TAZEWELL COUNTY PUBLIC SCHOOLS Budget Overview

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Hilda Townsend
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1 TAZEWELL COUNTY PUBLIC SCHOOLS Budget Overview

2 Budget Management The budget is a policy document and it sets forth both general and specific plans that must be executed or formally changed. Budget controls within the finance department have been established to govern the ways of which funds are expended within the approved policy framework. The budget management process and document is an essential tool in ensuring that expenditures do not exceed appropriations.

3 Virginia code states that Each school board shall manage and control the funds made available to the school boards for public schools and may incur costs and expenses. In other words the local government appropriates funds for the schools but the School Board determines how the funds are to be spend. Virginia code states that No school board shall expend or contract to expend in any fiscal year any sum of money in excess of the funds available for school purposes for that fiscal year. The school superintendent must be a business manager AND an instructional leader. The finance supervisor should have a strong financial and accounting background. There should always be segregation of duties in the finance department so no one person has complete control.

4 There are three phases to financial management: budget development. budget implementation, & budget evaluation Virginia statutory law prescribes that it shall be the duty of the superintendent to prepare an estimate of the amount of dollars deemed to be needed during the next fiscal year for the support of schools. The superintendent also decides on compensation and must have a completed budget approved by the school board by March 31 st of each year. The superintendent meets with department heads and principals to determine individual needs to consider when compiling the budget. Some items are added to the budget and some get put into a capital plan. The General Assembly has the greatest impact on what happens to our individual budgets because they set the VRS rates and determine the largest revenue source for our budgets. The school board can give directions to the superintendent on their priorities. Once a draft budget is developed Virginia code requires at least one formally advertised public hearing on the budget. This is usually done at a school board meeting. Planned public forums in each district gives the community the knowledge and insight on the school board s final budget. Once these forums are complete the school board meets for the final revisions and adoption of the budget.

5 It should be noted that the County can appropriate funds based on a lump sum funding, either monthly, quarterly or in one lump sum. The superintendent is required to prepare a needs-based budget. It is the fiduciary duty of the School Board to not expend funds in excess of those appropriated. The budget development process usually begins in the fall of each year when the budget office is busy developing the budget guidelines and preparing budget prep materials to distribute to faculty and staff. In October, department requests and justifications are being prepared. In December there are meetings with each of the department head to review their requests and to categorize them. Categories would be instruction, facilities, capital improvements and personnel. Project school enrollments for the new year, based in part on the September 30 th actual enrollments and past history. The enrollment will not only drive the staffing requests it will also be used in calculating our state funding.

6 Establish Budget Assumptions Determine enrollment projections for the next fiscal year by grade and by school Compare enrollment projections with prior year actual enrollment figures Prepare revenue estimates using State funding guidelines, Federal and miscellaneous sources Estimate of local contribution Prepare a staffing model position control Determine the number of current positions Determine the number of new (growth) positions Determine the number of new positions due to changes in the staffing guidelines or new programs Exclude any eliminated programs Include previously funded positions based on grant appropriations Make sure that the budget is BALANCED! Maintain all revisions in detail The bottom line must be the sum total of all budget details

7 Determine Parameters Define the Scope of the Budget Regular Operating (local and state dollars) Self-sustaining (federal & state grants) Cafeteria (Food Service Program, funded by state, federal & local) Debt Service (local dollars) Textbooks (local and state dollars) Capital Improvement Plan (usually a separate document spread over a 5 year period) Define the order of importance Define discretionary expenses Define contractual expenses Establish a procedure for managing change Build in flexibility (remember that the budget is just a plan, established within certain assumptions. If the assumptions change the budget must be adjusted.

8 TWO SIDES TO EVERY BUDGET REVENUE State Funds (SOQ accounts, Incentive programs, categorical programs.) Federal Funds (reimbursement Grants) Local Funds (local government and donations and related income) EXPENDITURES Payroll & Benefits What is paid out.. Driven by purchase orders and direct payments.

9 State Revenue SOQ Accounts largest amount, received in regular payments, may require a local match Basic Aid, Special Ed, Gifted, Vocational, VRS, etc. Incentive Programs require commitment to certain programs, usually require local match Preschool, Early Reading, Technology, etc. Categorical programs funding for specific programs Adult Ed, Homebound, School Food Reimbursement grants spend first, then file for reimbursement Title I, Title VI-B IDEA, Preschool Handicapped, etc.

10 The Composite Index The composite index is the measure of the locality s ability to pay for public education. Factors that determine the composite index are: True value of real estate Adjusted gross income Taxable retail sales Average daily membership (ADM) Population of the locality State Sales Tax Revenue Revenues generated by a 1% sales and use tax apportioned to school divisions based upon the number of children in each county according to the most recent census of schoolage population.

11 The Governor released his proposed budget to each school division in the beginning of December. It has been released to the General Assembly for the House and Senate to work their magic on those numbers and each one will develop their own budget. The final adoption from the State will usually be a combination of items from the Governor, House and Senate budgets. The DOE is required, within 15 days following the General Assembly adjournment, to submit to each school division individual estimates of funds derived from the use of the Basic School Aid Formula which is calculated using the composite index. Remember we are estimating revenues and expenditures and ensuring that the budget is in balance that expenditures do not exceed revenues for the year. The Virginia Attorney General is of the opinion that a school board lacks the authority to fund capital renovation costs for school property that it does not lease and which is fully owned and operated by the school board. We will, however, be developing a capital improvement plan that will include major expenditures on our facilities spread over a five year period and submit this to the Board for approval before sharing the information with the county supervisors.

12 Major classifications prescribed by the Board of Education are: Instruction Administration, Attendance and Health Pupil Transportation Operation and Maintenance School Food Services Facilities Debt Service Technology Instruction deals with activities dealing directly with interaction between teachers and students, such as: Compensation and fringe benefits Guidance services, homebound instruction and school social worker services Media services, curriculum development and inservice programs Salary and expenses of the principal, assistant principal and clerical staff Summer School Student Activities Gifted and Talented Education Special Education Administrative support of instructional activities

13 Administration, Attendance and Health are activities concerned with establishing and administering policy for Administration, attendance and health, such as: Salaries and fringe benefits for school board services and general administration of the entire local education agency The cost of services related to information, personnel, planning, fiscal operations, purchasing and data processing Cost of services related to attendance and health programs Pupil Transportation Services are activities concerned with conveying students to and fro school as provided by state and federal law which includes: Trips between home and school Trips to and from school activities Field trips Vehicle maintenance Operations and Maintenance activities are in keeping school facilities grounds, and equipment in effective working condition. This would include custodial services and security. Facilities include acquiring land and buildings and remodeling, constructing and improving sites.

14 Areas that we know will change Virginia Retirement System increase from 16.66% to 19.50% (this includes the employee s share) Health Care Premiums increase by 10% New Disability Plan for new employees at.37% Group Life Insurance Rate from 1.19% to 1.24% Retiree Health Care Credit from 1.11% to 1.18%

Kent C. Dickey Assistant Superintendent for Finance. July 22,

Rebenchmarking of the Direct Aid to Public Education Budget for the 2012 Biennium Presented to the Board of Education SOQ Committee July 22, 2009 Kent C. Dickey Assistant Superintendent for Finance July