Finance 5342 Week 5, Part 3 Course Reflection

I found this course to be the most challenging of any of the courses up to this point. I do believe it is probably one of the most important courses we will take. Superintendents must have a knowledge and understanding of school finance. The current cutbacks from the State have made it even more important for school leaders to maximize funding sources and revenue for their school district.

As I reflect on my self-assessment in Competency 8 from our first course taken (5396) in this program to now, I realize how much I have grown. Competency 8 was one of my weakest areas when I evaluated myself in course 5396. This course (5342) has helped me broaden my knowledge and awareness of school finance. My self-assessment in course 5396 reflected; no Strengths, Competent in 5 indicators and Improvement needed in 6 indicators. Upon the completion of this course I found myself able to mark two indicators a strength. I moved to the competent level in all other areas. My level of “Competent” varies per indicator. Some I felt were maybe a “Strength”, but I did not feel comfortable in leading the activity (per description of scoring criteria) and others I feel at the bottom of the “C” level with still needing to gain more knowledge but not necessarily an area I felt I needed to mark an “I”. This course (and previous ones) has helped me grow in not only Competency 8 but several competencies.

The following is my reflections of course lectures, assignments and activities over the last 5 weeks of this course:

Week one began by helping me gain knowledge concerning the history of school finance. As one who has been in education for 18 years I knew of a few court cases relating to school funding but I really had no knowledge of historical events in school finance leading up to the current funding formula.  Week 1 also got helped me to evaluate the current school funding system and understand issues such as equality, equity and adequacy. Part 2 and 3 of week 1 allowed me to begin to see just how inadequate our current funding system is. Again, discussion I have heard for several years but never really had an understanding of until this course/assignment. The last part of this assignment showed me the importance and connection between campus/ district improvement plans and the budget planning process.

Week two allowed me to evaluate my district improvement plan and look at from the aspect of a goal driven budget. The key point to me during this assignment was when Dr. Arterbury shared during the lecture that the plan should be a “version of the vision”, relating to district/campus plans and board goals. During week 2 I continued to gain a better understanding and knowledge of key factors used in budget development, TEA budgeting guidelines, the role of the Superintendent during the budgeting process and the importance of stakeholder input. I also learned that the budget process is basically a yearlong process which follows a timeline highlighting key events for the process throughout the year. Some of these include legal actions such as public hearings and deadlines budget has to be voted on by school board. During week two I begin to obtain a better understanding of WADA.

Week three assignments lead to a better understanding of the impact State Targeted Revenue and WADA.  Week three assignments showed me key areas to look at when comparing school districts snapshot data from a financial aspect. The assignments provided me with a better understanding of the impact groups such as Economically Disadvantaged, Special Education, ESL, GT, Compensatory Education, etc., play in projecting funding revenue. By comparing the two school districts data I began to actually see the discrepancy in our state funding system and was able to comprehend what I have been hearing school district leaders talk about for several years.  I was also able to compare identical snapshot data from sample districts with snapshot data of our district. This allowed me to see the impacts we had been discussing first hand by knowing the student population and make up of our school district.

In Week Four I achieved an understanding of the FIRST rating system. Up to this point I knew a system like this was used but I had never realized the rating received from FIRST is just as important as the academic rating the district receives. Week Four also allowed me to understand the audit process used in our school district which appeared to be very similar to procedures outlined in weekly lecture and other groups based on discussion boards/wiki’s. Week four continued to allow comparison of school district, in this case large vs. small. It became very apparent from the data and assignments that larger school districts had an advantage in many areas. Continuing to show school finance discrepancies discussed daily around the state.  

Week five brought closure to the course by having us review the “Code of Ethics” from the Texas Administrative Codes. The assignment had us focus on ethical conflicts dealing with financial issues. I am fortunate that we have not had any finical wrong doings in our district. Ethics are key elements when dealing with the public. It is important school administrators are leaders in the community and have high standards.  This is essential in gaining the trust of district employees and the community. In today’s society everyone is “under scrutiny” as people are slowly losing trust in federal and state government.

I really liked our class discussions on epic discussion board, wikis and blogs. Although I have never actually met my classmates face to face I feel I know them well. Our wiki group got off to a slow start but by the end of this course we were really coming together. Posting ideas and discussions on each other wiki’s nightly. I like the group work and being able to share ideas with each other. It really helped me have a better understanding of weekly topics.

This course also allowed for several in-depth conversations with our school Superintendent and business manager. I really learned a lot from them through the various interviews. The various interviews and questions helped show me how items we were learning about in our weekly lecture/assignments related to our school district. They each remarked how practical our weekly assignments were in comparison to school finance courses they had taken in the past. The real life examples helped me gain a better understanding.

In closing, I believe this class will be one I will not actually realize how much I learned until I begin to use the information I have learned. As part of my internship I plan to be involved as much as I can with budgeting throughout the year. I feel this course has given me the tools and “reflective skills” necessary for dealing with school finance. I look forward to putting the information learned from this course into action.

Finance 5342 Week 5, Part 1

Finance 5342 Week 5, Part 1

1.       Explanation and examples from Standard 1 and 2 of Texas Administrative Code 247.2

The following examples relate to violations in the area of financial issues.

Standard 1.2 – The educator shall not knowingly misappropriate, divert, or use monies, personnel, property, equipment committed to his or her charge for personal gain or advantage.

Examples of violations in Standard 1.2 could include district employees using school property/equipment/tools to perform personal work on a part time job for extra money or business he/she may operate.  This could include having maintenance workers perform non-school district work for someone, such as district administrator, during district working hours.

Standard 1.3 – The educator shall not submit fraudulent requests for reimbursement, expenses, or pay.

Examples of violations in Standard 1.3 would be falsifying travel records. This could occur when an employee uses their personnel vehicle for school business. Employees may falsify mileage log turned in or may even drawing a mileage check when riding with someone else. Other examples could include employees drawing full daily meal per diem with not even purchasing meal (complimentary meals) or purchasing items for personal use (which can easily be associated with classroom use) with a school purchase order or credit card.

Standard 1.5 – The educator shall neither accept nor offer gratuities, gifts, or favors that impair professional judgment or to obtain special advantage. This standard shall not restrict the acceptance of gifts or tokens offered and accepted openly from students, parents of students, or other persons or organizations in recognition or appreciation of service.

Examples of violations in Standard 1.5 could include Superintendent’s taking bribes. Situations like this can occur during times such as textbook adoption, building projects, athletic facilities, equipment purchases, etc. During these times it is important the Superintendent follow all guidelines (state laws and district policies) for what type of gifts he/she can accept and be up front with following all reporting requirements.

Standard 2.3 – The educator shall adhere to written local school board policies and state and federal laws regarding the hiring, evaluation, and dismissal of personnel.

A violation in Standard 2.3 could include someone being hired or fired based on salary. An example of this could possibly be a veteran teacher or administrator being passed over for a job or promotion only because their salary would be more than maybe a first year teacher or administrator. Similar in gesture would include a district firing or non-renewing an employee because they are on the upper end of the districts pay scale.

Standard 2.5 – The educator shall not discriminate against or coerce a colleague on the basis of race, color, religion, national origin, age, gender, disability, family status, or sexual orientation.

Violation examples provided in Standard 2.3 could also fall under this Standard 2.5. Other examples would include: not hiring or firing someone based on color, religion, age, gender and/or sexual preference or different pay scales (with similar qualifications) depending on the above categories.

Standard 2.6 – The educator shall not use coercive means or promise of special treatment in order to influence professional decisions or colleagues.

Violations in Standard 2.6 could include someone influencing another individual by promising a job promotion or salary bonus to the individual if the decision of the requestor is granted.

2.       Consequences for violating standards.

The consequences for administrators, teachers or any employee who violate a standard can vary depending on the incident. School districts have policies and procedures in place that outline how the standards will be followed and consequences for not following.  Consequences can range from receiving a verbal/written reprimand, being placed on a growth plan or probationary contract, re-assignment; to termination of employment, report to SBEC, loss of certification and/or criminal charges. An individual who is allowed to maintain their certificate would have to disclose information pertaining to incident when applying for future positions or risk someone else reporting the violation to the district.  Standard 1 appear to be easier to identify and can be charged with criminal charges. Standard 2 violations are a little harder to prove, they would fall more into a civil rights category.

3.       Preventative Actions

A.      Communicate district policies and procedures to all employees annually. Have documentation showing they understand and know how to access all district and campus policies.

B.      Review annually the school districts check and balance system/policies. Follow all policies at all times.

C.      Establish a school district cultural of ethical behavior from the top down, starting with school board and superintendent.

When looking at preventative actions and relating to quality indicators found in SBEC Superintendent Competency 1, I found the following to be of importance when dealing with finance issues and this assignment:

Model and promote the highest standard of conduct, ethical principles, and integrity in decision making, actions, and behaviors.

 Exhibit understanding and implement policies and procedures that promote district personnel compliance with The Code of Ethics and Standard Practices for Texas Educators.

Monitor and address ethical issues impacting education.

Apply laws, policies, and procedures in a fair and reasonable manner.

Finance 5342 Week 4, Part 4

Finance 5342 Week 4, Part 4

Personnel salaries make up 80.19% of Azle ISD’s total budget. This is from General Fund 199 and does not include any federal money or payrolls. Upon receiving this information I was a little surprised it was so high. Over the years, I have heard our Superintendent and other Central Administrators say that 80%-85% of our total budget was allocated for salaries. Over the past several years our district has been cutting back on personnel. We have absorbed over 75 positions through attrition, this has included central administration positions, teaching positions, para-professional positions, clerical positions and custodial staff.  No raises were given to any employees this year. The district also decided to apply for waiver of 25:1 ratio in lower elementary. The result of these cutbacks, over the past three years, allowed Azle ISD to not have to lay-off any employees and adopt a balanced budget (with a little help from the fund balance). With all this being stated, I was surprised to find that the overall salary expenses are still a little over 80%.

There are many positive and negative impacts associated with a 5% salary increase. For the current school year our budget would not have been able to support a 5% increase in salary. A raise to employees is a huge morale booster, especially in today’s times when we are asking employees to do more than before.  Any time employees are given raises I feel this improves your overall moral, which in turns helps recruit along with retain good employees. This helps creates a better atmosphere inside the classroom for students.  As mentioned in this week’s lecture by Dr. Stephens, “excellent teachers are the key to an excellent instructional program”.

The negative side of a raise this year would have been “deeper” cuts in other areas, which could have (but I do not see how) include personnel. In my opinion it is hard to cut lay-off employees and justify giving a pay increase to others.  Sometimes a salary increase can be perceived by some as negative depending on how raises are given and if all groups get raises (administrators, teachers, auxiliary staff, etc). Often not all groups get raises. If percentage raises are given, employees at the lower end of the salary schedule are not happy because they do not get as large of raise. Across the board raises of a set amount are often used but again can have a negative impact on veteran staff who feel they “deserve” a larger increase than beginning teachers.  A raise increase could also have a negative impact in the community, more so if people in the community are having tough financial times and/or unhappy with the school district. This would be true in a situation where the school board raise taxes in an effort to generate additional funds for salary increases.

In concluding our discussion our Superintendent ended by saying the bottom line is “if you can afford it do it, if you can’t afford it you can’t do it”. I know often we hear this but unfortunately in today’s times of school finance this is the case in school districts all across the state. Most districts have awarded some salary raise for the past several years but found themselves in a position of not being able to do so this year.

Finance 5342 Week 4, Part 5

Finance 5342 Week 4, Part 5

I interviewed our Business Director concerning our district financial audit procedures. Our school district had used the same auditing guy for several years. The auditor passed away and we had to secure another auditor last year. The procedures discussed in this week’s lecture were very similar to the ones our district used in seeking an auditor.

1.       The district sent out a Request for Proposal (RFP). She indicated that the audit proposal is not necessarily a formal bid but they used the bid process. Once all proposals were received her and the superintendent narrowed down the choices and presented to the board. The board adopts the auditor’s letter on yearly bases.

2.       The auditing firm comes out for 3-4 days in June/July for a preliminary visit. During this time they do field work such as pulling invoices and gathering general information.  They then come back sometime after August 31^st for about a week.  The auditing group is given full access to all information and business office personnel. Our Business Manager is the main contact person. The group returns around November to share the full report and any findings with the Business Manager and Superintendent.  The auditor then shares the report with the board as an agenda item during a board meeting. The board then accepts the report.

3.       The audit report includes a complete and comprehensive checklist of all the district’s finances. This includes separation of duties and responsibility, making sure everyone is following policies and procedures put in place as well as looking for any abnormal patterns. Actions must be taken on any findings and the problems must be corrected. The audit information not only becomes public record but it also submitted to TEA.

4.       The results are presented and adopted by the board. They are communicated through the local newspaper and district newsletters.

Fortunately for the past 15 years our district has received excellent audit reports and financial ratings. I enjoyed visiting with our Business Manager. The visit stressed the key points discussed in the weeks lecture by Dr. Stephens and helped me relate the process to what I have seen occur in our district.

Summary of Budgeting Guidelines

I found TEA Budgeting Guidelines, Update 14, from January 2010 to be a very beneficial document as well as one I will use in the future during the budget process. Even though the document was very lengthy I found it very easy to read and pick out key points. I felt the preface of the document went right along with what we have been discussing and studying up to this point about school districts budget process in terms of defining purpose of budget as well as key points.

I learned that the budgeting process is made up of three phases: planning, preparation and evaluation. There are several budgetary approaches used. They are: Line-item budgeting, Performance budgeting, Program and Planning – Programming Budgeting, Zero-Base budgeting, Site-Based Budgeting and Outcome-Focused Budgeting. I gained information on each type, an overview of how they work along with the advantages and disadvantages of each. I was able to learn more about state laws/ TEA regulations and the budgeting process, again building on Part 2 of assignment as well as gaining a better understanding of budget functions. The resource guide contained samples of budgeting calendars and helpful charts.  The rest of the document went into more detail on functions and allocations. I also gathered the importance of revenue projections.

This document contained a wealth of information. In fact it was a little overwhelming. I do have a better understanding of some aspects from the last two week’s assignments but still do not feel comfortable with developing a district budget. I do believe the more I learn about developing the budget the more helpful and useful this document will become. It is a document I will keep close for a resource. I have learned a lot the last two weeks but still have a way to go. Having a document like this one gives me a peace of mind knowing I will be able to reference and look back over as needed.

Additional stake holder input

Week 2, Part 5 – Additional Stakeholder Input in the Budgeting Process

I interviewed our school superintendent, Dr. Ray Lea, on the topic of additional stakeholder input in the Budgeting Process. He stressed the key was to communicate, communicate and communicate with all stake holders during the budgeting process. His responses to the following groups are highlighted below:

·         Central Office – Start discussing in January. Have Central Office really look at and evaluate their departments.

·         Principals – Start discussing budget allotments in early spring. Campus needs assessment.

·         Site Based Decision Making Committees/ District Improvement Committee – Discuss and adopt district and campus improvement plans. Meet regularly to review and evaluate.

·         Teacher Organizations – He holds a yearly informal type meeting with ATPE officers to get their input and feedback, time to meet and listen to their issues and concerns.

·         Key Stakeholders – Dr. Lea made reference to school groups, PTO’s, Booster Clubs, Civic groups, Retired teachers association and local newspaper. Again he stressed communicating with these groups.

·         Board – OVER COMMUNICATE, start communicating early, no surprises, want them to always be prepared for worse case scenarios when discussing budget issues (this year perfect example)

As I reflect over my interview the key issue was being sure to communicate (good news or bad) with all groups when discussing budget and budget concerns. Be up front at all times and do not hide anything

Reflection of Supt interview - budget process

Reflection of Superintendent Interview – budgeting process

I learned a lot during the interview with our school superintendent, Dr. Ray Lea. Our interview lasted about 1 ½ hours. He expanded and we reflected on several items we had discussed or learned about during week 1 and currently during week 2.

It is my opinion that he is very knowledgeable on school finance. During the interview, Dr. Lea shared with me that in his opinion there are two tracks toward being a superintendent, especially in regards to school finance. One track is starting in smaller school districts (no assistants) and working your way up. One learns on the job by having to know the role and duties of all aspects: finance, transportation, personnel, food service, technology, etc. The other track is working in larger districts and gaining information from assistant superintendents/directors. Dr. Lea’s background comes from smaller districts. He shared several stories about being worried about preparing the budget and meeting budget deadlines early in his career.

I learned a lot from Dr. Lea in regards to calculating revenue. He shared and we even worked through the formula of: total property values x 1.4 (max M&O) = X , take X x 95% (never collect 100% of taxes) = Y which is local tax revenue. This lead to a discussion of WADA and targeted revenue. He also explained and showed me how to calculate amount needed to set I&S.

I was able to learn more and realize the importance of having a calendar to highlights key points and events during the budgeting process. Some of our conversation focused on the drastic state cutbacks and the strategies our district used trying to compensate for the reduction. Dr. Lea explained he started communicating with the board, staff and community a 1 ½ prior to legislative session in an effort to prepare them for what was coming. Our district implemented a hiring freeze and absorbed positions through attrition. The key of this discussion was communication and planning.

Overall I learned a lot from the interview. In one way it was a little discomforting to know I will be responsible for this process at some point. However, Dr. Lea reassured me that the state template is pretty easy to use and there are several resources as well as colleagues who will assist me through the process.

Superintendent interview - budget process

Superintendent Interview – Budget Process

I interviewed our school superintendent, Dr. Ray Lea. I found our interview to be very beneficial and helpful. I began the interview by describing what we had learned and discussed in week 1’s lesson as well as the first part of this assignment focusing on a goal driven budget. We discussed the importance of knowing about and being able to discuss the concept of goal driven budget when interviewing for superintendent positions. He shared that this is a very “hot” topic when interviewing and one has to have an understanding and be articulate in describing the process.

He likes to start the process with board goals. He said he likes to focus on 5 broad goals to define the goals of the district. The five he focuses on are academics, district personnel, safe environment for students & staff, communication (including community & public relations) and budget (good, sound stewards of tax payers’ money). This are discussed with District Leadership Team and adopted by board. After setting the district visions and goals it is up to individual campuses to be more specific and include specific strategies to meet campus goals which need to have a strong connection with district goals and vision.

When specifically asked what the superintendent’s role is during the budgeting process Dr. Lea quickly responded it varies by the size of the district. In our district (4A) there is a business manager and staff responsible for developing the budget. However, his background is from smaller districts. He shared in smaller districts it is the total responsibility and duty of the superintendent, which can be very challenging for a beginning superintendent. He did discuss he is involved in the budget process and reminded me that by law the superintendent is responsible for the school district’s budget.

For Dr. Lea the budget process starts immediately after current budget is adopted. He said this year the budget was adopted by the board on a Thursday night, on Friday morning he was in the business manager’s office discussing next year’s budget (basically preparing for next year’s additional 2 million dollar cut). The calendar our district uses is the TASB model. He said it is very important to follow a written calendar during the year so the district does not miss posting deadlines. He and the business office are in constant communication about upcoming dates and events. He stressed the two critical dates/ deadline: August 20^th budget prepared by & August 31^st adopted by school board.

During the budgeting process Dr. Lea said he works with the business office on calculating revenue projections and prioritizing every aspect of the district in order to get the best “bang for the buck” with the funds available. Dr. Lea pointed out it is important to pay particular attention to percentages of special funds used, such as: Compensatory Education, Special Education and Career & Technology.

We discussed cutting the budget; he cautioned me by discussing to watch federal law, especially when dealing with federal programs. He said often a district may have required amount they must spend or may not be able to cut more than a certain percentage based on previous year.  He stated that in most districts 83% of the budget is personnel expenses. This can be difficult to cut without a plan of action.

In the interview we also discussed using the state funding template for planning and preparing the budget, the use of property values, WADA (targeted revenue dollar), Maintenance & Operations (M&O) and Interest and Sinking (I&S) calculations.

In the end Dr. Lea reminded me the “buck stops” with the superintendent when it comes to the school district’s budget.