Administration 101 Budget. July 28, 2009

Transcription

1 Administration 101 Budget July 28, 2009

2 Who Are We? Peter Hardash Vice Chancellor Business Operations/Fiscal Services, Rancho Santiago Community College District Multi-college district Jim Austin Vice President, Business and Administrative Services, MiraCosta Community College District; former Interim Vice Chancellor, Fiscal Policy, California Community Colleges Single college basic aid" district

3 Who Are You? Faculty Staff Manager Union Representative ti What are your Expectations From Us? Index card survey questions Questions from the group If we don t know the answer, we ll make one up

4 Outline for the Morning State Budget Cycle & Process Allocation of Resources to the California Community College System (CCC) Proposition 98 tests CCC Apportionment Process & Cycle Process & cycle Apportionment Process Workload Measures Apportionment Calculations District level Reports and claims Accounting basics Types of Funds

5 Outline Continued Capital Projects Current Issues Current Fiscal News Sources for Additional Information Attachments Links Questions, Answers, Farewell

6 SLO s of Adm 101 Budget What do we expect of you After this morning s session the attendees should: Understand how the state distributes funds to the California Community College system, and know where to find up-todate information about the distribution process Understand how the California Community College system allocates funds to the districts within the system, and know how to find the allocations to the districts Understand how the districts account for the funds entrusted to them, and know where to find the rules governing the accounting for community college funds

7 State t Budget Cycle

8 Normal State Budget Cycle - Overview January Governor proposes budget May Governor issues revised budget based upon The May Revise After May the real action starts Sometime between June and October there is a signed budget The next slide shows more complexity

9 State Budget Cycle January Governor Proposes March Assembly Committee on Education Sub-Committee on Finance LAO Report mid-february Senate Committee on Education Sub-Committee on Budget & Finance May Assembly Adoption May Revise mid-may Senate Adoption June Joint Committee - Legislative Budget Late June-July Assembly Adoption Senate Adoption July-August Governor's Final Actions

10 State t Budget Cycle This past year has been everything but normal budget approved in September Two weeks later billions out of balance budget adjusted and budget approved on February 20, 2009 One month later both billions out of balance Currently, state legislature and governor still trying to fix and budgets

11 Budget Calendar January February Board of Trustees Budget Assumptions Budget Allocation Committee (Ongoing through the year) District Budget Allocation March 15 (Sends to) Business & Fiscal Services Mountain Beach DO April 10 (Return to) June 25 July 10 August 1 September 10 September to June Business & Fiscal Services Board of Trustees Tentative Budget Mountain Beach DO Proposed Budget Board of Trustees Adopted Budget Board of Trustees Ongoing transfers

12 Allocation of Resources to the California Allocation of Resources to the California Community College System (CCC)

13 Allocation of Resources to the California Community College System (CCC) Proposition 98 Minimum % of State Budget (revenue) to K-14 Tax vs. Fee Three Tests The Split K-12 vs. CC s Its calculation The importance of K-12 growth See Proposition 98 Primer in your binder

14 Prop 98 - Three Tests Each Year, the Proposition 98 Funding Level Is Determined by One of Three Formulas (Tests) Test 1: Roughly 40 percent of General Fund revenues must be dedicated to Proposition 98. This minimum requirement must be met each year. Test 2: The Proposition 98 requirement is determined by growth in the economy (as measured by per capita personal income) and K-12 attendance. Applies in years when state General Fund growth is relatively healthy and formula yields more than under Test 1. Test 3: The Proposition 98 requirement is determined by Test 3: The Proposition 98 requirement is determined by per capita growth in General Fund revenues and K-12 attendance. Applies in years when the General Fund grows more slowly than the economy and formula yields more than under Test 1.

15 Prop 98 - Three Tests State Can Also Provide More or Less Than the Applicable Formula Requires Providing more increases the base moving forward. Providing less requires suspending the minimum guarantee. In Years When the State Provides Less Than Test 2 Through Test 3 or Suspension Maintenance Factor Is Created Whenever maintenance factor is created, the Constitution, requires the state to provide accelerated growth in Proposition 98 funding in future years (until the long-term Test 2 is reached)

16 CCC Apportionment Process

17 Apportionment 72 College Districts receive allocated funds in the Apportionment process (California has 110 Community Colleges and 64 Education Centers.) Newest est Woodland College (Yuba CCD) Allocations distributed through the apportionment t process affect the current year and the prior year ONLY.

18 Apportionment From the State s Perspective What is Apportionment? An efficient way to distribute large amounts of funds A cash management mechanism for the State: involves coordination with State Controller s Office, State Treasurer s Office, and the Department of Finance.

19 Normal Apportionment Payment Distribution ADVANCE P-1 P-2 Total Jul 8% Feb 8% June 8% Aug 8% Mar 8% Sep 12% Apr 8% Oct 10% May 8% Nov 9% Dec 5% Jan 8% Total 60% 32% 8% 100%

20 Summary of the Apportionment Process Advanced Apportionment in the Fall (Remember districts started to develop budget in January and adopt a Tentative Budget in June) P-1 in early February P-2 in July following the fiscal year Recalculation in January following the fiscal year

21 Apportionment Cycle - January Governor s proposed budget for the next year (budget year) First CCC revenue and COLA estimates for budget year Recalculation for prior year (prior year) P-1 (First Principal Apportionment) for current year (fiscal year); based on Fall FTES

22 Apportionment Cycle - May Revise P-2 (Second Principal Apportionment) for Current Year Refined revenue estimate for next fiscal year Statutory COLA for budget year (By June 30 th districts must adopt a Tentative ( y p Budget for the budget year)

23 Apportionment Cycle Fall of the New Fiscal Year Advanced Apportionment what a district might earn

24 Apportionment Cycle back to January Note, the districts still do not have a firm commitment for the current year, fiscal year income Note, the districts finally get an almostfinal allocation for the prior fiscal year

25 32- Month Budget Cycle Year One Year Two Year Three Year Four Year Five

26 CCC Apportionment Calculation Based upon Recommendations of CBO workgroup SB 361 (Scott) California Education Code California Code of Regulations, Title 5, Documents are in your binder

27 CCC Apportionment Calculation The Basics potential ti Apportionment t Base Allocation Number of colleges and centers Credit FTES Noncredit FTES Career Development & College Prep. FTES CDCP Inflation Adjustment Growth Review of Exhibit C in your binder

28 CCC Apportionment t Calculation l The Basics Sources of Funds for a District Three sources, in this order: 1. Local Property Taxes 2. Student Enrollment Fees (98%) 3. State General Fund Basic Aid Districts 3 Mira Costa, Marin, So. Orange

29 Property Taxes Prop 13 2% per year max Assessed Valuation (AV) increase Prop 8 AV adjusted downward to reflect market value. Adjusts every year until AV catches up with Prop 13 adjusted AV Delinquent tax collections Teeter Plan Negative Education Revenue Augmentation Funds (ERAF) Triple Flip High default and delinquency rates throughout High default and delinquency rates throughout the State

30 Why are Property Tax Collections Important? An offset to State Apportionment Generally overstated by Department of Finance to help balance the State Budget K-12 Education is automatically backfilled by the State when shortfalls are realized Continuing Appropriation p language g Community College Districts do not have automatic backfill Automatic deficit applied to Apportionments CC Districts must pursue backfill funding in the following budget year Loss of funds in shortfall year Loss of funds in shortfall year Hardly ever covers actual loss

31 Why are Property Tax Collections Important? Calculated FTES Revenue Less -Property Taxes Less - Student t Tuition Fees (98%) Equals - State Aid $135 million $41 million $5 million $89 million

32 FTES Funding Rates Base Funding Rates Credit $4, Non Credit - $2, CDCP - $3, Non-deficited rates

33 Growth Why FTES growth is important FTES vs. Enrollment What happens when a district doesn t grow in FTES? Stabilization Funding 1 year What happens when a district has declined in FTES? Restoration 3 years

34 District Level Reports and Claims

35 Annual CCFS 320 CCFS= Community College Fiscal Standards 320 Report = Summaries Annual Admissions and Enrollment Services Information FTES = Full-time Equivalent Students DSCH = Daily Student Contact Hours WSCH = Weekly Student Contact Hours

36 Attendance Accounting Full-Time Equivalent Students (FTES) Positive Attendance Non-Regular Basis Open p Entry / Open Exit Non-Credit Actual Attendance 525 hours = 1 FTES (175 days x 3 hours = 525 hours)

37 Attendance Accounting Census Week Regular Basis Enrollment 44 th Week Enrollees x Hours x 17.5 Weeks = Number of WSCH (WSCH / 525 = # FTES)

38 CCFS 320 Report Attendance Accounting to the CCCO (California Community Colleges Chancellor s Office Due dates P1 January 15 P2 April 15 PA July 15

39 CCFS 311 and CCFS 311Q Fiscal reporting Source for the Fiscal Data Abstract (in your binder) Source of multi-year trend analysis ancefacilities/fiscalservices/fiscalaccountabilit y/districtfiscaltrentanalysis /tabid/969/ Default.aspx

40 CCFS-311Q Chancellor s Office quarterly monitoring of the general fund. Annual Revenues, Expenses & FTES for four years, General Fund Cash Balance and Y-T-D Revenues and Expenses for the current quarter Reports for Quarters 1, 2, 3 are due 45 days after the end of the quarter. Quarter 4 is due August 31.

41 Budget Allocation

42 How Districts Allocate their All over the map Budgets Usually formula based Distribution of Funds is always an issue Single College Districts i t vs. Multi College Districts Newer College vs. Older College Sibling Rivalry

43 How Districts Allocate their Budgets The distribution is always an issue Key elements Transparency Inclusive process Know how it s done in your district!

44 CC Accounting Basics

45 BAM BUDGET AND ACCOUNTING MANUAL Issued for California Community Colleges in accordance to the Calif. Code of Regulations (CCR). Currently being updated by the Fiscal Standards and Accountability Committee of ACBO and the Chancellor s Office

46 BAM On-line ns/financefacilities/fiscalservices/fiscal StandardsInformation/BudgetandAccounti ngmanual/tabid/381/default.aspx

47 BAM On-line ns/financefacilities/fiscalservices/fiscal StandardsInformation/BudgetandAccounti ngmanual/tabid/381/default.aspx

48 Accounting Overview Fund Accounting Fund Structure Sources of Revenue Expense Categories

49 Fund Accounting Governmental agencies operate on a fund accounting basis. Each fund is a self balancing set of accounts. Fund accounting is used as a control device to separate financial resources to insure funds are used for their intended purposes.

50 Fund Accounting Basics Fund Entity Program Source Activity (TOPs) Where Object What

51 Fund Structure 10 General Fund 20 Debt Service Funds 30 Special Revenue Funds 40 Capital Projects 50 Enterprise Funds 60 Internal Service Funds 70 Trust Funds 80 Agency Funds

52 California Community College Budget Example - Total Funds General Fund List of Funds Budgeted Expenditures $ 179,399,512 Revolving Cash Fund 100,000 Restricted Reserve (5%) 8,035,225 Other Reserves 300,052 Total General Fund $ 187,834, Child Development Fund 5,112,110 General Obligation Bond Funds 148,098,416 Bond Interest and Redemption Funds 20,146,494 Capital Outlay Projects Fund 23,942,869 Self-Insurance Fund - Workers' Compensation 6,923,927 Self-Insurance Fund - Property and Liability 1,696,862 Retiree Benefits Fund (5,928,361) Student Financial Aid Fund 12,432,177 Diversified Trust Fund 1,913,643 Associated Students Fund 476,174 Bookstore Fund 12,994,864 Community Education Fund 636,146 Total All Funds $ 416,280,110

53 Program DSP&S EOP&S Matriculation General (usually 100)

54 Activity it Codes Instructional Administration & Support Examples

55 Sources of Revenues 8100 Federal Revenues 8600 State Revenues 8800 Local Revenues 8900 Other Financing i Sources

56 Expense Categories 1000 Academic Salaries 2000 Classified & Other Non-academic Salaries 3000 Employee Benefits These three areas are People costs

57 Expense Categories 4000 Supplies and Materials Consumable if it breaks - throw away 5000 Other Operating Expenses & Services Intangibles 6000 Capital Outlay Long Term if it breaks - fix it 7000 Other Outlay

58 Chart of Accounts Components

59 Unrestricted Funds and Categorical Programs

60 Unrestricted t Funds Resources available for general District i t purposes to be used to fulfill the institution s educational mission i

61 Unrestricted Revenue State General Apportionments State Lottery Proceeds (Except Proposition 20 money which must be used for instructional materials) Property Taxes Student Enrollment Fees Non-Resident Tuition Apprenticeship Interest t Income Other Income (example Transcript Fees)

62 Restricted Funds The use of resources received are restricted by laws, regulations, donors, or other outside agencies for the operation and support of specific educational programs Restriction defined by State or Feds not local Boards Accounted for separately from the general operating fund May be subject to audit by the agency granting the funds

63 Common State Categorical & Restricted Programs CalWorks CARE Child Development College Work Study Disabled Students Programs & Services (DSPS) Economic Development Extended Opportunity Programs & Services (EOPS) Faculty & Staff Diversity Instructional Equipment Student Fees Restricted (Parking and Health) Vocational & Technical Education Act (VTEA)

64 Capital Construction ti Programs

65 Capital Construction ti Programs Very important especially since Prop. 39 Critical to have a facilities master plan that is driven by a quantitative academic master plan Basic steps in the facility planning process Valid academic and facilities master plans Initial Project Proposal Final Project Proposal Important concept: Capacity Load ratio

66 Capital Construction Program Funding Options Local Funding/Borrowing General Fund Other District Funds Lease/Revenue Paid of from identified specific revenue source Lease/Purchase COPs (Certificates of Participation) Paid off from General Fund

67 Capital Construction Program Funding Options State Educational Facilities Construction Bonds IPP/FPP Process General Obligation Bonds Prop. 39 (55%, allows equipment) Prop. 46 (66.67%, no equipment) Scheduled Maintenance & Special Repairs (SMSR) Scheduled Maintenance vs. Regular Maintenance Hazardous Substances Access Compliance

68 Capital Construction Programs Important Resource CCCCO (California Community Colleges Chancellor s Office) Facilities Planning Manual ns/financefacilities/facilitiesplanningunit/ ReferenceMaterials/FacilitiesPlanningMan ual/tabid/842/default.aspx

69 Current Issues

70 Current Issues Prolonged Recession and State Budget mess Massive reduction in Prop 98 funding Apportionment Deferrals Cash Flow 50% Law Counselors and Librarians Technology support Full Time Faculty Obligation FTFO FON Deferral vs. Waiver

71 Current Issues Workload Measures Reduction Growth funding No COLA GASB 45 Post Retiree Employee Benefits (Government Accounting Standards Board) To fund or not to fund Accreditation Many issues!!!!

72 Workload Measures Workload Measures = FTES Full-time equivalency students Reduction of Workload Measures due to base apportionment deficits Proportional to base funding reductions Reduced d funding = Reduced d funded d FTES Credit vs. CDCP vs. non-credit

73 Current Fiscal Situationti No time to go into details Sure bet - It ain t over revenues continuing to decline expect mid year changes ccleague.org/impact Budget workshops

74 Budget Workshop - SoCal Date: August 18, :30 a.m. - 2:30 p.m. North Orange Community College District Board Room 1830 Romneya Drive Anaheim, CA Register at org

75 Budget Workshop NoCal Date: August 21, :30 a.m. - 2:30 p.m. American River Community College Theater Arts Building 4700 College Oak Drive Sacramento, CA Register at

76 Additional Resources and Information

77 Sources of Additional Information Your binder California Community Colleges Chancellor s Office Community College League of California Legislative Analyst s Office

78 Other Great Links Fiscal Trend Analysis Facilities/FiscalServices/FiscalAccountability/DistrictFi scaltrentanalysis /tabid/969/default.aspx Apportionments Facilities/FiscalServices/AllocationsSection/Apportion mentreports/tabid/329/default.aspx Fiscal Data Abstract s/fda/fdat_ _all_info_revised.pdf

79 Additional Great Resource Introduction to Fiscal Responsibilities: A Resource for Community College Trustees Available from the Community College League of California

80 Sources of Additional Information California Department of Finance California Legislative Counsel g Association of Chief Business Officials (ACBO)

81 Sources of Additional Information California Department of Finance California Legislative Counsel Association of Chief Business Officials (ACBO) lots of links from web site org/

82 Questions and Discussion