SFO® Certification Program
Copyright 2015 ASBO International
ASBO International’s Mission
ASBO International’s mission is to lead the profession of school
business forward. Through our professional growth opportunities,
programs, and services, we promote the highest standards of school
business management practices. We provide a global network of
support that enhances our members’ ability to collaborate and lead with
a global perspective. We are dedicated to supporting school business
officials and providing the resources they need to effectively use
educational resources—ultimately ensuring every student has the
opportunity to receive a quality education.
SFO Commission Governance
ASBO International’s certification program is governed by the
Certification Commission, a semi-independent certifying body of the
Association of School Business Officials International.
In adherence to best practices for certifying bodies, Certification
Commission volunteers and certification staff are not involved in the
development of any preparatory program, and no preparatory program
is endorsed by the Certification Commission nor is a prerequisite to
earn the certification.
The Certification Commission and its staff are solely responsible for the
policies and administration of the certification program, including
application procedures and qualification requirements.
What is the Certified Administrator of School
Finance and Operations® (SFO®)?
Developed by school business management professionals and
supported by ASBO International, the Certified Administrator of School
Finance and Operations® (SFO®) defines the essential skills and
knowledge that every effective school business professional should
possess and demonstrates to employers that you have real-world,
practical expertise that can be readily applied to the current work
environment.
The SFO is an international certification, recognized in the United
States and Canada.
Why is the SFO certification valuable for
school business officials?
The SFO can increase your earning potential by showing you’ve reached
clearly defined career goals, which mobilizes you for future professional
advancement and ranks you among the top-qualified professionals in
your industry.
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Initiative, professionalism, dedication
Career advancement
Measure up to professional standards
Recognition
Instill confidence
Continued professional development
Why is the SFO certification valuable to
employers?
SFO certification tells employers which individuals have met high
standards in education, knowledge, and experience.
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Proven knowledge and skills
Capable of thinking critically
Seasoned in school business practices
Built public confidence
Maintains high standards and ethics
Certification vs. Certificate
Professional or personnel certification is a voluntary process by which individuals' preacquired knowledge, skills, or competencies are evaluated against predetermined standards.
The focus is on an assessment that is independent of a specific class, course, or other
education/training program. Participants who demonstrate that they meet the standards by
successfully completing the assessment process are granted the certification.
An assessment-based certificate program is a non-degree granting educational program
that:
(a) provides instruction and training to aid participants in acquiring specific knowledge, skills,
and/or competencies associated with intended learning outcomes.
(b) evaluates participants’ achievement of the intended learning outcomes.
(c) awards a certificate only to those participants who meet the performance, proficiency or
passing standard for the assessment(s).
A certificate of attendance or participation is not the same as an assessment-based
certificate.
A certificate of attendance/participation is provided to individuals (participants) who have
attended or participated in classes, courses, or other education/training programs or events but
did not have to demonstrate accomplishment of the intended learning outcomes.
Reference: Institute for Credentialing Excellence
Earning Your SFO
Gathering Information
•
ASBO International SFO Certification webpage: www.asbointl.org/certification
Gathering Information
• Read the SFO Candidate Handbook
Certification Requirements
Exam Part 1:
Accounting
•
No education requirements
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No experience requirements
Exam Part 2:
School Business Management
• Completed master’s degree + 2 years work
as an SBO
OR
• Completed bachelor’s degree + 3 years work
an SBO
OR
• Seasoned practitioner (7+ years employment as
based upon approval)
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70 multiple-choice questions, 120 minutes
• 100 multiple-choice questions, 150 minutes
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Computer-based exam in English only
• Computer-based exam in English only
Certification Fees
Application Process
•Create a profile: www.asbointl.org/sfoprofile
•Click on the “First Time User? ” link
Application Process
Application Process
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Fill out personal information and required fields. Make sure your name matches
the name that is found on your government-issued ID.
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You will not be allowed to enter the testing room if your full first, middle, and
last names do not match exactly to your government-issued ID.
Application Process
Application Process
Program Forms
• SFO Eligibility Application
• Exam Registration Forms
• Test Modification Forms
Scheduling & Taking the Exam
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Eligibility email
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Pearson VUE testing centers in the
U.S. & Canada
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Read the instructions in this email
carefully.
Check your junk/spam folder if you do
not receive the email within 24 hours
Find a testing center near you:
http://www.pearsonvue.com/pti/locate/
Directly schedule your exam(s) with
Pearson VUE
After the Exam
• Official certificate and lapel pin
• Recognition from your peers and employer
• Press release sent to superintendent, school board, and local press
• Use SFO® after your name
• SFO Public Registry at www.asbointl.org/sfosearch
Renewal & Recertification
• Don’t lose the certification you have worked so hard to earn!
Maintaining Your SFO Credentials
•Annual Renewal
To renew your certification, submit an annual renewal application, sign
the Certification Code of Conduct, and pay a renewal fee of $125.
• Recertification
Your certification is valid for three years, at which time you must apply
for recertification. There are no fees associated with recertification.
The recertification requirements are to obtain and maintain
documentation of 45 contact hours over the three-year recertification
cycle (one contact hour equals 50 minutes of content.)
Resources
• SFO Certification Webpage
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www.asbointl.org/certification
SFO Candidate Handbook
• SFO Credential Management System
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www.asbointl.org/sfoprofile
• SFO Study Resources
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www.asbointl.org/sforesources
Authoritative References List
Guide to Studying for the Examinations
Practice questions for Exam Part 1: Accounting
Practice questions for Exam Part 2: School Business Management
• SFO Study groups
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Through an affiliate
ASBO International Annual Meeting & Expo
Spread the Word
• Attend the ASBO International Annual Meeting & Expo
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Special SFO events for certificants
• Use social media
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Join the conversation with your peers on LinkedIn
Share your experience, knowledge, and advice
Ask questions
• Volunteer
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Influence, motivate, inspire
Contact Certification
Call us! 866.682.2729 (toll free for U.S.)
Email us! certification@asbointl.org
Visit us! www.asbointl.org/certification
Skills Refresher for
ASBO International’s
SFO® Certification Exam
Copyright 2015 ASBO International
26
Disclaimer
ASBO International’s certification program is governed by the
Certification Commission, a semi-independent certifying body of the
Association of School Business Officials International.
In adherence to best practices for certifying bodies, Certification
Commission volunteers and certification staff are not involved in
the development of any preparatory program, and no preparatory
program is endorsed by the Certification Commission nor is a
prerequisite to earn the certification.
The Certification Commission and its staff are solely responsible for
the policies and administration of the certification program, including
application procedures and qualification requirements.
SFO® Exam Content
Part 1
• Management of Accounting Systems
• Management of Accounting Functions
Part 2
• Financial Planning and Analysis
• Budgeting and Reporting Activities
• Risk Management Activities
• Management of School Facilities
• Management of Information Systems
• Management of Human Resource Functions
• Management of Ancillary Services
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Management of Accounting Systems
Marvin Dereef, Jr., MAFM, SFO
Deputy Chief Financial Officer, Fulton County Schools, Atlanta, GA
What is an Accounting System?
Def. - A series of steps, either manual or automated, that records the
transactions of a business, and provides the information for financial
reports
Expense
Debit
Credit
Revenue
Debit
Credit
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Typical Accounting Flow
•Journalize the accounting transaction in
special or general journal
•Post the transaction from the journal to a
subsidiary ledger
•Post the total from the journal to the General
Ledger (usually journals close into ledger at
month end)
•Summarize the business events by preparing
a trial balance
Automated Systems
3 steps:
• Record Transaction
• Update Master Data
• Generate reports (and support queries)
Password control is essential
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Financial Definitions
•Trial Balance – list of all the general ledger
accounts and their balances. The purpose of a
trial balance is to prove that the value of all the
debit balances equal the total of all the credit
balances.
•Balance Sheet – reports assets, liabilities, and
equity
•Income Statement – reports revenues and
expenses during an accounting period
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Basis of Accounting
•Cash Basis – revenues are recorded when cash is
received, and expenses are recorded when cash is
paid
•Accrual Basis– revenues are recognized when
earned and expenses are recognized when a liability
is incurred
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Due to/Due from
•Balance monthly
•Examples:
•Internal services funds
•Field trip costs
•Other interfund transfers
•State aid “settle up”
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Online Communications Technology
Communication networks range from those
designed to link a few computers, to the
internet which links most of the world’s
computers together
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Online Communications Technology
LAN (Local-area network): links several different local user
machines with printers, databases, and shared devices
WAN (Wide-area network): links distributed users and local
networks into an integrated communications network
Web browsers: software designed to allow users to easily
view various documents and data sources available on the
Internet
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Online Communications Technology
Intranet: mini internal equivalent to the Internet,
links an organization’s internal documents and
databases that are accessible via Web browsers
or internally developed software
Extranet: expanding access to a company’s
intranet to external, trusted partners
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Documentation – Internal Controls
•Sarbanes-Oxley Act of 2002 requires that organizations
document internal controls over their financial reporting
processes
•This documentation helps the organization know the flow
of transactions through the accounting system, helps
identify which areas have implemented internal controls,
and can identify areas of control gaps that need to be
addressed
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Documentation
•Written procedures
•Flowcharts:
Data flow diagrams, which portray business
process activities , storage of data, and flows of
data
Systems flowcharts present a comprehensive
picture of the management operations, information
systems, and process controls present in the
business processes
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Fraud
Three factors are generally necessary for fraud
to occur:
1. Pressure (motivation)
2. Opportunity
3. Rationalization
Often referred to as the “fraud triangle”
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Fraud
•Understand what can happen –common fraud
schemes
•Identify red flags to look for
•Test for the red- flag type activities
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Fraud Prevention
•Especially in periods of tight money, it is important to
maintain absolute integrity
•Develop and promote a district-wide culture of honesty
(tone at the top)
•Dual controls-minimum of two people involved in all
aspects of monetary responsibilities
•Sign offs and cross checks
•Secure passwords
•Fraud reporting process in place-internal employee,
external customer tips, fraud hot line, etc.
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Fraud Prevention
•External audit not designed to disclose
•Internal audit function
•Metrics to indicate anomalies
•Exception reports
•Override authority/ sharing passwords
•Multiple employees with same deposit account
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Q & A Time!
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Quiz Time!
What is an important consideration when developing a data
recovery backup plan?
A. The backup information will be securely stored on a separate
server in the same location with the capability to run the software
B. The backup information will be securely stored in an offsite
location with the capability to run the software at an alternate
location
C. The backup information will be securely stored and accessible
only to individuals who have the technical knowledge to run the
software
D. The backup information will be securely stored and accessible to
a third-party vendor who has the technical knowledge to run the
software
Answer
What is an important consideration when developing a data
recovery backup plan?
A. The backup information will be securely stored on a separate
server in the same location with the capability to run the software
B. The backup information will be securely stored in an offsite
location with the capability to run the software at an alternate
location
C. The backup information will be securely stored and accessible
only to individuals who have the technical knowledge to run the
software
D. The backup information will be securely stored and accessible to
a third-party vendor who has the technical knowledge to run the
software
Quiz Time!
What information does the Management's Discussion and
Analysis (MD&A) provide?
A. A statement that compares current-year revenues received with
expenditures for the same time period on a fund-by-fund basis
B. A management report including all financial transactions on an
accrual basis accounting
C. A narrative introduction and overview to the annual financial
statements prepared by school district personnel
D. An opinion of the auditor as to the viability of the school district
Answer
What information does the Management's Discussion and
Analysis (MD&A) provide?
A. A statement that compares current-year revenues received with
expenditures for the same time period on a fund-by-fund basis
B. A management report including all financial transactions on an
accrual basis accounting
C. A narrative introduction and overview to the annual financial
statements prepared by school district personnel
D. An opinion of the auditor as to the viability of the school district
Quiz Time!
In an organization with no central purchasing function, who
should be responsible for general ledger coding of purchase
requisitions?
A. The individual who is responsible for paying the invoice
B. The individual who is responsible for receiving the merchandise
C. The individual responsible for managing the specific budget
being accessed
D. The individual consuming the merchandise
Answer
In an organization with no central purchasing function, who
should be responsible for general ledger coding of purchase
requisitions?
A. The individual who is responsible for paying the invoice
B. The individual who is responsible for receiving the merchandise
C. The individual responsible for managing the specific
budget being accessed
D. The individual consuming the merchandise
Quiz Time!
What accounts appear on a balance sheet?
A. Income, assets, and liabilities
B. Assets, liabilities, and equity
C. Income, expenses, and equity
D. Assets, expenses, and equity
Answer
What accounts appear on a balance sheet?
A. Income, assets, and liabilities
B. Assets, liabilities, and equity
C. Income, expenses, and equity
D. Assets, expenses, and equity
53
Management of Accounting Functions
Brenda R. Burkett, CPA, SFO
ASBO International Vice President 2015, President 2016
Chief Financial Officer, Norman Public Schools, Norman, OK
Manage Payroll Functions
•The greatest portion of the price of education is
concentrated in the form of personnel
•Education is labor intensive
•Personnel costs make up 80-90% of most school
budgets
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Personnel Costs
•Personnel costs are the single most expensive (and
most important) item in school budgets
•After estimating enrollment and envisioning programs,
costing out salaries is the next most important task in
successfully balancing revenues and expenditures
•A demographer may be needed to assist with studying
the population and student growth of your district
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Determining Staffing Needs
•Enrollment drives staffing
•Ability to properly determine staffing needs is a
function of organizing and using information about
the district and its current and prospective staff
•Projections indicating a need for new staff require
budget input
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Determining Staffing Needs
•Hiring decisions must be coordinated with the
budget office, which must find money for salaries
•Must determine if budget constraints will allow for
additional staff to be hired
•If so, consider whether the district should hire
beginning teachers or whether it can afford more
experienced staff
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Data Input
•As the hiring decisions are made, and the staff
member’s payroll information is processed, it
is critical that data be correctly entered into the
payroll system
•There are many items pertaining to
compensation that must be accurately keyed
into the system, for a person’s pay and
benefits to be correct
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Compensation
•Employee compensation includes negotiated
benefits such as teacher’s retirement, defined
contribution plans and various kinds of
insurance
•Compensation also includes employer costs
for workers’ compensation coverage,
unemployment insurance, and social security
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Pay Tables And Deduction Codes
•One of the most critical functions of the payroll
office is to ensure that pay tables and deduction
codes are set up and the percentages entered
correctly into the payroll software
•It doesn’t matter if you’ve entered the staff
person’s correct pay step into the computer.
• If the pay step amount is not correct in the
computer, underpays or overpays will occur.
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Benefits/Other Compensation
•Leave balances available to employees are
handled either by regular accruals, or by days
given on an annual basis or some other
benchmark in the employment process
•A system must be in place for all leave requests
so proper reduction of leave balances occurs, or
pay docks are processed, if no leave is available
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Checks and Balances
•Payroll oversight entails making sure that the
amounts paid are correct, and that the benefit
calculations are accurately figured
•Deduction registers should be scrutinized for
reasonableness
•Random sampling should be performed to
check % calculations
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Salary Payment Options
•There are many different categories of employees
that work in a school system, and often their start
dates and contract days vary
•Many districts require 10 month employees
receive their annualized pay over 12 months, to
handle monthly insurance premiums or annuity
deductions that continue on a year-round basis
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Salary Payment Options
•Summer checks run in June (July and August
checks that are for salaries to be charged in
current fiscal year) will have taxes, retirement
payments and other deductions withheld
•Payment of these deductions require close
supervision to ensure paid in the right month
and paid by certain deadlines
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Manage Accounts Receivable
•The purpose of Accounts Receivable is to track
revenues that are not yet received by the District
•Procedures should be set in place to accumulate,
categorize, report and control revenues due the
district
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Manage Accounts Receivable
•Procedures and practices should remain the
same across time and reports.
•If differences occur, they should be due to
substantive differences in the events and
conditions reported rather than because of
arbitrary accruals
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Manage Accounts Receivable
•The Accounts Receivable function can provide
a method for accruing revenues earned for a
certain period, for consistency and
comparative analysis to that same period the
year before.
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Manage Purchasing Process
•Accountability for public money is backbone of
purchasing
•Procedures must be in place that focus on getting
the best bang for the buck with taxpayer funds
•As long as procedures are outlined and followed,
then substantiation for purchasing decisions will
be in place
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How Districts Procure Goods
and Services
•The District obtains quotes, at the appropriate dollar
threshold, on items to be purchased and then creates
purchase orders to award the contracts based on Board of
Education approval
•Requisition system-used to acquire goods/services by
purchase order and verify budget authority
•Purchase order – legal authority to spend
•Contracts - to delineate specific terms
•Districts should purchase from responsible business
entities.
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Purchasing Process
Bidding
- Public notice normally 10 to 20 days before
- All bids must be sealed
- All bids must be opened during a public bid opening where the
contents are announced
- Bids should be awarded to the lowest responsible bidder who
conforms in all material aspects to the requirements and
criteria set in the invitation to bid
Request for Proposals - often used for services
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Options for Purchasing
•Quotes from vendors
•State Contract pricing
•National Purchasing cooperatives
- US Communities
- NJPA (National Joint Powers Alliance)
allow participating governmental and municipal
agencies to reduce the cost of purchased goods by
leveraging their combined purchasing power.
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Q & A Time!
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Quiz Time!
What information is required to process an accounts payable
invoice for payment?
A. Verified budget authority for item, accuracy of price, items
received, and correct account code
B. Accuracy with purchase order price, amount ordered, and
correct account code
C. Verified receipt of goods, price charged, and correct account
code
D. Authorization to pay, goods received, accurate pricing, and
correct account code
Answer
What information is required to process an accounts payable
invoice for payment?
A. Verified budget authority for item, accuracy of price, items
received, and correct account code
B. Accuracy with purchase order price, amount ordered, and
correct account code
C. Verified receipt of goods, price charged, and correct account
code
D. Authorization to pay, goods received, accurate pricing,
and correct account code
Quiz Time!
What procedure should be in place for collection of unpaid
accounts?
A. Prepare an aging list by customer and send letters, email, or
call regarding collection on past due accounts
B. Immediately refuse any future services until the bill is paid
C. Prepare an aging list by customer and publish it in the local
newspaper
D. Keep the invoices on the books and wait for payment
Answer
What procedure should be in place for collection of unpaid
accounts?
A. Prepare an aging list by customer and send letters, email,
or call regarding collection on past due accounts
B. Immediately refuse any future services until the bill is paid
C. Prepare an aging list by customer and publish it in the local
newspaper
D. Keep the invoices on the books and wait for payment
Quiz Time!
To assure proper internal controls when processing timesheets
for payment, what information is needed in addition to time
worked and rate of pay?
A. Budget authority, amount approved, and employee signature
B. Account code, description of work completed, and employee
signature
C. Supervisor approval, employee signature, and account code
D. Budget authority, source of funds, and account code
Answer
To assure proper internal controls when processing timesheets
for payment, what information is needed in addition to time
worked and rate of pay?
A. Budget authority, amount approved, and employee signature
B. Account code, description of work completed, and employee
signature
C. Supervisor approval, employee signature, and account code
D. Budget authority, source of funds, and account code
Quiz Time!
Request for Proposals (RFP) must include which of the
following items?
A. Payment terms
B. Project budget
C. Proposal due date
D. Manufacturer and brand
Answer
Request for Proposals (RFP) must include which of the
following items?
A. Payment terms
B. Project budget
C. Proposal due date
D. Manufacturer and brand
81
Management of Accounting Functions
• Manage Annual Budgets
• Prepare Financial Reports
• Manage Cash Flow
• Managing Activity Accounts
• GASB
Know Your Funds
•Governmental Funds
- General Fund
- Special Revenue Fund
- Capital Projects Fund
- Debt Service Fund
•Proprietary Funds
- Enterprise Fund
- Internal Service Fund
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Know Your Funds
Fiduciary Funds
- Pension Fund
- Investment Fund
- Private Purpose Fund
- Agency Fund
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Manage Budgets
What is a budget?
An educational plan that….
- Satisfies requirements of state, local and federal governments
- Provides both expending and taxing authority
- Estimate of revenues and expenditures
- Provides a tool to measure fiscal performance
- Attempts to accomplish the financial goals of the Board of Education
and its stakeholders
- It’s an estimate.
84
Manage Budgets
Philosophies
Business as usual
Student Based
Zero Based
Site Based
Program Based
Incremental
Combination of the above
85
Manage Budgets
Begin with assumptions
- State and federal government budget projections
- Tax cap, if applicable
- Contractual obligations (collective bargaining agreements, vendor
contracts, etc.)
- Programmatic changes
- Staffing changes
- Non-routine expenditures (e.g., textbooks, uniforms)
- Technology needs
- Capital projects/expenditures
86
Manage Budgets
Budget revenue
- Local
- State
- Federal
• Difficult to forecast and budget
• Review historical trends
• Know the program or population being served
• Federal Grants are potentially difficult to budget because of the timing of
approvals
87
Manage Budgets
Budget expenses
Review assumptions on key budget drivers, make additional
assumptions and collect other expense related information, including:
Current and projected enrollment
• Trend analysis
• Cohort survival
Current and projected number of employees
Status of negotiations
Current fiscal year – year to date results
Limitations imposed by revenue projections
88
Manage Budgets
Budget expenses
• Salaries
• Benefits
• Purchased Services
• Supplies & Materials
• Capital Outlay
• Other Objects
• Out of district tuition (e.g., special ed)
89
Manage Budgets
Estimating expenditures
- Identify programs and functions
- Determine types and quantities of resources needed
- Estimate costs of each program or function
- Consider the teacher contract
• How much schedule movement can you anticipate?
• Is there a new Master’s program in town?
90
Continuum for budget reduction
•Obtain reduced prices for services
•Defer spending
•Make across the board cuts
•Eliminate “non-essential” services
•Reduce instructional positions and programs
91
Manage Budgets
Reductions through improved efficiencies
•Energy conservation
•Risk management
•Purchasing
•Privatization
•Training for operations/support staff
•Use of more efficient equipment
•Early retirement plans
•Lower salary increases
•Lower cash carryover (working cash)
92
Manage Budgets
Budgeting Adjustments
- Budget reductions due to program reductions
•Reduce instruction staff
•Reduce course offerings
•Reduce support staff
•Reduce non essential services
93
Manage Budgets
Reductions are inevitable, but how can we increase revenues to
avoid cuts?
Charge for services provided
• Facility use by others (pool, auditorium, etc.)
• Parking
Charge for non academic services
• Transportation (if not mandated)
• Private sector support
• Volunteers
94
Manage Budgets
The budget is “done”, the year is almost over, what now?
- Compare budget to actuals
• Are actual expenditures within the budgeted amount?
• How much is left to spend?
- Look at encumbrances
95
Preparing Financial Reports
•Accountability
•Transparency
•Environment of trust
•Reporting is dependant on the needs of the stakeholders
•How do you present your budget?
- PowerPoint presentation?
- Executive Summary?
- Detailed spreadsheet?
96
Preparing Financial Reports
•Consider the Budget at a Glance reporting
•Consider Performance reporting at various levels
- School and Department Level budgets
- Be considered for national budget awards
• ASBO, GFOA
• Set the professional standard for your school district
97
Managing Cash Flow
•Determine cash on hand requirements
•Cash on Hand Liquidity Test = projected estimate of the
number of days a district could meet operating expenditures
provided no additional revenues were received.
•Review historical cash flow patterns
•Evaluate anticipated changes in patterns (recession)
•Establish Board policy
•Create plan to build fund balances over time
98
Managing Cash Flow
Cash vs. Accrual
- Cash
• Recognizes revenue when received
• Recognizes expenses when paid
- Accrual
• Recognizes revenue before it is received
• Recognizes expenses when they are incurred
- Modified accrual
• Recognizes revenue when it becomes available and measurable and,
with a few exceptions, recognizes expenditures when liabilities are
incurred.
Which method is better for your district? Why?
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Student Activity Accounts
•Activity account
- ONLY benefit students
-Owned, operated, and managed by organizations within the
student body under the guidance of a faculty member
•Convenience account
- For faculty, staff, parent organizations, or similar non-student
groups
- Maintained by the district
100
Student Activity Accounts
School Board responsibilities
• Approve the establishment and purpose of each activity fund
• Set policy for student participation and adult supervision of funds
• Appoint a treasurer to oversee funds
• Ensure appropriate recordkeeping
Treasurer responsibilities
• Consistent with district funds
101
GASB - Governmental Accounting
Standards Board
GASB 54 Fund Balance Reporting and Governmental
Fund Type Definitions
• Clarifies fund types (general, special revenue, debt service, capital
projects) and their use
• Revises how balances are reported
- Non-spendable fund balance
- Restricted fund balance
- Committed fund balance
- Assigned fund balance
- Unassigned fund balance
102
GASB - Governmental Accounting
Standards Board
GASB 67 Financial Reporting for Pension Plans
GASB 68 Accounting and Financial Reporting for Pensions
– for cities, counties, and state
• Some say the biggest thing since GASB 34!
• Accounting for Cost-Sharing Plans (n/a for single employer)
• Placing the Net Pension liability on the Balance Sheet
103
Find out more about GASB at …
http://www.gasb.org/st/summary/gstsm54.html
104
Q & A Time!
105
Quiz Time!
What factors should be considered in managing the budget
for the year?
A. Compare current year's revenues and expenditures to a 10-year
average for consistency
B. Compare estimated revenues and expenditures to projected
actual revenue and expenditures for the year
C. Compare current year's revenues and expenditures to last
year’s to determine if the budget is on track
D. Compare current year's budget to other school district budgets
in the state [province] to check for consistency
Answer
What factors should be considered in managing the budget
for the year?
A. Compare current year's revenues and expenditures to a 10-year
average for consistency
B. Compare estimated revenues and expenditures to
projected actual revenue and expenditures for the year
C. Compare current year's revenues and expenditures to last
year’s to determine if the budget is on track
D. Compare current year's budget to other school district budgets
in the state [province] to check for consistency
Quiz Time!
What is an example of a "proprietary fund"?
A. A trust fund
B. A general fund
C. A capital projects fund
D. An enterprise fund
Answer
What is an example of a "proprietary fund"?
A. A trust fund
B. A general fund
C. A capital projects fund
D. An enterprise fund
Quiz Time!
What activities affect cash flow?
A. Investing and timing of receipts
B. Budgeting and timing of receipts
C. Depreciation of assets and investing
D. Financing and depreciation of assets
Answer
What activities affect cash flow?
A. Investing and timing of receipts
B. Budgeting and timing of receipts
C. Depreciation of assets and investing
D. Financing and depreciation of assets
Quiz Time!
What information should be provided in a financial report so the
governing body can determine the local education agency's
[authority’s] financial position?
A. A comparison of budget to actual revenues and expenditures and
fund balance
B. A comparison of current year budget to prior year budget
C. A comparison of expenditures that have been approved by the
school board
D. A comprehensive comparison of revenues and expenditures for the
current year
Answer
What information should be provided in a financial report so the
governing body can determine the local education agency's
[authority’s] financial position?
A. A comparison of budget to actual revenues and expenditures
and fund balance
B. A comparison of current year budget to prior year budget
C. A comparison of expenditures that have been approved by the
school board
D. A comprehensive comparison of revenues and expenditures for the
current year
114
Financial Planning and Analysis
Marvin Dereef, Jr., MAFM, SFO
Deputy Chief Financial Officer, Fulton County Schools, Atlanta, GA
Serve as School Leader
•Represent the district on financial matters
•Community
•Budget
•“Data-driven” analytical resource
•Legislature
•Bond ratings
115
Some Questions to Ponder
•What does it cost us to reduce by one child per
elementary/middle/high school? What is your overall
teacher-pupil ratio? How does it compare to similar
districts?
•How do your function costs compare to other
similar/state/provincial districts?
•How do your budget expenditures tie to the organization’s
stated mission?
116
Leadership
•“You are a fund balance manager”
•Awareness of financial trends in your state,
province, or region
•Long term planning- multi-year projections
•What are the demographic trends being seen in
your district, and what are the cost implications?
117
Legislation
•How often does the governing legislature meet?
•Is your state/ province financial system stable or
constantly being changed? What data resources are
available to you?
118
Telling Your Story
•Be ready with talking points at all times: necessary
for community and elected representatives
•Be ready to provide cost data, as legislators may
call on you for immediate answers when they are
deliberating new laws/requirements
•Demographic trends
119
Financial Impact of Strategic
Planning Goals
•Know ahead of time what a program is likely to cost: have
key metrics
•Involves working closely with program developers,
particularly Curriculum
•An example:
•Science scores need to improve
•Pilot run, funded at $120,000 to provide regular rotation of science
kits by grade level
120
Example of Budget Costs for Strategic
Objective: Improve Science Scores
•Added Science materials Center Manager
•Purchased building
•Purchased initial start up supplies for kits, expanded
each year
•Courier cost was absorbed in current mail delivery
model
•Science scores show great improvement at all levels
121
Sample Goal: Want Latest
Technology for Students
•Operational definition: “Latest” (Best? Newest?)
•TCO: Total cost of ownership (CoSN model)
•What are the direct costs of the goal?(Teacher training? Other
staff to support the equipment? R and D to identify the proper
technologies, space - small classrooms?, computers and
peripherals, supplies - more printing - e.g., paper, toner,
training, energy, opportunity cost)—What else are we giving
up?
•Capital refreshment cycle
•Bring Your Own Technology (BYOT)
122
Develop Financial Goals
•Operating cost per student
•Cost of teacher starting salaries to be highest in
region
•Fund balance policy, if not prescribed by law
•Cost of support (metrics:cost per square foot to
maintain, clean, landscape)
•Long-term strategies: 10 year facilities plan
123
Other Financial Goals
•Tax Rate Control?
•Long-term replacement plans (buses, copiers,
technology refreshment, musical instruments)
•Construction of facilities: green initiatives (LEED)
•Staff Development
•Can you point to resources in the budget that
demonstrate commitment to strategic goals?
124
Evaluate Funding Options for
Debt Management
•Typically, highly regulated…you need an attorney and a
financial advisor
•Bond programs require a long-term strategy
•Including community involvement, education, identification
of essential projects, recognition of failing existing building
systems (roofs, HVAC, e.g.), Informational materials for the
general community, tax election
•Lease vs. Buy (consider state aid funding mechanisms)
125
Funding Options for Debt Management
The following are various forms of securities, which may not be legal
in your state or province
- General Obligation Bonds
- CIBs (Current Interest Bonds)
- CABs (Capital Appreciation bonds)
- RANs and TANs (Revenue and Tax Anticipation Notes-not for raising capital, only for cash management)
• Leasing (may or may not be legal in your state/province)
• Budget Notes, Public Property Finance Contractual Obligations (PPFCOs), Lease Revenue
Obligations (public facility corporation is created which issues)
• Time Warrants
• Maintenance Notes, Delinquent Tax Notes, Stadium Revenue Notes, Refunding Bonds
126
Lease vs. Buy
•Calculate the total cost of ownership
•Calculate the cost of leasing
•Which is a better economic value?
•Which poses more risk? (for example, if you
lease, what happens if your budget cannot
sustain?)
•NON-APPROPRIATIONS clauses-include in
all contracts
127
Contract Management as Financial Tool
•Central review of all documents which bind the
district
•Be sure that someone does not “lease” what is
actually a lease-purchase capital acquisition if
your state does not permit such acquisitions
128
Develop Outside Funding Sources
•Financial advisor
•Grants- cost/benefit analysis (monitor cash
request submissions)
•Donors
•Foundations (MOUs)
•Fund raising (internal controls)
•Wise investments
129
Economic Factors
•Slower housing may lead to slower growth in
enrollment (or not! More nuclear families in
one domicile)
•Unemployment may key slower tax collections
(what are you using for collection rate?)
130
Analyze Demographic Data
•What is your cohort survival at each grade level?
•Are your lower grades more populous than your
higher grades?
•What is your free/reduced percentage over time?
•Are you enrolling more harder-to-educate
youngsters? What impact will that have on your
costs? On your general programs?
131
Analyze Demographic Data
•Housing: any new starts? Foreclosures?
•From city planning departments: Plat approvals
•Inventory of homes: size in square feet, number of
bedrooms, starter vs. move-up
•Apartments
•“Recycling” of neighborhoods (children grow up,
house sells, new family with new children)
132
Develop Multi-year Forecast
•Use Excel as an easy tool for this
•Identify major budget drivers: enrollment, property
value, income (if part of the state aid equation)
•Identify major budget costs:
•Personnel (staffing ratios) , Operating metrics
(cost per square foot or student or ‘x’)
•Other: energy, support costs, equipment
refreshment
133
Multi-year Forecasting
•Important to understand how various components
affect your state aid calculations
•Look at least three years ahead on your debt rate,
do you need to smooth it out?
•If operating rate is concern, look at combination of
both tax rates (debt and operating), consider
timed application of fund balance, if available
134
Tax Collections
•Know the local tax office officials
•Have there been any property value appraisal
studies?
•Based on longitudinal data, estimate tax
collections. Consider last three years, last five,
last ten. If the economy is changing, shorten the
comparison years.
135
Q & A Time!
136
Quiz Time!
New construction, personal income, and retail sales are
indicators in which kind of forecast?
A. Economic
B. Enrollment
C. Educational programming
D. Environmental impact
Answer
New construction, personal income, and retail sales are
indicators in which kind of forecast?
A. Economic
B. Enrollment
C. Educational programming
D. Environmental impact
Quiz Time!
Which is the leading indicator of the financial health of a
school district?
A. Property tax levy
B. Property tax valuations within the local district
C. Undesignated fund balance
D. Total assets
Answer
Which is the leading indicator of the financial health of a
school district?
A. Property tax levy
B. Property tax valuations within the local district
C. Undesignated fund balance
D. Total assets
Quiz Time!
What is the best way to find an advisor for financing a capital
improvement program?
A. Through a Request for Proposal (RFP) process
B. Request that the architect recommend a financial advisor
C. Through referrals from the school board
D. Request that the local bank recommend a financial advisor
Answer
What is the best way to find an advisor for financing a capital
improvement program?
A. Through a Request for Proposal (RFP) process
B. Request that the architect recommend a financial advisor
C. Through referrals from the school board
D. Request that the local bank recommend a financial advisor
Quiz Time!
Why are long-term forecasts generally less accurate than
short-term forecasts?
A. Because the assumptions used in the long-term projections do
not average out over time
B. Because long-term forecasts are less dependent on variables
C. Because there are fewer assumptions in long-term forecasts
D. Because there are more assumptions in long-term projections
Answer
Why are long-term forecasts generally less accurate than
short-term forecasts?
A. Because the assumptions used in the long-term projections do
not average out over time
B. Because long-term forecasts are less dependent on variables
C. Because there are fewer assumptions in long-term forecasts
D. Because there are more assumptions in long-term
projections
145
Budgeting and Reporting Activities
Marvin Dereef, Jr., MAFM, SFO
Deputy Chief Financial Officer, Fulton County Schools, Atlanta, GA
Budgeting and Reporting Activities
Project Student Enrollment
Evaluate Instructional Program(s) Costs
Develop Annual Budgets
Manage Grant Activities
Prepare for Annual Audit
146
Basic Assumptions
School budgets are under fiscal stress
- Not enough revenue
• Limits on increasing local tax levy
• Reduced State Aid continues
- Too many expenses
• Retirement Contribution Rates remain high
• Common Core
• The list goes on
147
Basic Assumptions
Districts have few options
- Reduce Programs
• Fewer electives – AP, foreign language, etc.
• Reduced sports, music, art, library, after school, etc
- Reduce amount of Programs
• Fewer sections
• Larger class size
• Close school buildings
148
Enrollment Projections
Reasons for Decline in Live Births
•Aging Population
•Personal Preference
•Increase in College attendance
•Delayed Family Creation
•Smaller Families
•National Trend
149
Projection Methods
•Ad Hoc – “gut feeling”
•Moving Averages
•Exponential Smoothing
•Linear Regression
•Cohort Survival
150
Cohort Survival
•How many births “survive” to Kindergarten?
•How many Kindergarteners “survive” to 1st Grade?
•How many 1st Graders “survive” to 2nd Grade?
…and so on, and so on.
151
Elementary Projections
•Number of Sections Per Grade / Per Building
- Current Year
- Projected Year
-Class Size Guidelines
- Identify potential for reductions
- Too close to call?
152
Secondary Projections
•Different Model
•Number of Sections Divided by Sections per Teacher
•Maximum Number of Students varies widely
- Music, Art, Gym, etc.
- AP Classes, Remedial, etc
•Much harder to get good information on class size
153
Secondary Projections
•Attrition will often be least disruptive avenue to
meaningful reductions
•Partial FTE adjustments are easiest
•The Critical Mass Argument – pro and con:
Hard to reduce buses if drop 20 kids in one year. But…what if down
500 kids vs. 10 years ago?
Q: Why still same number of buses?
A: Maybe reason justifies. Maybe more special ed?
154
Other Factors
•New Construction
- Type / Status
- Completion Date
- Amount of Available Building Lots
-Changes in School Environment
- Half Day to Full Day K
- New Charter School Opening
- Changing Demographics
155
Evaluate Instructional Program(s) Costs
•Salary and Benefits
•Cost vs. Results
•One-time vs. Continuous
156
Develop Annual Budgets
•Policy / District Goals
•Budget Process, Budget Calendar
•Approaches to Budgeting
•Revenue forecast / funding per student
• State differences
•Budget – Compensation Negotiations
157
Purpose of Multi-year Budgeting
•Generate focus on the things that matter
•Make common sense of the obvious
•Understand how today’s decisions propagate
forward
•Anticipate icebergs
•Plan soft landings
158
Manage Grant Activities
•Grant Sources
- Local, Private, Foundations
- State
- Federal
•Confirm expected funding for budget and
anticipate carryover
•Key terms – Sequestration effects, if any
•Reporting to State, Federal, Local, Private Sources
159
Prepare for Annual Audit
•Checklist
- Be vigilant about reconciliations,
documentation
•Inventory
- Cut-offs for determining year-end figures
•Year End Closing
160
Q & A Time!
161
Quiz Time!
How is per-student instructional program cost determined?
A. Add specific program costs, including staff salary, books, and
materials, and divide by the number of participants in the
individual program
B. Add all direct costs of the instructional program and divide by
the number of participants in the individual program
C. Add all direct and indirect costs of the instructional program
and divide by the number of participants in the individual
program
D. Add specific program costs and fixed costs and divide by the
number of participants in the individual program
Answer
How is per-student instructional program cost determined?
A. Add specific program costs, including staff salary, books, and
materials, and divide by the number of participants in the
individual program
B. Add all direct costs of the instructional program and divide by
the number of participants in the individual program
C. Add all direct and indirect costs of the instructional
program and divide by the number of participants in the
individual program
D. Add specific program costs and fixed costs and divide by the
number of participants in the individual program
Quiz Time!
Which grant activity should be performed on at least a
quarterly basis?
A. Calculation of expenditures of budgeted funds
B. The submittal of an application for additional funds
C. A budget revision for all grants
D. The preparation and submittal of reimbursement claims to
date
Answer
Which grant activity should be performed on at least a
quarterly basis?
A. Calculation of expenditures of budgeted funds
B. The submittal of an application for additional funds
C. A budget revision for all grants
D. The preparation and submittal of reimbursement claims to
date
166
Risk Management Activities
Jim Westrum, CPA, RSBA, CSRM, SFO
Executive Director of Finance and Business, Wayzata Public Schools, Wayzata, MN
Brian N. Moore, MBA, RSBS
Supervisor of Public Safety, Red Clay Consolidated School District, Wilmington, DE
Plan, Prepare, Protect
What will we cover?
•What is School Risk
Management?
•How do you perform a Risk
Audit?
•How to follow up a risk
audit?
•How to analyze available
insurance options.
167
168
Risk Management
A risk is "an uncertain event or condition that, if it
occurs, has a positive or negative effect on an
organization's objectives.”
Risk is inherent with any activity and risk management
should focus on the following:
•Identify risks
•Assess risks
•Manage risks
169
School Risk Management for Dummies!
The process of analyzing
the risks to the health and
welfare of our students
and staff then finding ways
to effectively mitigate that
risk!
The process of analyzing
the risks to the stability
and well being of our
physical assets, our
schools and finding ways to
mitigate them.
Making intelligent
financial decisions
regarding how to best
manage that risk.
170
What is a Risk Audit?
It is an exercise in history
and predicting the future.
A risk audit begins with a
historical analysis of
incidents that have
occurred in your schools,
including Workers Comp
Claims and Incident
Reports.
What happened and
when?
171
What’s Next?
Mitigation Planning
•Review ways to reduce
risks associated with
historical or possible future
threats.
•Purchase products or
create policies to reduce
risks associated with
operating a school.
•NEVER STOP! The cycle
continues!!!
172
Predicting the Future?
Perform a trend analysis!
- Look at weather or flood
predictions.
- Review long term
community growth trends.
- Review crime statistics
and discuss possible future
trends.
Flood Data From NOAA
173
Risk Strategies
•Avoid risks
•Control/Mitigate risks (prevent or reduce)
•Accept risks
•Transfer risks
•A CAT – (Avoid, Control, Accept, Transfer)
174
What is Insurance?
Risk-transfer mechanism that ensures full or partial
financial compensation for the loss or damage caused
by events beyond the control of the insured party.
Premium costs versus self-insured retention
•First dollar coverage
•Retention of Risk
•Deductibles
•Stop Loss
•Excess Policy
175
Types of Insurance Coverage
•Property
•Workers compensation
•General Liability
•Umbrella
•School Leaders Legal
Liability
•Cyber Risk
•Automobile
•Crime
•Inland Marine
•Builders Risk
•Employee benefits including health, dental,
vision, LTD, Life
176
Insurance Management
Outside Insurance Firms
•Review available options from
commercial business insurers.
•Allow them to help provide you with a
risk assessment!
•Don’t trust the agent who tries to sell
you flood insurance for your school on
TOP of the Mountain!
Self Insurance
•What are the risks?
•What is your current Situation?
Other Options?
•Insurance Pool?
•State Office of Insurance?
•Combination planning
•Legal insurance
177
178
Additional Resources for Risk Management
•Public School Risk
Institute
www.schoolrisk.org
•The National Alliance for
Insurance Education and
Research - www.scic.com
Certified School Risk Managers
(CSRM) Courses
•The Risk and Insurance
Management Society
www.rims.org
Fundamentals of Risk
Management
Handling School Risks
Measuring School Risks
Funding School Risks
Administering School Risks
Q & A Time!
179
Quiz Time!
How does the level of a deductible relate to managing risk for a
local education agency [authority]?
A. When the deductible is lower then the risk is lower
B. When the deductible is higher then the risk is higher
C. When the deductible is higher then the risk is lower
D. When the deductible is lower then the risk is higher
Answer
How does the level of a deductible relate to managing risk for a
local education agency [authority]?
A. When the deductible is lower then the risk is lower
B. When the deductible is higher then the risk is higher
C. When the deductible is higher then the risk is lower
D. When the deductible is lower then the risk is higher
Quiz Time!
How soon should work-related injuries be reported to the
insurance entity?
A. As soon as the school district officials are aware of the accident
B. When it is determined to be severe enough
C. As soon as it is determined that the employee needs medical
attention
D. After the medical service provider has examined the employee
Answer
How soon should work-related injuries be reported to the
insurance entity?
A. As soon as the school district officials are aware of the
accident
B. When it is determined to be severe enough
C. As soon as it is determined that the employee needs medical
attention
D. After the medical service provider has examined the employee
Quiz Time!
What conditions would trigger the liquidated damages clause
in a contract?
A. The vendor files for bankruptcy
B. The vendor does not perform in the time required
C. A bonding company takes over the project from the vendor
D. The vendor files suit against the school district
Answer
What conditions would trigger the liquidated damages clause
in a contract?
A. The vendor files for bankruptcy
B. The vendor does not perform in the time required
C. A bonding company takes over the project from the vendor
D. The vendor files suit against the school district
186
Management of School Facilities
Brian N. Moore, MBA, RSBS
Supervisor of Public Safety, Red Clay Consolidated School District, Wilmington, DE
Jim Westrum, CPA, RSBA, CSRM, SFO
Executive Director of Finance and Business, Wayzata Public Schools, Wayzata, MN
If you build it…
…they will come.
What would school look like without walls?
187
So we know we need walls!
We will review how we plan our schools.
How do we maintain our schools?
How do we build new schools?
188
You need a plan!
•How many schools do
you need?
•How many schools WILL
you need?
•How many schools do
you have?
•How long will the schools
that you have last?
189
Did you know?
•The average age of a
school in the US is 42
years old!
•1927 new schools were
opened in 2008.
•2120 schools were closed!
•Public school enrollment is
expected to increase by
12% before 2017.
190
How do we maintain them?
•A strong maintenance team
is necessary to extend the
service life of schools.
•Focus on preventive
maintenance, use electronic
work orders.
•Perform life cost analysis
rather than the early
savings!
191
Train Your Team
•They must focus on good
work skills.
•They should have a strong
sense of ownership in the
facilities.
•They can be a key
resource for any energy
saving initiatives!
192
Build your next school!
Once you know that you need
a new school…
•Where can you build it?
•How much money will it cost
to build?
•How will you pay for it?
193
Marketing for School Facilities
•Use your parents as key
stakeholders
•Sell your School Board
•Sell your elected officials
•Sell your voters or the
public!
Caution: Most states do not allow schools to advocate ,
only to inform with facts regarding school district bonds
194
Once you pass a bond or budget funding …
•Find the right architect.
•Decide what construction model
you would like to use: Managing
Architect versus Construction
Manager.
•Begin planning!
195
What else?
•Outside groups using
school facilities.
•Recreational and
sports facility
management.
•Green cleaning
initiatives.
•IPM programs.
•Energy purchasing and
conservation programs.
•Life safety management
programs.
•Fixed assets.
196
Q & A Time!
197
Quiz Time!
Preventive maintenance planning refers to which service area?
A. Facilities
B. Food services
C. School administration
D. Transportation system
Answer
Preventive maintenance planning refers to which service
area?
A. Facilities
B. Food services
C. School administration
D. Transportation system
Quiz Time!
Which should be included in the building construction
estimates for a replacement school
building?
A. The increased cost of building insurance
B. The cost associated with the transportation of students to the
interim building
C. A contingency for the cost of unexpected site conditions
D. The cost of moving furniture from the existing building
Answer
Which should be included in the building construction
estimates for a replacement school
building?
A. The increased cost of building insurance
B. The cost associated with the transportation of students to the
interim building
C. A contingency for the cost of unexpected site conditions
D. The cost of moving furniture from the existing building
202
Management of Information Systems
Matthew J. Malinowski, MPA, RSBA
Business Manager/Board Secretary, Upper Moreland Township School District,
Willow Grove, PA
Technology Leadership
Maintain technology systems
- Computer Support for all staff…and students
- Software upgrade provisions
- Budget to replace computers on regular schedule
- Plan retrofits to accommodate new technology
- When possible, make improvements when schools are being built
or renovated
- Plan for connectivity with enough bandwidth to manage current
and future needs
203
Assist in Developing Technology Plan
•What is the district’s Technology Vision?
•What is desired for children to use and to know?
•Roles include automational, transformational,
communications, efficiency
•“Mission critical”
•What is mandated?
•What does it take to get there?
204
Assist in Developing Technology Plan
Consider:
•Infrastructure, telecommunications (e-rate)
•Training of staff (critical!)
•Equipment standards and refreshment
•Accessibility of printers to classrooms (cost factor)
•Standardization of software
•Disaster and recovery (share with other schools?)
•Business interruption insurance
•Security
205
Important Things to Remember
• Internet Based Systems – need capacity
• Security: are your records housed either manually or on-line?
• In a location that is protected from intrusion? In fire-proof cabinets?
• Back-up: are your electronic records backed-up at least each night?
• If there were an emergency, have you assigned records responsibility to
anyone?
• Do you have Business Interruption Insurance?
• Is your data encrypted when attached to an email?
• Do you have “secure” thumb drives?
206
Assist in Developing Technology Plan
•High degree of attention needs to be placed on security
•Secure versus non-secure sites
•Many textbook companies are offering online textbook
enhancements, but the sites are not secure: FERPA and
privacy concerns
207
Assist in Developing Technology Plan
•Open source computing vs. proprietary software
- Open source refers to a computer program in which the
source code is available to the general public for use
and/or modification from its original design.
- Proprietary software is owned by a company and usually
has restrictions to its use, and you must purchase a
license to use. Its source code is usually kept secret
•Scope agreement – due diligence about project scope
(avoid ‘scope creep’)
•Cloud computing
208
Internet-based Systems
(Cloud Computing)
•Cloud computing is a metaphorical term referring to a model
of network computing where a program or application runs on a
connected server or servers rather than on a local computing
device such as a PC, tablet or smart phone.
•Cloud computing services provide ease of access to remote
computing sites provided by the Internet, and web-based tools
or applications that users can access and use through a web
browser, as if it were a program installed locally on their own
computer.
•Allows for ‘simpler’ devices to be used
209
Maintain Technology and
Telecommunications Systems
•Platform decisions-cost and complexity
•Staffing ratios for support - fixing and teaching
•R&D: emerging trends and technologies
•Cloud computing, in-house programming, open-source
•VoIP, POTS
•Refreshment cycles, and how funded
•E-rate decisions
•Security policies, spam filtering, content blocking
210
Maintain Technology Systems/Oversee
Telecommunications Systems
•Capacity should always be measured: when will you
need more (ports? shelves? band width?) Conduct
predictive exercises
•Planning for capacity is multi-year effort (budget and
bonds)
•License compliance
•Acceptable use policies, employment consequences
•Policies on social media-risks and benefits
211
Manage Technology and
Telecommunications Systems
•Staffing: expertise and staying competitive
with market
•Preventive Maintenance schedules
•Service Level Agreements
212
Q & A Time!
213
Quiz Time!
In addition to acquisition, maintenance and operation costs,
what is the most significant cost of a technology purchase?
A. Software upgrades
B. Replacement costs
C. Insurance Costs
D. Shipping Costs
214
Answer
In addition to acquisition, maintenance and operation
costs, what is the most significant cost of a technology
purchase?
A. Software upgrades
B. Replacement costs
C. Insurance Costs
D. Shipping Costs
216
Management of Human Resource
Functions
Matthew J. Malinowski, MPA, RSBA
Business Manager/Board Secretary, Upper Moreland Township School District, Willow Grove, PA
Manage Hiring of Good Employees
Recruitment
- Review of the necessary qualifications by
appropriate personnel: HR, principals, supervisors
- Utilize exit interview paperwork
217
Manage Hiring of Good Employees
Vacancy Notice
- Include job description or summary job
description
- Work Schedule
- Hourly rate
- Salary
218
Manage Hiring of Good Employees
•Application
•Qualifications
•Reference Check
•Interviews
- Use at least teams of two
Ensure at least one individual on the team is
knowledgeable of job functions
- Document questions and answers
- Ensure questions are appropriate
- Prohibit comments that are personal and subjective
219
Manage Hiring of Good Employees
Orientation Goals
- To Promote the new employee’s identification with the
school entity
- To facilitate the new employee’s successful adjustment to
the entity and to the position to which he/she has been
assigned
220
Manage Hiring of Good Employees
Probationary Period
- 30 days to 1 year
- Formal evaluation
221
Develop Compensation Structure
Compensation Management
- Internal Equity
•Range of pay for positions in organization and the relative
value/rate of pay assigned
- External Equity
•Rate of pay for a position as compared to the “market”
•“Market” for school districts is surrounding districts
•For some trades and technology other external data may be
relevant
•Critical to attracting and retaining qualified candidates
222
Manage Staff Development and
Training Programs
•Link Training with ASBO/ Local ASBO
•Look for appropriate college opportunities for
staff development
•Bring effective Personnel through internal and
external development programs
•Succession planning
•Adapt to generational differences
223
Manage Evaluation Process
Purpose of Evaluation
•First, it acts as the tool to evaluate administrator
performance
•Secondly, it provides the documentation necessary to
award merit increases as a result of demonstrated
performance
•Third, it provides the documentation necessary to
dismiss or non-renew
224
Manage Personnel Administration
Pertinent Regulations
- Family and Medical Leave Act of 1993 (FMLA)
The U.S. Department of Labor’s Employment Standards Administration, Wage and Hour Division, administers
and enforces the Family and Medical Leave Act (FMLA) for all private, state and local government employees,
including school entities. FMLA became effective on August 5, 1993 and entitles eligible employees to take up to
12 weeks of unpaid, job-protected leave in a 12-month period for specified family and medical reasons. The
employer may elect to use the calendar year, a fiscal year or a 12-month period prior to or after the
commencement of leave as the 12-month period.
The law contains provisions on employer coverage, employee eligibility for the law’s benefits, entitlement to
leave, maintenance of health benefits during leave, job restoration after leave, notice and certification of the need
for FMLA leave and protection for employees who request or take FMLA leave. The law also requires employers
to keep certain records.
School entities should adopt policies to clarify specific aspects of the law.
- Consolidated Omnibus Budget Reconciliation Act (COBRA)
Federal law requires that employers offer eligible employees and their dependents the opportunity for a
temporary extension of health coverage called continuation coverage at group rates in certain instances, or
Qualifying Events, where coverage under the plan would otherwise end.
-The Health Insurance Portability and Accountability Act of 1996
(HIPPA)
HIPAA protects health insurance coverage for workers and their families when they change or lose their jobs.
http://www.hhs.gov/ocr/privacy/
- Drug-Free Workplace Act of 1988
Required of any organization who receives federal funding
225
Manage Personnel Administration
- Omnibus Transportation Employee Testing Act of 1991
requires all school entities to establish programs and practices designed to help prevent accidents
and injuries resulting from the misuse of alcohol or controlled substances by drivers of commercial
vehicles subject to the commercial driver’s license (CDL) requirements
- Harassment Policy
Equal Employment Opportunity Commission guidelines on discrimination because of sex define
sexual harassment as any unwelcome sexual conduct that “has the purpose or effect of
unreasonably interfering with an individual’s work performance or creating an intimidating, hostile or
offensive work environment.”
- Americans with Disabilities Act (ADA)
Activities covered under the ADA include but are not limited to walking, talking, seeing and
hearing. People with a record of such impairment and those regarded as having an impairment are
protected under the ADA.
- Age Discrimination in Employment Act (ADEA)
prohibits employment discrimination against any individual forty years of age or older.
- Pregnancy Discrimination Act (PDA)
Employees who are pregnant must be treated the same as other employees with similar
disabilities or limitations. An employer cannot refuse to hire a woman because she is pregnant nor
may an employer terminate a woman simply because she becomes pregnant.
If an employee is temporarily unable to perform the requirements of a job due to pregnancy, the
employer must treat her like any other temporarily disabled employee
- State Regulations
Veterans Preference
State Certification Guidelines
226
Personnel Records
• Maintain medical information separate from
personnel file with other information
• Personnel office record is the absolute record
(no local files)
• Employee sign off on evaluations that they were
received
• Annual updates to directory file information
Manage Employee Benefit Programs
•The most important and overlooked aspect of
employee benefits administration is
communicating the value of these benefits to
staff
•Benefits can average 25-30% of total
compensation for most entities
228
How to Communicate Benefit Information
•Personalized statements sent periodically to each
employee showing the employee’s salary and an itemized
list of the benefits available to that employee and the
entity’s cost to provide those benefits
•Benefit booklets written so that they can be easily read and
understood by the employee
•Periodic meetings to review changes in coverage utilizing
insurance company representatives to explain coverage,
answer questions, etc.
•Orientation programs for new employees
229
Q & A Time!
230
Quiz Time!
Which of the following should be covered by the personnel
department during a new employee orientation?
A. Instructional methods to be used
B. History of the School District
C. Enrollment Trends
D. Explanation of Insurance Benefits
Answer
Which of the following should be covered by the personnel
department during a new employee orientation?
A. Instructional methods to be used
B. History of the School District
C. Enrollment Trends
D. Explanation of Insurance Benefits
Quiz Time!
Which item may be asked for in a job application?
A. Gender
B. Year of birth
C. Education
D. Age of dependents
Answer
Which item may be asked for in a job application?
A. Gender
B. Year of birth
C. Education
D. Age of dependents
Quiz Time!
When is it allowable to ask if a person needs
accommodation to perform the essential functions of a job?
A. In the job advertisement
B. In the letter of hire
C. On the application
D. During the interview
235
Answer
When is it allowable to ask if a person needs accommodation
to perform the essential functions of a job?
A. In the job advertisement
B. In the letter of hire
C. On the application
D. During the interview
Quiz Time!
. A computer technician who does repair and services to
computers and reports to the director of technology is a nonexempt employee. What does this mean?
A. The position must be paid based on a hourly rate and paid the
overtime rate for over 40 hours in a week.
B. This position may be paid on a salary basis, avoiding the need
to pay overtime.
C. Vacation and sick leave are required as part of federal law.
D. If the employee works on Sunday, double the hourly rate.
Answer
A computer technician who does repair and services to
computers and reports to the director of technology is a nonexempt employee. What does this mean?
A. The position must be paid based on a hourly rate and paid
the overtime rate for over 40 hours in a week.
B. This position may be paid on a salary basis, avoiding the need
to pay overtime.
C. Vacation and sick leave are required as part of federal law.
D. If the employee works on Sunday, double the hourly rate.
239
Management of Ancillary Services
Brian N. Moore, MBA, RSBS
Supervisor of Public Safety, Red Clay Consolidated School District, Wilmington, DE
Manage Ancillary Services
•There is a tendency in society to see the
mission of schools as exclusively instructional
•The unfortunate outcome is other areas are
ignored when they should also be valued for
their role in providing equal opportunity and
meaning to the social and educational mission
of schools
240
Transportation and Food Service Programs
•Schools would be negatively impacted
without these operations
•Every child has a right to a good education
without regard for socioeconomic status
•Every child should be able to get to school
without hardship and attend classes free from
hunger
241
Transportation and Food Service Programs
•There is no equal opportunity when educational
programs are physically inaccessible or when
children are underfed
•All stakeholders in education should be
concerned with organizing and operating efficient
systems for transporting and feeding children.
242
Transportation
•These operations are large and complex
regardless of school district size
•Urban districts use many buses to transport
thousands of students over short distances
•Rural districts also need many buses, despite
low pupil population, to travel over countless
open miles
243
Transportation
•Actual costs may be similar, and large and
small systems alike face issues of safety,
insurance, and so on
•Billions are spent annually, making it a major
industry
•Complex issues of liability, safety, and equal
access
•State and federal regulations
244
Transportation Function
•No doubt one of the most visible services in
schools
•Bright yellow school buses arrive in front of
homes of more than half of all school children
each morning
•And the bus is often the last school contact of
the day
245
Transportation Function
•Also involves taking students on field trips and
to athletic and academic events
•Also assist with other services such as special
education
246
“When floors shine, the schools seem good.”
•When buses are late or when problems arise,
everything about schools seems suspect
•As a result, transportation is one of the most
important and visible non-instructional activities of
schools
247
Complexity of Transportation
•Variables such as population density, number
of pupils to be transported, topography, road
conditions, and length of routes affecting the
size of buses on routes
•Movement of population within a community
may create new transportation demands
•Racial integration may require new school
attendance boundaries
248
Director of Transportation Services
•Requires a variety of talents and skills:
•Ability to efficiently organize a large transportation
fleet and to consistently demonstrate human
relations skills in working with personnel problems
•Skilled in decision-making to manage effectively
•Knowledge of diverse topics, including computer
routing, budgeting, labor relations, inventory, drug
testing, underground storage tanks, and
hazardous materials
249
Comprehensive Transportation Manual
•Document should be open to public, and inservice should be held with transportation staff to
clarify the policies of the district
•Special emphasis must be given to driver training,
pupil discipline, energy conservation, disability
issues, public relations, bus routes, and bus
schedules
250
Transportation Funding
•Some states provide a transportation
allowance based on hazardous walking
conditions
•In some states, transportation aid is tied to
the general fund formula
•One basic similarity: in most states,
transportation aid almost NEVER covers
the entire cost
251
What other Transportation issues
are relevant?
•Owning or Contracting
•Computerizing Transportation Services
•Purchasing Buses
•Maintenance and Safety
252
Owning or Contracting
•Contracting avoids the cost of buying buses
•Contracting avoids the high maintenance cost of older
buses
•It’s argued that contracting lowers capitalization costs,
reduces personnel and administration costs, and
provides greater efficiency through contractors whose
sole business is transportation
253
Contracting Transportation
Counterarguments, however, include:
• how to ensure quality performance by a contractor
when the district no longer controls the public
relations aspect of the contractor’s behavior
• the need for insuring against liability for acts of
contractors.
254
District Ownership of Transportation
Arguments for district ownership:
•Provides more flexibility, provides selection, training, and
supervision of transportation employees, and ensures
control over changes in operational costs
255
Computerizing Transportation Services
•Every year more districts are using computerized
routing systems
•These plans are cost-effective in that they can
apply mathematical formulas for routing
efficiency
•Aid in mapping routes, including census data,
highway time delay studies, and other manual
data supplied
256
Maintenance and Safety
•Maintenance, safety, and staff are inseparable
in any discussion of transportation
•Good drivers cannot offset bad buses, nor can
new equipment offset bad drivers.
•Transportation utmost duty: To ensure student
safety
257
Food Service Programs
•Like transportation, the food service function
is a key to effective and efficient operation of
schools
•Less visibly related to the primary mission of
schools, but provides vital support to the
instructional process
258
Food Service Function
•Need to understand the following:
•How it operates
•How meal prices are set under federal, state,
and local participation
•How revenues and expenditures in food
service budgets are allocated
•Much more regulation on meal content
259
Linking School Performance to Nutrition
•Undernourishment due to poverty and ignorance is still
sizable in today’s era of economic progress
•Data exist that link poor school performance to nutrition
•The role of food service in schools has increased with time,
as seen in the fact that most U.S. schools now have both
breakfast and lunch programs
260
Relevant Issues
•Often the biggest problem is rising costs
associated with purchasing and preparing
foods such as supply price increases, labor
costs, and equipment and facilities – all of
which must factor into what the district
ultimately charges for meals.
261
Compliance Requirements
•Compliance is a common concern whenever
outside aid is provided. Assurances are
directed to the federal government in return for
dollars and commodities
•Districts must assure states of compliance so
the state can provide its own assurances to
the fed govt.
262
Federal Rules and Regs
•Operate a nonprofit program
- Only a 3 month operating balance may be kept on hand
and still be nonprofit
•Serve meals that meet nutrition requirements
- Programs can offer single menu, fast food choice menu,
or a’ la carte menu
263
Federal Rules and Regs
•Price meals as a unit
- To count as reimbursable, meals must be priced as a
unit. This does not prohibit single item sales
•Supply free and reduced meals
- To eligible needy children
•Agree to avoid discrimination
- No child may be refused because of inability to pay, race,
gender, or national origin
264
Federal Rules and Regs
•Keep accurate records of income and
expenditures
- Records are subject to intensive state and federal audits
•Complete a formal reimbursement claim
- Claims must be sent on a timely basis each month to
the state
265
Federal Rules and Regs
•Distribute applications for free and reduced meals
- Districts must actively inform each student of the program
•Review and act on F&R applications
- Parents or guardians must be notified regarding decisions
•Develop and implement verification procedures
- A method of verifying accuracy of applications must be
followed
266
Federal Rules and Regs
•Maintain accurate participation records
- The district must establish procedures for obtaining
accurate meal counts
•Establish and implement purchasing
procedures
- Purchasing procedures must comply with state and
federal regulations
267
Federal Rules and Regs
•Use federally donated foods or commodities
- This includes the ability to store commodities properly
without spoilage
•Approved programs provide meals based on
daily nutritional requirements
- Must provide approx 1/3 of the recommended dietary
allowance (RDA)
268
Food Service Management
•Options on types of management systems
best suited to a district’s needs:
- Management companies
- Centralized in-house operations
- Decentralized in-house food service
•Careful cost analysis necessary since each
has its benefits and problems
269
Management Companies
•Use of outside management companies centers
around debate of whether it is more costeffective
•The main reason many districts have decided to
contract for food service has been a benefit
stemming from fiscal and managerial efficiency
270
Benefits to Contracting
•Administrators have more time for curriculum
•Wage and benefit costs, disputes, and
grievances have been reduced because the
district no longer handles personnel
•Menu planning is improved by use of food
professionals
271
Benefits to Contracting
•In-house record-keeping requirements are
reduced
•There is strong incentive for food service to
become a profit center with high client
satisfaction
272
In-House Operations
•Centralize or de-centralize services
•On-site food preparation vs. satelliting from central
kitchens
•‘Satelliting’ means delivering cooked food with finishing
kitchens on-site, in contrast to on-site food prep
•Major benefit is mass preparation and non-duplication of
full facilities
•Concern could be loss of site control and
responsiveness, and over standardization
273
In-House Operations
•Full time director highly trained to assure the
efficient and cost-effective operation.
•Needs skills to work closely with principals and
central office, as well as supervising service
workers
•Must work with district budget director, and
provide leadership in setting meal prices
274
Ancillary Services Wrap Up
•Ancillary services are a vital contribution to
educational outcomes
•Although often lacking in glamour, they represent
vast expenditure outlays and significant liability
•They are interrelated parts of a complete
educational system. Each piece makes a vital
contribution and can’t be slighted without
significant harm to children
275
Q & A Time!
276
Quiz Time!
What is the first thing a school business official should do when
notified by the police of a significant school bus accident?
A. Call the students' parents
B. Call the insurance carrier
C. Call the school board president
D. Call the superintendent
Answer
What is the first thing a school business official should do
when notified by the police of a significant school bus
accident?
A. Call the students' parents
B. Call the insurance carrier
C. Call the school board president
D. Call the superintendent
Quiz Time!
When managing a program, what information should be on the
report that allows you to determine whether the program is
within budget?
A. Budget, expenditures, and encumbrances
B. Prior year budget, current year budget, expenditures, and
encumbrances
C. Revenues, expenditures and encumbrances
D. Current month revenues and expenditures and encumbrances
Answer
When managing a program, what information should be on the
report that allows you to determine whether the program is
within budget?
A. Budget, expenditures, and encumbrances
B. Prior year budget, current year budget, expenditures, and
encumbrances
C. Revenues, expenditures and encumbrances
D. Current month revenues and expenditures and encumbrances