 Collective bargaining agreements 6 SE 4096 for prior 3 years If not included in organization chart above, number of FTEs for the following: Speech professionals Social workers Psychologists Guidance counselors 7 IT staff by role Report identifying total wages by bargaining unit for each of the last 3 years. (please provide in hard copy 8 and spreadsheet format) Report identifying authorized staffing by position with funding source (current year). (please provide in 9 hard copy and spreadsheet format) 10 Report identifying authorized staffing by labor group with funding source (current year) List of all wage modifications by classification by year for last 5 years (please provide in hard copy and spreadsheet format) Report identifying the number of employees paid at the minimum wage level (please provide in hard copy and spreadsheet format) 13 Report of employees limited on hours worked as a result of receiving retirement funds through ORS 14 Report identifying the number of part time employees by classification that qualify for ACA 15 Report identifying the compensated absence accrual by bargaining unit for each of the past 3 years Report identifying the number of absences by classification for the prior fiscal year for: teachers, bus drivers, parapros/instructional aides Report identifying average benefits as a percentage of salaries by classification for prior fiscal year. (please provide in hard copy and spreadsheet format) Report identifying amount paid for substitute teachers for the prior three fiscal years. Identify whether a third party vendor was use and if so, please identify vendor. Report identifying amount paid to third party vendors for temp workers (other than substitute teachers) 19 for prior fiscal year 20 Enrollment projections for next 5 years including identification of methodology used Report identifying number of non resident / school of choice students attending school within the district 21 for the last 3 years 22 Report identifying the number of 105/105c students by category for the prior year 23 School Capacity Utilization report (identify instructional spaces and student capacity by building) 24 Facilities survey including acreage, instructional sq footage and total sq footage, utility consumption 25 SE 4094 for prior 3 years 26 Facility assessment DRAFT 10/30/15 Items in bold may occur in a later phase

16 3a. Data Request District 27 Equipment inventory include date of purchase (please provide in hard copy and spreadsheet format) 28 IT data including number of staff, number of devices, IT spend 29 Insurance certificates for all policies property, casualty, E&O, dental, medical and annual premium data 30 Statement of values (insurance) 31 Strategic Plan 32 Continuous improvement plan Spreadsheet of employees by bargaining unit with job classification/title, salary and benefits including 33 unaffiliated staff (please provide in hard copy and spreadsheet format) 34 Transcripts/bonding documents for active bonds including ST borrowings. Need actual source documents 35 Last 3 years of sinking fund and bond expenditures (please provide in hard copy and spreadsheet format) 36 Long term capital plan 37 Cash flow forecast for next 12 months (please provide in hard copy and spreadsheet format) 38 Number of charter schools in district and near district boundaries 39 Choice policy 40 Pay to play policy 41 Business operating procedures 42 Tuition calculation spreadsheets if district operates a special education center program 43 Job descriptions as requested Report identifying W2 total by person for last two fiscal years. Format: name, position, FY15 W2 total, FY14 W2 total, variance. Sort in descending order for FY15 (please provide in hard copy and spreadsheet 44 format) Report identifying grants received (title and dollar amount), amount spent against grant, carryover amount and indirect costs paid for each of the past two fiscal years (please provide in hard copy and spreadsheet 45 format) 46 Report identifying number of open workers comp cases and reserves set aside for each case 47 Last quarterly report received that identifies who has received unemployment DRAFT 10/30/15 Items in bold may occur in a later phase

17 Date Started 3b. District Questions Date Completed: # Question Response Completed by: 1 List of schools chartered by District and associated grade configuration 2 Name of SIS solution and hosting provider, if applicable Software Name: Version: Hosted or on premise? Hosting provider, if applicable: Annual cost: Software Name: Version: 3 Name of FMS solution and hosting provider, if applicable Hosted or on premise? Hosting provider, if applicable: Annual cost: How many internet connections are in place in the 4 district What were your internet costs for the past 2 years Substitute Teachers: Custodial: Grounds: 5 Identify whether the following services are outsourced. If the services are outsourced, please identify the provider Maintenance: Transportation: Food Service: IT: Clerical: Other outsourced services? 6 Is there a maintenance of effort concern for Special Ed? 7 Is the District a School of Choice district? 8 What is size of the district, in square miles 9 How many pools does the district own? 10 How many ice rinks does the district own? Do you have a business operating procedure manual? If 11 so, please provide 12 What cooperative purchasing programs are used? 13 Is the district the policy holder for health care insurance? DRAFT 10/30/15 Items in bold may occur in a later phase

18 3c. Data Collection Non District ITEM Bulletin 1014 PDF version Bulletin 1014 underlying datafile Bulletin 1011 PDF version Bulletin 1011 underlying datafile Collective bargaining agreements REP staffing data SE 4094 for prior 3 years SE 4096 for prior 3 years Salary surveys Facilities survey including acreage, instructional sq footage and total sq footage, utility consumption Transportation metrics FID submission including object codes POTENTIAL SOURCE MDE website MDE website MDE website MDE website Peer district websites MI School Data website Data Files Staffing Information MI School Data website Data Files Financial Reports ISD ISD MSBO Survey MSBO survey MDE / CEPI will require special request to State DRAFT 10/30/15 Items in bold may occur in a later phase

19 Date Started 4. Financial Practices Date Completed: Examine financial practices, including examination of compliance with Uniform Budgeting and Accounting Act, budget to actual expense report monitoring and budget amendment practices after budget adoption Complete the following activities Action # Action Review budget adopted for June 30, year end and determine that the 1 original budget did not adopt a deficit (overall deficit) budget Review budget amendments filed during the June 30, year and 2 determine the budget amendments did not indicate a deficit fund balance for June 30 To the extent a deficit budget was adopted, verify the Board of Education (or 3 other district representative) notified the Michigan Department of Education that a deficit was expected Verify that the budget contained within the district's financial system matches 4 the Board adopted budget Verify that the budget contained within the district's financial system matches 5 the budget in MEG Verify that the budget contained with the district's financial system matches the 6 bond and/or sinking fund monies Comments Completed by: 7 Pull (Number) of Board of Education meeting packets and verify the Board was provided with budget to actual information on a consistent basis 8 Verify the district posted their budget on their website as required under the transparency provisions of the State Aid Act 9 Verify the district posted budget amendments within 15 days of their adoption to their website as required 10 Identify the areas that had a negative budget variance of 3% or more in the past completed fiscal year 11 Are there prior year adjustments expected due to MTT adjustments in the past 36 months. If so, explain 12 Are you anticipating a prior year adjustment due to previous year special ed overpayment by the State 13 Identify the percentage of grant money spent each year for the past 2 fiscal years. 14 Identify the amount of grant carryover funds by grant for this fiscal year 15 Identify the indirect costs paid to the general fund (from grants) for each of the past two fiscal years 16 Do you anticipate / are you aware of any grant repayments due to disallowed costs? If so, how much, when and why 17 Confirm that business operating procedures are in place. Are the procedures documented? 18 Did you receive any one time revenue in the prior 2 years (eg. Sale of property). If so, how was it booked (which fund / account) 19 Did the district incur any one time expenses in the prior 2 years? If so, please identify purpose and amount 20 Does the district anticipate any one time expenditure or revenue for this fiscal year? If so, please identify purpose, amount and timing DRAFT 10/30/15 Items in bold may occur in a later phase

20 Date Started 5. Staffing Date Completed: Examine staffing and a comparison of staffing to peer districts (see tab 2). Complete the following activities Completed Action # Action Potential data source Comments by: 1 Calculate students per total staff FTE for district and peers REP 2 Identify students per teacher for district and peers Bulletin Calculate students per teacher FTE for district and peers REP 4 Calculate students per central office administrator REP 5 Calculate students per central office administrator FTE for district and peers. Complete only if Instruction Support, Business & Break down by the following key functional areas: OPTIONAL if necessary. Survey peer Admin expenditures per pupil (bulletin 1014) are Students / Instruction Administrator districts. Note conversations with peer higher than the peer average OR if General Students / Business Administrator districts will likely be required to distinguish Administration, Business Administration Students / HR Administrator between administrator, professional and expenditures per pupil (bulletin 1011) are higher Students / IT Administrator support staff than the peer average. See 9.6 and 9.7 Students / Total Central Office Administrator 6 7 Calculate students per central office professional FTE for district and peers. Break down by the following key functional areas: Students / Instruction professional staff Students / Business professional staff Students / HR professional staff Students / IT professional staff Students / Total Central Office professional staff Calculate students per central office support staff FTE for district and peers. Break down by the following key functional areas: Students / Instruction support staff Students / Business support staff Students / HR support staff Students / IT support staff Students / Total Central Office support staff 8 Calculate students per school administrator FTE for district and peers Survey peer districts OPTIONAL if necessary. Survey peer districts. Note conversations with peer districts will likely be required to distinguish between administrator, professional and support staff OPTIONAL if necessary. Survey peer districts. Note conversations with peer districts will likely be required to distinguish between administrator, professional and support staff 9 Calculate students per school support staff FTE for district and peers Survey peer districts 10 Calculate caseload per speech professional FTE for district and other districts District, National benchmarks, other districts under review undergoing review in county 11 Calculate students per guidance counselor FTE for district and other districts District, National benchmarks, other districts under review undergoing review in county 12 Calculate students per social worker FTE for district and other districts under District, National benchmarks, other districts review undergoing review in county 13 Calculate students per Psychologist FTE for district and other districts under District, National benchmarks, other districts review undergoing review in county 14 Calculate Special Ed pupils per professional FTE for district and peers SE4096 for each district 15 Calculate Special Ed pupils per aide FTE for district and peers SE4096 for each district 16 Calculate Special Ed staff per supervisory staff for district and peers SE4096 for each district 17 Calculate devices per IT Staff FTE for district and peers Survey peer districts 18 Calculate end users per IT Staff FTE for district and peers Survey peer districts 19 Provide teacher attrition rate for last 3 years Complete only if Instruction Support, Business & Admin expenditures per pupil (bulletin 1014) are higher than the peer average OR if General Administration, Business Administration expenditures per pupil (bulletin 1011) are higher than the peer average. See 9.6 and 9.7 Complete only if Instruction Support, Business & Admin expenditures per pupil (bulletin 1014) are higher than the peer average OR if General Administration, Business Administration expenditures per pupil (bulletin 1011) are higher than the peer average. See 9.6 and 9.7 Complete only if Total School Administration expenditures per pupil are higher than the peer average (bulletin 1011). See 9.5 DRAFT 10/30/15 Items in bold may occur in a later phase Items in blue may be optional, depending on other calculations

21 Date Started 6. Wages Date Completed: Examine wages and a comparison of wages to peer districts (see tab 2). Examine current and future cost of collective bargaining agreements Complete the following activities Action # Action Potential data source Comments 1 Using a variety of sources including the district's collective bargaining agreements as well as those of other peer districts, calculate the average wage per classification ISDs, Collective bargaining agreements, survey peers for central office administrators Completed by: 2 Using a variety of sources, identify the median wage per classification for district and peers ISDs, Collective bargaining agreements, survey peers for central office administrators 3 Using a variety of sources, identify the minimum / maximum wage per classification for district and peers ISDs, Collective bargaining agreements, survey peers for central office administrators 4 Review report from Finance identifying total wages by bargaining unit District business office for each of the last 3 years. (requested in 3a) 5 Review report from Finance identifying authorized staffing by position District business office with funding source (requested in 3a) 6 Review report from Finance identifying authorized staffing by labor group with funding source (requested in 3a) District business office 7 Identify the average teacher salary District business office 8 Review summary of all wage modifications by classification by year for District HR the last 5 years (requested in 3a) 9 Identify the number of employees paid at the minimum wage level District business office Review schedule of employees limited to the hours they work as a result of receiving retirement funds through ORS (requested in 3a) Review the number of part time employees by classification that qualify for ACA (requested in 3a) Review the compensated absence accural by bargaining unit for the last 3 years (requested in 3a) Review the average number of absences during the prior fiscal year for the following classifications: teacher, bus driver, parapros / instructional aides (requested in 3a) District HR District HR District HR District business office 14 Review the amount paid for substitute teachers for the prior 3 fiscal years District provided report 15 Identify substitute teacher expenditures per pupil (1870, 1xx, 221, 3xx) Download from MDE and compare to average of peer districts 16 Identify the number of long term (60+ day assignment) subs were used during the prior year District HR 17 Identify the total overtime paid by function for the prior year District business office 18 Identify the number of teachers that are at the top step of their column District business office 19 Identify the cost of a vertical step for each of the last 3 years; compare to same for peer districts District business office, peer CBAs 20 identify the cost of a lane for each of the last 3 years; compare to same for peer district District business office, peer CBAs 21 Identify the classifications that receive stipends and what was the total cost of stipends paid last fiscal year District CBA and payroll system 22 Identify the classifications that receive extra duty pay and what was the total cost of extra duty pay paid last fiscal year District CBA and payroll system 23 Identify what triggers overtime pay per the CBA by classification District CBA Teacher: Bus Driver: Para Pros / Instructional Aides: DRAFT 10/30/15 Items in bold may occur in a later phase

22 Date Started 7. Benefits Date Completed: Examine benefits and compare to peer districts (see tab 2). Examine current and future cost of collective bargaining agreements Please complete the following activities Action # Action Potential data source Comments Calculate benefits as a percentage of salaries for the LEA and peer districts (see tab 2) for the following areas: Instruction Support Services Calculate benefits as a percentage of salaries for LEA and peer districts (see tab 2): Health Dental Vision Workers comp Unemployment Identify the last time the District solicited proposals for health care insurance Does the District adhere to a hard cap on employer contributions or 80/20%? Bulletin 1011 (Download underlying data for Bulletin 1011 to get district level data) ISDs, Collective bargaining agreements District HR District HR 5 If hard cap, identify the cap amount (Statutory or less?) District HR 6 Is there a sick leave payment policy in place? If so, determine the payout District HR 7 Is sick leave paid to retirees only or resignations as well? District HR 8 Determine whether vacation accrual is capped (identify by bargaining unit) District HR, CBA 9 Conduct a high level review of insurance offerings and compare to District insurance offerings, district peers websites 10 Identify whether staff are paid for snow days by bargaining unit CBAs from website Review minimum qualification for benefits for each classification; compare to peers Identify minimum work guarantees (e.g., transportation) and calculate associated cost of benefits / additional pay Identify paid time off by classification and calculate total possible cost for current fiscal year Identify workers comp costs per employee (2840, 1xx 3xx, 45x) and compare to average of peer districts Calculate unemployment comp costs per employee (2850, 1xx 3xx, 45x). Identify anticipated costs for this year. Identify anticipated unemployment costs for next year Identify whether staff receive unemployment costs during the summer? If so, to what extent Review report identifying number of open workers comp cases and reserves set aside for each case Review the last quarterly report identifying who has received unemployment CBAs from website District CBA and interviews with supervisors District CBA Download from MDE Download from MDE; forecast from district District business office District provided report (tab 3a) District provided report (tab 3a) Single: Dual: Family: Completed by: DRAFT 10/30/15 Items in bold may occur in a later phase

23 Date Started 8. Facilities including Utilization Deferred Maintenance Date Completed: Examine building utilization for each school. Examine deferred maintenance and capital investment needs Please complete the following activities Action # Action Potential data source Comments 1 District facilities for building Calculate the % utilization (students / building capacity) by building for capacities; district ERP for student each of the last 3 years enrollment by facility 2 Contact municipalities to identify housing starts. Compare to building capacity / utilization Municipalities 3 Is the district renting facility space from others? If so, identify building District business office and purpose Is the district renting out district owned facilities / space? If so, 4 identify building and purpose and the rental income income for the last District business office 3 years 5 Are custodial services included in the rent charged to outside organizations? District business office 6 Identify all closed / unused district owned facilities District facilities department 7 Identify whether there a disposition plan in place for unused facilities District facilities department 8 Identify all facilities / boilers / playground / bleachers that received citations in the past 3 years District facilities department 9 Has the district completed a facility condition assessment and physical asset inventory in the past 24 months? If not, request that these activities be completed District facilities department 10 Review facility condition assessment; identify any areas that are in District provided within last 24 critical need of addressing within next 36 months months 11 Review IT inventory and associated age. Identify any devices in critical District provided within last 24 need of replacement within next 36 months months 12 Review IT infrastructure and associated age. Identify items in critical need of replacement within next 36 months District inventory 13 Do you have an emergency operating plan (includes both security and disaster response) for each building? List buildings that do not have a District facilities department plan in place. 14 Identify actions take regarding energy conservation District facilities department 15 Determine whether the district purchases utilities (gas, electric) on the District facilities department open market Completed by: DRAFT 10/30/15 Items in bold may occur in a later phase

24 Date Started 9. Non Instructional Date Completed: Examine non instructional costs by function and compare to peers (see tab 2) Please complete the following activities: Action # Action Potential data source Comments 1 Download underlying data file for Bulletin 1011 Calculate Pupil services per pupil expenditure (21x) for LEA and peers 2 (see Tab 2). Identify significant variances between LEA and the Bulletin 1011 average of the peers. Calculate Instructional staff services per pupil expenditure (22x) for LEA 3 and peers. Identify significant variances between LEA and the average Bulletin 1011 of the peers. Calculate Instructional Related Technology (225) per pupil expenditure 4 for LEA and peers. Identify significant variances between LEA and the Request FID files from CEPI / MDE average of the peers. Calculate School Administration per pupil expenditure (24x) for LEA 5 and peers. Identify significant variances between LEA and the average Bulletin 1011 of the peers. Calculate General administration per pupil expenditure (23x) for LEA 6 and peers. Identify significant variances between LEA and the average Bulletin 1011 of the peers. Calculate Business services per pupil expenditure (25x) for LEA and 7 peers. Identify significant variances between LEA and the average of Bulletin 1011 the peers. Calculate Operations & Maintenance per pupil expenditure (26x) for 8 LEA and peers. Identify significant variances between LEA and the Bulletin 1011 average of the peers. Calculate Transportation per pupil expenditure (27x) for LEA and peers. 9 Identify significant variances between LEA and the average of the Bulletin 1011 peers. Calculate Other support services per pupil expenditure (28x, 292, ) for LEA and peers. Identify significant variances between LEA and Bulletin 1011 the average of the peers. Calculate Total current operating expenditures per pupil for LEA and 11 peers. Identify significant variances between LEA and the average of Bulletin 1011 the peers. 12 Identify cost per rider for RE, SE and overall for LEA and peers. SE4094 for LEA and peer districts, Compare LEA to average of peers AND compare to appropriate region MSBO Transportation Study in MSBO survey. 13 Identify cost per bus for RE, SE and overall for LEA and peers. Compare SE4094 for LEA and peer districts, LEA to average of peers AND compare to appropriate region in MSBO MSBO Transportation Study survey. 14 Calculate number of buses per mechanic for LEA. Compare to appropriate region in MSBO survey MSBO Transportation Study 15 Calculate % of transportation costs spent on field trips / athletic trips District transportation office Completed by: 16 Identify the number of non public schools students transported by LEA and peers SE4094 for LEA and peer districts Calculate if district costs are higher than peers for items Identify transportation costs associated with center programs District financial system 18 Identify transportation costs associated with transporting homeless students District transportation office 19 Calculate average age and number of miles for active fleet of buses District transportation office Identify maintenance cost as % of expenditures. Compare to appropriate region is MSBO survey Identify maintenance expenditures per student. Compare to appropriate region in MSBO survey Identify maintenance expenditures per sq ft of instructional space. Compare to appropriate region in MSBO survey Identify utilities cost per sq ft of instructional space. Compare to appropriate region in MSBO survey Calculate square footage per custodial FTE. Compare to appropriate region in MSBO Survey Calculate square footage per skilled trades FTE. Compare to appropriate region in MSBO Survey Calculate square footage per grounds FTE. Compare to appropriate region in MSBO Survey Individual district provided data compared to MSBO survey Individual district provided data compared to MSBO survey Individual district provided data compared to MSBO survey Individual district provided data compared to MSBO survey Individual district provided data compared to MSBO survey Individual district provided data compared to MSBO survey Individual district provided data compared to MSBO survey DRAFT 10/30/15 Items in bold may occur in a later phase Items in blue may be optional, depending on other calculations

25 9. Non Instructional 27 Calculate the IT operational spend per student Peer surveys 28 Calculate the IT spend per end user Peer surveys 29 Identify the amount of money applied for and received through the USF erate program for the last 3 years District technology office 30 Identify amount of transfers between Food Service and general fund for last 3 years District financial system 31 Identify the fund to which lunch aides are charged District financial system 32 Identify the average internet bandwidth per student District IT 33 Identify the internet bandwidth availability per device District IT DRAFT 10/30/15 Items in bold may occur in a later phase Items in blue may be optional, depending on other calculations

26 10. Enrollmt Proj Date Started Date Completed: Examine enrollment projections methods and history Complete the following activities Action # Action Potential data source Comments 1 Compare projected enrollment to actual for past 5 years Enrollment projections, district ERP 2 identify methodology used for projections by building or district overall Enrollment projection report 3 Identify number of residents attending other schools for past 3 years to identify trend Instruction Department 4 Identify number of non resident / school of choice attending district for past 3 years to identify trend District SIS 5 Review the number of 105 / 105c students by category for last year District provided report (see tab 3a) 6 7 Identify the number of students attending a CFE campus last school year; how many slots were allocated to the district Identify the percentage of GSRP funded pre school slots have been used for each of the past 3 years Instruction Department Instruction Department # of AM students: # of PM students: Slots allocated: Completed by: DRAFT 10/30/15 Items in bold may occur in a later phase

27 Date Started 11. Other Date Completed: Please complete the following activities Action # Action Potential data source Comments 1 Identify the total expenditures for athletics for the prior fiscal year District business office 2 Identify the total income for athletic events including concessions, payto play and tickets District business office 3 Determine the amount, if any, collected for pay to play last school year 4 Are athletics offered at the middle school level Athletic director Boys: Completed by: 5 List the sports offered at the HS Athletic director Girls: 6 Does the district have a full time, dedicated athletic director? District HR 7 Does the athletics program have a dedicated secretary / assistant? District HR Determine whether the district has offered an early retirement incentive in the past 5 years. If so, obtain a copy of the debt service associated with the ERI Determine whether there is long term debt not supported by a dedicated millage (e.g., energy, performance bonds, etc.) Identify the special instructional programs in place which cost more than the typical classroom per pupil cost at a given grade level (e.g., IB, AP, foreign language immersion programs, 1 to 1 computing, elementary foreign language). Provide the student / teacher ratio for each program District HR District business office DRAFT 10/30/15 Items in bold may occur in a later phase

28 How will Treasury make the determination of potential for fiscal stress? State treasurer may declare that the potential for fiscal stress exists if: An operating deficit may arise within a school district, intermediate school district, or public school academy during the current school fiscal year or the following 2 school fiscal years A school district may be unable to meet its financial obligations while also satisfying the school district s obligations or abilities to provide public educational services in a manner that complies with this act, the state school aid act of 1979, and applicable rules. Based on the following factors a) Financial data or other information submitted by the school district, intermediate school district, or public school academy to a state department or agency. b) Financial data or other information included within an audited financial statement of the school district, intermediate school district, or public school academy. c) Financial data or other information provided to a state department, agency, or authority in connection with a request to issue bonds, notes, or other debt obligations, including, but not limited to, information relating to a request for a loan under the emergency municipal loan act, 1980 PA 243, MCL to d) Financial data or other information included within a recommended budget, budget, or general appropriations act of the school district, intermediate school district, or public school academy. e) Financial data or other information provided to a state department, agency, or authority by an officer, employee, contractor, or agent of the school district, intermediate school district, or public school academy. f) For a school district, data relating to pupil enrollment, including, but not limited to, residents of other school districts enrolled in the school district and residents of the school district enrolled in another school district or in a public school not operated by the school district. g) For a school district, financial data or other information provided to the department or department of treasury by the intermediate school district in which the school district is located Treasury intends to also use a stress test which will score multiple factors (see attachments which are drafts of the stress test documents)

29 *DRAFT SUBJECT TO FINAL APPROVAL* Indicator Scoring INDICATOR DESCRIPTION MAX SCORE Indicator 1: Fund Balance % of Revenues 3 Points= Fund Balance % of Revenues decrease by greater than 10% 2 Points= Fund Balance % of Revenues decrease 7% to 10% 1 Points= Fund Balance % of Revenues decrease 5% to 7% 0 Point= Fund Balance % of Revenues decrease less than 5 % 3 Indicator 1 Continued: Previous year: Fund Balance % of Revenues 3 Points= Fund Balance % of Revenues decrease by greater than 10% 2 Points= Fund Balance % of Revenues decrease 7% to 10% 1 Points= Fund Balance % of Revenues decrease 5% to 7% 0 Point= Fund Balance % of Revenues decrease less than 5 % 3 Indicator 1 Continued: Two Years Previous: Fund Balance % of Revenues 3 Points= Fund Balance % of Revenues decrease by greater than 10% 2 Points= Fund Balance % of Revenues decrease 7% to 10% 1 Points= Fund Balance % of Revenues decrease 5% to 7% 0 Point= Fund Balance % of Revenues decrease less than 5 % 3 Indicator 2: Revenues / Expenditures Indicator 4: Days Cash on Hand (Cash/ 360 Day Average Expenditure) Indicator 5: FTE Enrollment Trend 4 Points= Revenues exceed Expenditures for four of last four years 3 Points= Revenues exceed Expenditures for three of last four years 2 Points= Revenues exceed Expenditures for two of last four years 1 Point= Revenues exceed Expenditures for one of last four years 0 Point= Revenues exceed Expenditures for zero of last four years 2 Points= Days Cash on Hand less than 15 1 Point= Days Cash on Hand greater than 15, but less than 30 0 Point= Days Cash on Hand greater than 30 4 Points= FTE enrollment trend negative for four of last four years 3 Points= FTE enrollment trend negative for three of last four years 2 Points= FTE enrollment trend negative for two of last four years 1 Point= FTE enrollment trend negative for one of last four years 0 Point= FTE enrollment trend negative for zero of last four years Indicator 6: Change in Expenditure per Pupil 2 Points= Increase in expenditure per pupil for two of last three years 1 Point= Increase in expenditure per pupil for one of last three years 0 Point= Increase in expenditure per pupil for zero of last three years 2 TOTAL Score > 14.7 (70% of total points) 21

30 Office of School Review and Fiscal Accountability School Districts Fiscal Stress Indicators General Fund Draft - Subject to Final Approval 11/10/2015 Define Metric Account Fund Internal Measurements Indicator 1: Fund Balance % of Revenues Five Year Trend The excess of general fund over its revenues for meeting future school district program operations Fund Balance 11 Revenue 11 A key measure of a district's fiscal health is the size of the fund balance relative to the total annual revenues. Fund balance is needed for cushion against unexpected revenue downturns or emergencies. Indicator 2: Measures whether revenue exceeds expenditure. A result < 1 Revenue 11 indicates expenditure exceeded revenue for the fiscal year. Revenues / Expenditures Five Year Trend Expenditure 11 A measurement of whether revenue collected is exceeding expenses. A strong indicator of a district's financial health as it will show whether cash flow is positive or negative while meeting all current obligations. Indicator 3: Accounts Payable/ Revenues Accounts Payable 11 Outstanding accounts payable over revenues. Five Year Trend The relationship between outstanding accounts payable and revenues collected. A higher percentage may show a district's difficulty in paying current obligations. This measurement is related to the Cash on Hand indicator, demonstrating a district's liquidity. Revenue 11 Indicator 4: Cash on Hand Cash/360 day Average of Expenditures Five Year Trend Measures how many days' of cash the district has on hand, on average, at the end of each month to cover expenditures. Daily expenditures are calculated as the total expenditures (General Fund) over 360 days. Days' cash on hand is the average ending cash and investments divided by average daily expenditures. Cash 11 Expenditure / Demonstrates a district's ability to meet unexpected changes in revenues and/or expenditures. Indicator 5: Enrollment Trend 8-10 Year Trend Percentage change in enrollment over specific time period Michigan Student Data System- Full Audit FTE. For LEAs & PSAs=FALL TOT_SPEC + FALL FTE_GT_FT For ISDs= FALL ISD_GT Enrollment changes are reflective of demographic changes and choice within the district. This trend will affect the revenues and expenditures, posing potential challenges for the district.

31 Office of School Review and Fiscal Accountability School Districts Fiscal Stress Indicators General Fund Draft - Subject to Final Approval 11/10/2015 Define Metric Account Fund Internal Measurements Indicator 6: Indicator 7: Expenditures per Pupil Five Year Trend General fund expenditures per pupil Expenditure 11 Pupil FTE Count Evaluates the overall cost per FTE or per pupil of the Retirement expenses Retirement Cost retirement expense as a percent of revenue Five Year Trend Revenue 11 Michigan Student Data System- Full Audit FTE. For LEAs & PSAs=FALL TOT_SPEC + FALL FTE_GT_FT For ISDs= FALL ISD_GT Evaluates a district's financial operations to evaluate how consistently they manage resources. To determine the level of funding per pupil which can be compared to other districts. Measures the level of retirement spending per pupil or FTE as percent of revenue. Can compare to enrollment trends and changes in retirement spending. Indicator 8: Tax Burden per Local Citizen Five Year Trend Tax burden per citizen Taxes Measure the effect the school related taxes and other local taxes have on citizens. For example, declining property value can lead to an increase in tax rates in order to generate the same amount of revenue. This would increase the tax burden for citizens. Citizen Count Indicator 9: Population Trend 8-10 Year Trend Percentage change in population over specific time period Citizen Count Demographic changes e.g. birth rate, in the population can affect enrollment. Indicator 10: Credit Rating Current credit rating provided by the major rating agencies, S&P, Fitch, and Moody's. An indicator of the financial health of a district. Evaluates the history of borrowing and demonstrates the ability of a district to under take borrowing and repay its obligations. Credit rating from one of the major rating agencies Indicator 11: School of Choice To evaluate the number of non-residents and residents enrolled at specified school district Refer to MI School Data website- Non Resident Status reports Helps gauge potential enrollment volatility in the district. Evaluates how many students are residents of the district.

32 If a district is found by Treasury to be in potential Fiscal Stress and does NOT select the ISD Administrative Review option. Treasury can then require the District to submit periodic financial Status reports for up to 4 years. If a school district is required to submit periodic financial status reports, the school district shall do all of the following: a) Submit a periodic financial status report in the form and manner and on the periodic basis prescribed by the department of treasury, after approval by the governing body of the school district. b) Transmit a copy of each periodic financial status report required under this section to the members of its governing body. c) Provide the department of treasury with other financial data or information relating to the financial conditions of the school district, intermediate school district, or public school academy as requested by the department of treasury. d) Allow the department of treasury to examine financial records and books of account of the school district. e) Promptly and fully provide the assistance and information necessary and properly requested by the department of treasury in the exercise of the department of treasury s duties under this section. If the state treasurer determines that information included on a periodic financial status report indicates that fiscal stress exists within the school district ----or----- that a deficit has occurred or is projected to occur within the school district within the current school fiscal year or the next school fiscal year and that the school district lacks the capacity to address the deficit without state assistance, then the state treasurer may require the school district to submit an enhanced deficit elimination plan. Treasury may determine that the district is SUBJECT TO RAPIDLY DETERIORATING FINANCIAL CIRCUMSTANCES, PERSISTENTLY DECLINING ENROLLMENT, OR OTHER INDICATORS OF FINANCIAL STRESS LIKELY TO RESULT IN RECURRING OPERATING DEFICITS OR RECURRING FINANCIAL STRESS WITHIN THE SCHOOL DISTRICT. If Treasury makes such a determination Treasury will then require the District to submit an Enhanced Deficit Elimination Plan or EDEP. An enhanced deficit elimination plan shall provide for the resolution of the deteriorating financial circumstances, persistently declining enrollment, or other indicators of recurring operating deficits or recurring financial stress and is subject to approval by the State Treasurer.

33 The District shall also be required to submit enhanced monthly monitoring reports on revenue, expenditures, cash flow, debt, other liabilities, assets, budget amendments, pupil membership and other data relating to the finances of the school district. As a condition of approving the enhanced deficit elimination plan, the state treasurer may require a school district to submit an enhanced deficit elimination plan and to enter into a FINANCIAL RECOVERY AGREEMENT with the state treasurer. A FINANCIAL RECOVERY AGREEMENT may provide for, but it not limited to, all of the following: a) Assistance and guidance from the department of treasury and other state departments and agencies. b) A financial and operating plan for the school district, intermediate school district, or public school academy. c) The appointment of a local auditor or inspector, or both. d) Remedial measures or other action under this act necessary to address the financial circumstances of the school district, intermediate school district, or public school academy. e) The required retention by the school district of a consultant or 1 or more other experts for the purpose of assisting the school district to achieve the goals and objectives of the financial recovery agreement (significant cost issue) The state treasurer may establish the period of time within which a school district must eliminate its deficit and may set SPECIAL CONDITIONS THAT THE SCHOOL DISTRICT MUST MEET WHILE THE ENHANCED DEFICIT ELIMINATION PLAN IS IN EFFECT. To assure greater coordination and effective partnerships in the development and implementation of an enhanced deficit elimination plan, when administering subsections (5), (6), and (9), the department of treasury shall consult with all of the following: a) The department. b) The school district required to submit an enhanced deficit elimination plan c) The superintendent of the intermediate school district in which the school district is located. Public Act 113 of 2015: IF A SCHOOL DISTRICT IS SUBJECT TO AN ENHANCED DEFICIT ELIMINATION PLAN UNDER SECTION 1220 OF THE REVISED SCHOOL CODE, 1976 PA 451, MCL , AND THE STATE TREASURER DETERMINES THAT THE SCHOOL DISTRICT HAS FAILED TO SUBMIT OR COMPLY WITH THE REQUIREMENTS OF THE ENHANCED DEFICIT ELIMINATION PLAN, THE STATE TREASURER MAY DECLARE THAT A FINANCIAL EMERGENCY EXISTS WITHIN THE SCHOOL DISTRICT AND RECOMMEND THAT THE GOVERNOR APPOINT AN EMERGENCY MANAGER TO ADDRESS THE FINANCIAL EMERGENCY WITHIN THE SCHOOL DISTRICT.

34 Early Warning Legislation More Attention to Financial Condition Laura Claeys, Plante Moran

35 Early Warning Legislation Package of bills aimed at identifying and intervening with districts deemed to be in distress before it is too late Signed in July 2015, the 6 Public Acts (PA ) attempt to create a system of triggers that will require reporting to the State and allow them to make assessments along the way as to whether a district needs intervention The first step occurred in August 2015 with the reporting of budgetary assumptions by those districts that met certain criteria 2

36 A Visual Look at Early Warning Here is what this whole thing looks like: 3

37 4 A Visual Look at Early Warning

38 5 A Visual Look at Early Warning

39 6 A Visual Look at Early Warning

40 7 A Visual Look at Early Warning

41 8 A Visual Look at Early Warning

42 9 Here We Go!

43 First Identifying Criteria For those districts with general fund balance (total) LESS than 5% of general fund revenue for either June 30, 2014 or June 30, 2015 Reported by August 7, 2015 (future years will be July 7 th ) Foundation allowance used in budget for FY 2016 Enrollment used in budget for FY 2016 Expenditures per pupil for immediately preceding fiscal year (June 2015) Expenditures per pupil for FY 2016 (using budgeted expenditures divided by enrollment used in budget) Do these items sound familiar from this morning?? 10

44 Then What Treasury takes this information and is comparing it to audits (comparing current and prior year audit results) This month, Treasury is applying stress indicators to the FID data received from all districts In February 2016, Treasury will identify districts in potential financial stress They have 14 days after declaring a district has potential stress to notify the school board They will also notify the school board that they can contract with the ISD to perform a review of the district (rather than have the state do it) 11

45 Key Concerns / Questions Treasury can identify districts by using data: That MAY be facing the potential for fiscal stress That MAY develop an operating deficit (in current fiscal year or the following 2 fiscal years) That MAY be unable to meet its financial obligations while also providing services Data comes from the district, other state agencies, looking at resident/nonresident enrollment statistics, etc. through various submissions 12

46 What is Fiscal Stress? Defined in PA 109 Unable to meet short or long-term obligations Meeting any of the triggers as listed in PA 436 of 2012 (the Local Financial Stability and Choice Act) here are a few highlights: Creditor indicates non payments > 6 months of amounts more than $10,000 or 1% of revenue (greater of) Late payments to retirement system Default on bond payments Late filed audit Breach of DEP Court ordered additional tax levy Other 13

47 What is Fiscal Stress? Treasury is trying to identify other indicators, such as: Fund balance as a percent of revenue (5 year trend) Revenues Over Expenditures (5 year trend) Accounts payable over Revenue (5 year trend) Days of cash on hand (5 year trend) Enrollment trends (8-10 year trend) Expenditures per pupil (5 year trend) Retirement cost as a percent of revenue (5 year trend) Tax burden per citizen (5 year trend) Population trends (8-10 year trend) Credit rating Schools of Choice Note these indicators have not yet been approved 14

48 What Happens if Potential Fiscal Distress is Identified? If potential fiscal distress is identified Treasury must notify the board within 14 days of this declaration Treasury must notify the board that it can contract with an ISD to do an administrative review The contract with an ISD must be entered into within 60 days of receiving notification from Treasury (Treasury must be consulted on the content of the contract) 15

49 ISD Administrative Review What Does That Look Like? The ISD Administrative Review Must occur within 90 days of entering into the contract Must issue recommendations that should be taken to avoid a deficit Once issued, the report must also go to Treasury and then quarterly reports are required to report on the status of the recommendations 16

50 ISD Administrative Review What Does That Look Like? The ISD Administrative Review Under PA 109, the review shall include ALL of the following (but not limited to just these items): Examine financial practices and compliance with budget act, including budget to actual monitoring Examine Staffing compared to other districts Wages compared to other districts Benefit costs as percentage of wages (and compared to other districts) Student capacity utilization review (i.e. how full are the buildings) Non-instructional costs by function (and compare to other districts) 17

51 ISD Administrative Review What Does That Look Like? The ISD Administrative Review Examine (continued): Enrollment projection history and methods Deferred maintenance and capital needs (including technology) Substitute costs, workers compensation costs, unemployment costs Pupil transportation costs and routing Current and future costs of existing bargaining agreements 18

52 ISD Administrative Review What Does That Look Like? The ISD Administrative Review Recommendations are required to be considered and some of them implemented If NO recommendations are implemented within one year, then district would be subjected to periodic financial reporting District has 2 years before any additional reporting could be required, if they are working with the ISD on the recommendation implementation 19

53 Current State of Affairs Preliminary reviews (under PA 110) for those districts currently subject to a DEP that shows the deficit taking LONGER than 5 years to eliminate The Emergency Loan Board (ELB) will initiate the review of these districts in January 2016 There are 11 of them» Does not include Detroit Public Schools If ELB determines fiscal stress, the Governor will appoint a review team to determine if a financial emergency exists If financial emergency exists, then the options under PA 436 kick in Consent agreement Emergency manager Neutral Evaluation Chapter 9 bankruptcy 20

54 Why Should you Care if You are Not Currently in Distress? Even if your district is in good shape today: Monitor the fund balance metric (as it is the one that starts the ball rolling) Consider if some of those ISD review items make sense to look at now (through conversation with administration) With changes in school funding and the trend that most districts are using fund balance it is possible you will be on the radar at some point Keeping the budget discussion in mind, the expectation from Treasury is the Board has some understanding of the finances - being prepared can only help Main goal of all of this, as onerous as it seems, is to prevent districts from financial peril which impacts the kids 21

55 Thank you! Laura Claeys