October 28, 2010
January 21, 2010
October 28, 2010
October 28, 2010
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• Governmental Funds
– General Fund
– Special Revenue
– Debt Service
– Capital Renovation
• Enterprise Funds
– Food Service
– Other Enterprise Funds
• Internal Service Funds
– Health Insurance
– Worker’s Compensation
– Other Internal Service Funds
$1,533,283,498
$ 341,016,845
$ 208,616,298
$ 224,000,000
$ 111,834,796
$ 12,068,784
$ 139,744,988
$ 15,822,490
$ 20,398,169
• Additionally the district is responsible for several fiduciary funds
October 28, 2010
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October 28, 2010
HISD Administrative
Regulations
HISD Board Policy
TEA Regulations
Texas State Statutes
Federal Regulations
Governmental Accounting Standards Board (GASB)
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October 28, 2010
• Safeguard assets
• Ensure validity of financial transactions and financial reporting
• Promote adherence to policies and procedures
• Improve effectiveness and efficiencies of operations
• Ensure employee turnover will not disrupt operations
4

October 28, 2010
By the Governing Body:
– Create strong internal audit function
– Implement rigorous external audit requirement
– Require rotation of external auditors
– Require a board audit committee
– Adopt control related policies
By the Central Administration:
–
Develop and implement control related procedures
– Implement risk assessment policy
– Develop & implement formal accounting and reporting procedures
Source: Governmental Finance Officer’s Association
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Board of Education Policies-Financial Operations
October 28, 2010
CAA
– FINANCIAL ETHICS
–
Fraud and Financial Impropriety
–
Financial Controls and Oversight
–
Fraud Prevention
–
E-Rate Compliance Policy
–
Code of Silence
CDA – CASH MANAGEMENT AND INVESTMENT POLICY
– Annual Review and Resolution
– Annual Compliance Audit
– Investment Officer Training
– Quarterly Reporting
– External Investment Committee
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Board of Education Policies-Financial Operations
October 28, 2010
CE –ANNUAL OPERATING BUDGET
– Budget Adoption
– School Policy Carryover
– Mid-Year Reporting
CFA – FINANCIAL REPORTS
– Annual Financial Report
– Single Audit Report
– Schools FIRST Management Report
CA – DEBT MANAGEMENT
– Debt Management Policy
–
Financial Management Policy-Reserve for Operations
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Chief Financial Officer
October 28, 2010
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October 28, 2010
• Advise the Board of Education, Superintendent of Schools and senior staff on financial matters
• Continuous improvement in financial reporting to ensure transparency of financial information to the public
• Oversee investment practices for over $1 Billion of revenues
•
Oversee the development of the annual operating budget for all funds of the district
• Develop debt structure for issuance of bonds; seek opportunities to refund outstanding debt and maintenance of bond ratings
• Provide strategic direction for improvement of financial procedures for all schools and operating divisions
9

Finance Division – Awards & Ratings
Distinguished Budget Presentation Award 18 years
Certificate of Achievement for Excellence in Financial
Reporting (CAFR Program) 36 years
Meritorious Budget Award 11 years
October 28, 2010
Certificate of Excellence (COE) in Financial Reporting 22 years
Superior Achievement Rating
Texas Comptroller Leadership Circle
The National Institute of Governmental Purchasing
8 years
1 year
3 years
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October 28, 2010
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October 28, 2010
Controller’s Office - Facts
ACCOUNTS PAYABLE
• Process payments for more than 9,000 active vendors.
• Process over 8,000 prepaid travel requests and employee reimbursements.
• Print approximately 300 checks daily.
BOND FUND ACCOUNTING
• Manage financial accounting for all capital project funds, including the current 2007
Facilities Capital Program totaling $1.045
billion.
• Ensure that project funding is balanced, new contracts are appropriated and encumbered, and funds are expended consistent with established budgets.
• Process payments to contractors, architects, engineers, and other constructionrelated vendors.
• Provide information to bonding companies, contractors, subcontractors, taxpayers, and government agencies.
ENTERPRISE FUND ACCOUNTING
• Manage the accounting for a $91.7 million
Food Service operation for the breakfast and lunch programs, including monthly profit-and-loss accounting by school.
• Manage the accounting for a $10.6 million
Medicaid Dept. of special reimbursement programs.
• Manage accounting for revenues of $12.8
million generated by the Business
Development operations of the District’s
Marketing Office .
GENERAL FUND ACCOUNTING
• The General Fund is the District’s principal fund, accounting for the majority of operating expenditures and related revenues.
• Consulting/Contract Clearinghouse.
• Expenditure transfer requests.
• School and third-party receivables
(tuition, grants, insurance settlements, etc.)
• Monthly balancing and reconciliation of general fund and property taxes.
INTERNAL SERVICE FUND ACCOUNTING
•
Manage accounting for the printing and distribution activities of the Print Shop’s four locations.
• Manage accounts for the Health Insurance plan administered by the District.
• Manage account for the District’s Workers’
Compensation program.
• Manage accounting for fee-for-service operations, scholarship funds, and special activity accounts.
• Process Student Activity Funds transactions and reconcile bank accounts for secondary schools.
PAYROLL
• Process b i-weekly payroll for 30,000 employees.
• Process deduction billings for more than
100 different payroll vendors.
• Process direct deposits and garnishments.
• Process retirement paperwork and leave payouts for retirees.
PROPERTY MANAGEMENT
• Manage accounting for $3.8 billion in fixed assets, including land, buildings, construction in progress, equipment, vehicles, and furniture.
• Review and process monthly acquisitions, retirements, transfers, and depreciation entries.
• Coordinate, review, and process physical inventories of fixed assets for schools and departments .
SPECIAL REVENUE ACCOUNTING
•
Manage accounting for more than $300 million designated-purpose grants received from federal, state, and local agencies totaling in excess of $300 million annually for the purpose of accomplishing specified educational tasks.
• File over 100 monthly and quarterly financial reports to grantor agencies.
• Monitor fund balances and revenue collections.
• Audit and process external billings submitted for reimbursement.
TREASURY
• Manage District debt service comprising over
$2.4 billion in debt principal outstanding.
• Manage Investment of District funds with an average balance of $1.5 billion.
• Manage cash and liquidity averaging over $1.1 billion in transactions per month.
• Receipt and deposit cash and checks totaling $45 million annually.
• Report payroll and sales tax.
• Manage primary banking relationships.
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Controller’s Office
October 28, 2010
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October 28, 2010
Controller’s Office – Budget & Funding Sources
• Current Annual Budget - $5.2 M
– Personnel & Benefits - $4.97 M
– Operational Cost - $.23 M
• Funding Sources
– General Fund - $2.95 M
– Special Revenue - $.71
– Capital Projects - $.66
– Food Service & Internal Service Funds - $.88 M
$65 526
$12 700
$152 266
Current Budget
$13 697
6100 Payroll & Benefits
$4 970 497
6200 Contract Services
6300 Supplies
6400 Other Operational
6600 Capital Outlay
$13 476
$27 919
$106 706
$105 177
$2 948 894
Funding Sources
$710 976
$655 686
$645 852
CP1
FD1
GF1
IS1
IS2
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Controller’s Office – Key Accomplishments
•
Compliance Controls
– Fully implemented Phase I of the Governance, Risk Management &
Compliance (GRC) software platform.
•
Treasury Controls
– Implemented twice daily current day review of account activity
–
Implemented machine registration at Chase
– Implemented Post No Check service on non check issuance accounts
– Implemented “Virtual PC” system
–
Developed of a Treasury Procedures Manual
October 28, 2010
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Controller’s Office – Key Accomplishments – Cont.
October 28, 2010
•
Met quarterly reporting requirements for ARRA Section 1512 Reporting
• Implemented tracking of personal discretionary leave, assuring employees use state and local personal leave in the manner as mandated in Board Policy –
DEC (LOCAL).
• 98% of Staff participated in 8 hours or more of job related professional training
–
Seminars
–
Webinars
– Online Training
•
Participated in pilot of 2009-2010 ePerformance appraisals
• Reduced school receivables by 26% when compared to FY2009.
•
Developed Procedures Manual for School and Department Closures.
• Successfully conducted four (4) In-Service – Activity Funds Training for
Schools financial staff
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Controller’s Office – Key Accomplishments – Cont.
October 28, 2010
•
Launched Pilot Project
– to streamline the centralized activity funds operation overall deposit recap process
• Developed and implemented a business process for the four replacement construction projects funded by the Public Facility Corporation.
• Developed a key word index consultant and contract payment database, linking key words to the corresponding consultant agreement or contract.
•
Implemented scanning of financial documents
• Facilitated the reduction of the projected $13M loss to $5.9M.
─
Monitor food cost reduction through inventory control.
─ Help implement the “flex hours” program introduced by Aramark
─ Developed and implemented an electronic budget template Food
Service to improve the timeliness, efficiency, and effectiveness of budget to actual variance reporting, aligned with the district’s budget office allocation methodologies
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Controller’s Office – Efficiency & Effectiveness Projects
October 28, 2010
•
Develop and implement a new capital improvement structure for establishing budgets, recording commitments, and reporting financial information to upper management, oversight committees, and outside organizations.
• Implement the recommended organizational changes by the Council of Greater
City Schools for the Finance component in the Construction Services
Department.
• Host the following activity fund in-service:
Elementary Schools
Secondary Schools
New Principal
• Implementing new work flow process:
• School Pilot Program - Phase II – cash deposits and internal transfer of funds.
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October 28, 2010
Controller’s Office – Efficiency & Effectiveness Projects – Cont.
• Research alternative business process to further enhance accounts payable automation.
• Develop a tool to consolidate grant/financial status data into a report for internal and external customers
• Perform fixed asset spot check audits at a least 25% of all district locations.
• Implement the new production planning module to affect a proper planning and utilization of inventory.
• Develop and implement a cafeteria cash audit procedure.
• Implement a web based solution to accepting payments (credit and debit cards) for various District initiatives.
• Initiate review of District payment methodologies for increased efficiency and reduction of costs through electronic payment systems (i.e. ACH, wires, payment by check).
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October 28, 2010
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October 28, 2010
Budget & Financial Planning - Facts
SCHOOL BASED BUDGETING

Develop, implement and monitor annual budgets, totaling over $800 million.

Provide budgetary support to for over
300 schools and 24 School
Improvement Officers.

Process over 5,000 position management actions annually to facilitate, control and monitor staffing changes at the campus level.

Conduct six bi-annual district wide workshops related budget coding, position management, and general information topics to principals, business managers and financial support staff.

Conduct over 200 school visits a year to assist, consult, and trouble-shoot fiscal, staffing, and operational deficiencies.

Conduct annual Comparability
Compliance test, calculate Excess
Costs and other functional categories to ensure fiscal compliance.

Prepare and present for adoption by the Board of Trustees the Resource
Allocation Handbook used for campus budget development.

Prepare campus model budgets when new programs are being considered for cost impact and other management reports requested for programs evaluation.
BUDGET TRAINING

Prepare and Present Budget Training: o
Budget Development o
Managing Your Budget

Campus Level

Departmental

Develop alternate delivery methods of training: o
Online modules o
Webinars o
Video presentation

Work with all Finance Divisions on development of training opportunities
SPECIAL REVENUE BUDGETING

Develop, implement and monitor annual budgets, totaling in excess of $300 million annually for more than 300 specific purpose grants received from federal, state and local agencies.

Monitor expenditures for compliance to grant requirements and timelines.

Process position management actions and validate compliance with approved grant positions.

Prepare management reports to facilitate timely expenditure of grant funds.

Assist with all federal and state audits of grant budgets and expenditures.
BUDGET OPERATIONS

Develop, implement and monitor annual budgets, totaling over $2.3 billion.

Provide budgetary support to for over
140 Departments, 7 Internal Service
Funds, 3 Enterprise Funds and all district wide programs.

Process all district position management actions in accordance with district policy and procedure and budgetary constraints

Monitor, validate and process corrections to district payroll for submission to the SAP finance system.

Submission of required PEIMS reports and other Texas Education
Agency report for compliance with state law.

Prepare annual state and local revenue projections and prepare
Truth-in-Taxation calculations and notices required by state law.

Prepare annual budget book, budgetary updates, and financial surveys.

Maintain SAP and PeopleSoft account code master data.

Special projects as requested by the internal and external sources.
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Budget & Financial Planning
October 28, 2010
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Budget & Financial Planning – Budget & Funding Sources
October 28, 2010
• Current Annual Budget - $2.2 M
– Personnel & Benefits - $2.12 M
– Operational Cost - $.08 M
• Funding Sources
– General Fund - $1.8 M
– Special Revenue - $.39
– Food Service & Internal Service Funds - $.01 M
$29 944
$19 862
Current Budget
$30 842
$2 122 207
6100 Personnel &
Benefits
6200 Contract
Services
6300 Supplies
6400 Other
Operating
$27 948
$398 518
Funding Sources
$25 475
$1 750 914
FD1
GF1
IS3
SR1
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October 28, 2010
Budget & Financial Planning – Key Accomplishments
• Adoption of 2010-2011 budget on time
• Full implementation of ARRA Stimulus fund budgets
• Participated in performance management scorecard & eperformance pilot programs
• Successful transition of budget from 5 regional offices to 3 school level departments
• Developed additional training module for campuses: “How to
Manage Your Budget”
• Successful recapture of TIRZ state revenue for 2006-2007 thru
2008-2009
• Identification of maintenance of effort issues and potential savings
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October 28, 2010
Budget & Financial Planning – Efficiency & Effectiveness Projects
• Online Position Management Process
• Redesign of Authorized Position Report
– Improved vacancy monitoring
– Improved timeliness of information
• Expanded Training Opportunities
– Online Modules
– Webinars
– Video
• Online Federal Time & Effort Tracking Process
• Expansion of Adopted Budget Book – Campus Data
25

October 28, 2010
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October 28, 2010
PROCUREMENT
• Processed 127,700 purchase orders (PO’s)
• Average lead-time to process a purchase requisition:
5 business days
• Conducted 155 Annual Bid projects
• Facilitated 130 Cross Functional Procurement
Teams
• 36 Spend Categories with 375 Product
Classifications
• Leveraged Acquisitions = Cost Savings
• Created district wide newsletter - “BuyLines” as method of announcing bid vendors
PROCARD
• Total number of PROCARDS in use: 1,374
• Total number of PROCARD transactions:
118,281
• Total dollars spent on PROCARDS: $20,107,217
• Conducted 6 training sessions a year
• Annual review of merchant code categories
• Daily audits of previous day transactions
• Monthly review of PROCARD transaction receipts
• Publishes quarterly “ProCents” Newsletter highlighting cardholder policies
TRAVEL
• Total number of travel requisitions processed: 3,381
• Average lead-time to process a travel requisition: 5 business days
• Provide on-going Travel training
• Negotiated discounts with airlines and rental cars
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October 28, 2010
Procurement Services
Senior Buyer
7 FTE
Business Operations
Team Leader
1 FTE
Customer Service
Representative
1 FTE
General Clerk III
1 FTE
Procurement Services
General Manager
Stephen M. Pottinger
SRM Catalog Content
Administrator
1 FTE
SRM Designer
1 FTE
Houston Independent School District
ORGANIZATION, OCTOBER 2010
General Manager
Procurement Services
Procurement
Manager
7 FTE
PROCARD
Representative
4 FTE
Travel Service
Representative
2 FTE
General Clerk II
Buyer
9 FTE
Position funded through the
Facilities Bond Program Capital
Projects
Food Services Funds (FD1)
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October 28, 2010
Procurement – Budget & Funding Sources
• Current Annual Budget - $2.6 M
– Personnel & Benefits - $2.4 M
– Operational Cost - $.2 M
• Funding Sources
– General Fund - $2.28 M
– Capital Projects - $.08
– Food Service - $.24 M
Current Budget
Funding Sources
$84 195
$255 740
$44 009
$129 804
$3 200
$43 000
$2,401,597
6100 Payroll &
Benefits
6200 Contract
Services
6300 Supplies
6400 Other
Operational
6600 Capital
Outlay
$2,281,674
CP1
FD1
GF1
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October 28, 2010
Procurement Services – Key Accomplishments
• Re-engineered spend categories (material groups)
• Documented and flow-charted major business processes
• Customer service initiative
– Developed “How To Do Business With Houston ISD” brochure
– Developed desk reference manual for campus administration
• Staff Training – National Institute Governmental
Purchasing webinars
• Developed supplier scorecard
• Implemented annual proposal calendar
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October 28, 2010
Procurement Services – Efficiency & Effectiveness Projects
• Launch supplier relationship management (SRM) catalog shopping for schools
• Obtain professional certification all managers
• Host supplier fairs for each commodity team
• Conduct customer satisfaction surveys
• Focused MWBE outreach

Procurement Services – Supplier ScoreCards
October 28, 2010
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Procurement Services – Annual Proposal Calendar
October 28, 2010
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Finance & Procurement Key Performance Indicators
October 28, 2010
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October 28, 2010
Key Performance Indicators
•
•
•
•
•
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October 28, 2010
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