Financial Flashcards
WHY BOARDS AVOID FINANCIAL MANAGEMENT..
- SCHOOL FINANCES CAN BE CONFUSING
- THEY PREFER TO FOCUS ON TEACHING AND LEARNING
- THEY THINK IT’S SOMEONE ELSES JOB
- THEY ARE AFRAID OF MAKING A MISTAKE
ROLES OF FINANCIAL MANAGEMENT
- ENSURE ADEQUATE RESOURCES
- FINANCIAL MANAGEMENT/OVERSIGHT
- PUBLIC ACCOUNTABILITY
HOW TO ENSURE ADEQUATE RESOURCES
- ENROLLMENT/RECRUITMENT
- KNOWING THE SOURCES OF REVENUE AVAILABLE (FEDERAL/STATE)
- FUNDRAISING/GRANT DEVELOPMENT
- LOBBYING FOR RESOURCES
ENROLLMENT/RECRUITMENT
- APPROVE POLICY/BUDGET
- REQUIRE REPORTS
- ACCOUNTABILITY
- RECOMMENDATIONS FROM ADMINISTRATION AND MODIFICATION AS NEEDED
KNOWING THE SOURCES OF REVENUE AVAILABLE (FEDERAL/STATE)
- 98% FROM FEDERAL AND STATE
2. STATE 95% AND FEDERAL 5%
FEDERAL REVENUE PAYS FOR
- SPECIAL EDUCATION
- TITLE
- FOOD SERVICES
WHAT ARE THE TWO CATEGORIES OF PUBLIC FUNDS
- ENTITLEMENTS
2. GRANTS
EXAMPLES OF ENTITLEMENTS
GENERAL EDUCATION AID/FUNDING FORMULA ($5,302/STUDENT)
TITLE FUNDING
SPECIAL EDUCATION FUNDING
HOT BREAKFAST/LUNCH FUNDING
LEASE AID FUNDING
WADM
WEIGHTED AVERAGE DAILY MEMBERSHIP ($5302/STUDENT)
EXAMPLES OF GRANTS
QUALITY COMPENSATION/Q-COMP
STARTUP GRANT
PRIVATE GRANTS
GENERAL EDUCATION REVENUE
EARNED THRU PER PUPIL UNIT
$250 PER PUPIL UNIT FOR TRANSPORTATION EXPENSES
PAID THRU STATE AID
CAN BE USED FOR ANY PURPOSE
REFERENDUM REVENUE
STUDENT’S RESIDENT DISTRICT REFERENDUM AMOUNT
SPECIAL EDUCATION REVENUE
SAME AMOUNT AS IF SCHOOL DISTRICT
CAN BILL-BACK ANY ELIGIBLE UNREIMBURSED SPECIAL EDUCATION COSTS
TRANSPORTATION REVENUE
$250 PER PUPIL UNIT IF PROVIDES OWN TRANSPORTATION SERVICES
BUILDING LEASE AID
LESSOR OF $1200/PUPIL OR 90% OF CHARTER SCHOOL COSTS
MADE AVAILABLE IN 1998
START-UP GRANTS
FIRST TWO YEARS OF OPERATIONS ARE ELIGIBLE FOR THE GREATER OF $50,000 PER SCHOOL, OR $500/PUPIL UNIT
PAID BY FEDERAL
INTEGRATION REVENUE
DESEGREGATION AID. ELIMINATED IN 2004
OTHER AID, GRANTS, REVENUE
CAN RECEIVE AS IF WERE A SCHOOL DISTRICT, UNLESS THE RECEIPT REQUIRES A TAX LEVY
CAN RECEIVE FOR ANY CAPITAL FACILITIES NEEDS
FEDERAL AID
ELIGIBLE FOR ANY FEDERAL AID RECEIVED BY STATE AS IF SCHOOL DISTRICT
USE OF STATE MONEY
CANNOT BE USED TO PURCHASE LAND OR BUILDINGS
PROPERTY TAX STATUS OF CHARTER SCHOOLS
CLARIFIED IN LEGISLATURE IN 2010. EXEMPT FROM TAX IF;
- LEASE IS FOR AT LEAST ONE YEAR
- PROPERTY IS OWNED BY A SCHOOL, POLITICAL SUBDIVISION, CHURCH, OR NONPROFIT
- THE PROPERTY IS USED FOR INSTRUCTIONAL AND ADMINISTRATIVE PURPOSES
AND - THE CHARTER SCHOOL HAS EXCLUSIVE USE OF THE FACILITY OR HAS A SHARED USE AGREEMENT WITH A SCHOOL, CHURCH, OR POLITICAL SUBDIVISION
GENERAL EDUCATION REVENUE COMPONENTS
BASIC FORMULA ALLOWANCE
EXTENDED TIME REVENUE
BASIC SKILLS REVENUE
GIFTED AND TALENTED
OPERATING SPARSITY
TRANSPORTATION SPARSITY REVENUE
OPERATING CAPITAL REVENUE
EQUITY REVENUE
TRAINING AND EXPERIENCE REVENUE
SMALL SCHOOLS REVENUE
ALTERNATIVE COMPENSATION REVENUE
TRANSITION REVENUE
PENSION REDUCTION
OPTIONS ADJUSTMENT
AMCPU acrynym
Adjusted Marginal Cost Pupil Units
Adjusted Marginal Cost Pupil Units defined
The counts of pupils used for most school
funding formulas. The count is adjusted (meaning students actually served by the district),
marginal (the greater of the current year’s count, or 77 percent of current year’s count and 23
percent of the previous year’s count), and weighted by grade level (pupil units).
Aid Entitlement
100 percent of the state aid due a school district for a fiscal year, regardless
of when the aid is actually received by the school district.
Appropriation
Amount of state aid paid to a school district during a fiscal year. The
appropriation consists of a portion of the aid entitlement for the current year and the remaining
cleanup payments owed by the state to the school district for the previous fiscal year.
Average Daily Membership (ADM)
The sum for all pupils of the number of days in the
district’s school year that each pupil is enrolled, divided by the number of days the schools are
in session. The ADM is a pupil count that reflects actual student attendance over the school
year.
Categorical Aid
Funds paid by the state to school districts and designated for specific
purposes, such as transportation, special education for disabled children, and vocational
education. Categorical aids are relatively minor compared to general education revenue, the
main school district funding stream.
Fiscal Year
A 12-month period between settlements of financial accounts. The fiscal year for
the state and school districts runs from July 1 through June 30 and is identified by the calendar
year in which it ends. For example, fiscal year 2014 runs from July 1, 2013, through June 30,
2014. A fiscal year is interchangeable with a school year for school finance purposes. For
example, fiscal year 2014 is equivalent to the 2013-14 school year.
Formula Allowance
The dollar amount per pupil unit used to calculate each district’s basic
general education revenue–the “front end” of the formula. The formula allowance for fiscal year
2014 is $5,302, and FY15 is $5,806.
General Education Aid
Funds paid by the state to school districts as part of the general
education revenue program and permitted to be used for any operating expense.
General Education Revenue
General education revenue is the primary formula for providing
general operating funds to school districts and charter schools and is composed of basic
general education revenue; basic skills revenue, including LEP and compensatory revenue;
elementary and secondary sparsity revenue; transportation sparsity revenue; operating capital;
equity revenue; Q-Comp revenue; and transition revenue.
LEVY
A tax imposed on property. The amount of property taxes that a school board may levy is
limited by statute. Each autumn, the Minnesota Department of Education computes the exact
amounts of the limits on the permitted levies for each district. Each year, school boards hold
truth-in-taxation hearings, vote on how much of their maximum they want to levy, and “certify”
that amount to the county auditor. Most districts certify the maximum levy possible. A levy
certified in the late fall is collected in the calendar year beginning the following January.
Nonresident School District
A district other than the student’s district of residence that
provides educational services to the student (same as serving school district for funding
purposes).
Pupil Units
A weighted count of pupils in ADM used in the calculation of state aid and local tax
levies.
Resident District
The district where the student’s parent or guardian lives.
Serving School District
The district providing educational services to a student.
Transportation Sparsity Revenue
Component of the general education revenue program
used to provide additional revenue to school districts that have a relatively low ratio of pupils to
the square mile area of the school district.
Uniform Financial Accounting and Reporting Standards (UFARS)
Rules and instructions
adopted by the former State Board of Education under legislative mandate to govern the
methods by which school districts record financial transactions and inform the Department of
Education about their finances.
General Fund
Money used to pay general operating costs, such as teacher salaries, administrative costs, and to purchase textbooks and equipment
Food Service Fund
Money for nutrition programs—primarily school lunch and breakfast
Community Service Funds
Money for community education programs
Trust & Agency Fund
Money held in trust for others
Operating Fund Names
General Fund
Food Service Fund
Community Service Fund
Nonoperating Fund Names
Building Construction Fund
Debt Reduction Fund
Trust and Agency Fund
Statutory Operating Debt
Operating debt is defined as the net negative unappropriated fund
balance on June 30 of any year in all of the school district’s operating funds. Districts for which
the operating debt is greater than 2.5 percent of the expenditures in operating funds in the most
recent fiscal year are considered to be in statutory operating debt.
Expenditure Limitations
Beginning in fiscal year 1978, a school district in statutory operating
debt must limit its expenditures in each fiscal year such that its statutory operating debt is not
greater than it was on June 30, 1977, increased by 2.5 percent of the district’s operating
expenditures for the fiscal year at hand. School districts not in statutory operating debt must limit
expenditures so that they do not incur a statutory operating debt. If a district exceeds these
expenditure limitations, it must submit a special operating plan to reduce its deficit expenditures
to the Commissioner of Education for approval. If the plan is disapproved, the district receives
no state aid until a plan is approved.
Temporary Waiver of Fund Transfer Limits
For fiscal years 2012 and 2013 only, a school
district may transfer money from any account or fund (except the community service and food
service fund) to any other account or fund as long as that transfer does not affect the school
district’s state aid or local levy.
BASIC EDUCATION REVENUE
Product of the formula allowance multiplied by the adjusted marginal cost pupil units for the school year.
BASIC SKILLS REVENUE
Includes compensatory revenue and limited english proficiency revenue
SPARSITY REVENUE
Revenue based on the number of secondary or elementary students in a school within a particular geographic region where numbers are lower than what would be expexted to run an acceptable program.
QUALITY COMPENSATION (Q-COMP)
Requires participating school districts and teachers to develop an educational improvement plan and an alternative teacher pay system.
FUNDRAISING POLICY CONSIDERATIONS
CHILDREN INVOLVEMENT
SCHOOL’S PHILOSOPHY
WHO CAN FUNDRAISE
HOW DOES THE SCHOOL RELATE TO OUTSIDE ORGANIZATIONS RAISING FUNDS
BOARD DECIDES HOW MONEY IS SPENT
WHO IS USING SCHOOL’S TAX EXEMPT STATUS
GRANT AMOUNTS THAT REQUIRE APPROVAL FOR APPLICATION
HOW OFTEN TO GET STATUS UPDATES
LOBBYING FOR RESOURCES
EDUCATION FUNDING IS SIGNIFICANT PORTION OF STATE’S BUDGET
MACS LOBBYING VOICE
STAY CURRENT ON CHARTER SCHOOL LEGISLATURE
CHARTER SCHOOL DAY AT THE CAPITOL
BE PREPARED TO CONTACT LEGISLATORS
BOARD ACCOUNTABLE TO
PUBLIC
MDE (MN DPT OF EDUCATION)
PARENTS/STAFF/STUDENTS
AUTHORIZER
MONTHLY REPORTS TO MONITOR
INCOME STATEMENT
BALANCE SHEET
CASHFLOW STATEMENT
EXAMPLES OF INTERNAL CONTROL POLICIES
CHECKING SIGNING POLICY
HANDLING OF CASH
FUND BALANCE
JOB DESCRIPTIONS THAT ALLOW FOR ACCESS TO FINANCIAL INFORMATION
FINANCIAL MANAGEMENT TO BE ALERT TO
CASH FLOW STATEMENT
FUND BALANCE
RED FLAGS
BOARD FOCUS ON FINANCIAL RESPONSIBILITIES
JOB DESCRIPTIONS ON WHO CAN PROVIDE FINANCIAL OVERSIGHT
FINANCE COMMITTEE
BOARD EDUCATION PLAN
DEVELOPMENT COMMITTEE
BOARD’S ROLE ON ANNUAL BUDGET
UNDERSTANDS AND APPROVES BUDGET THAT REFLECTS THE SCHOOL’S GOALS AND BOARD POLICIES
BOARD’S ROLE ON FINANCIAL PROJECTIONS
APPROVES LONG TERM GOALS
