NEW MEXICO PUBLIC EDUCATION DEPARTMENT

Transcription

1 NEW MEXICO PUBLIC EDUCATION DEPARTMENT Hanna Skandera, Secretary Paul Aguilar, Deputy Cabinet Secretary Finance and Operations SCHOOL BUDGET & FINANCE ANALYSIS BUREAU Steve Burrell, Director Pamela Bowker, Deputy Director 1

2 PRESENTATION OVERVIEW REPORTING REQUIREMENTS PRE-BUDGET ACTIVITIES REVENUE SOURCES EXPENDITURES LOCAL BOARD RESPONSIBILITES RELATED STATUTES SUSPENSION OF LOCAL BOARD OF FINANCE RECOMMENDATIONS 2

3 CYCLE OF PUBLIC SCHOOL BUDGETING ACTIVITY SCHOOLS OPEN AUGUST - SEPTEMBER MEMBERSHIP PROJECTIONS DUE OCTOBER EPSS EDUCATIONAL PLAN FOR STUDENT SUCCESS FUNDING PROPOSALS PRESENTED DECEMBER FINAL APPROVED BUDGET APRIL - JUNE PROJECTIONS UPDATED APPROPRIATIONS MADE JANUARY - MAY

4 REPORTING REQUIREMENTS REPORTING REQUIREMENTS Calendar of Reports Financial Reporting Quarterly/Monthly Federal Reimbursement Requests Food Reimbursement Requests Instructional Materials 4

5 PRE-BUDGET ACTIVITIES Budget Committee Education Plan for Student Success (EPSS) Capital Outlay needs (Meet with your Bond Advisor) Timelines: Operating budgets due to the School Budget & Finance Analysis Bureau 10 working days prior to the scheduled budget review date. Types of Reviews: Formal, Technical or Phone Local Board Approval should be obtained in accordance with the open meetings act prior to June 20th (Section , NMSA). The Public Education Department will approve the budget on or before July 1 st. (Section , NMSA) 5

6 LOCAL SOURCES.5 MILL DONATIONS INVESTMENTS RENTS, ETC. FEDERAL SOURCES PED Federal Grants Federal Grants STATE SOURCES REVENUE SOURCES State Equalization Guarantee Supplemental Emergency 6

7 EXPENDITURES Salaries & Benefits are equal to approximately 85% to 90% of the Operational Budget Other Operational Expenditures Fixed Costs Capital Outlay Technology 7

8 Local School Board Responsibilities In accordance with Chapter , a local school board must review and approve the annual school district budget. except for expenditures for salaries, contract for the expenditure of money according to the provisions of the Procurement Code [ NMSA 1978]; 8

9 LOCAL SCHOOL BOARD RESPONSIBILITES (Cont d) Allocation of Resources Stay within your Budget Difference between Cash and Budget Revenue/Expenditure Reports Cash Transfers (Perm or Temp?) Budget Adjustment Requests (Inter versus Intra) 9

10 LEGISLATION Section NMSA School Finance Audit Report Requirements Provides for the Public Education Department (PED) to impose sanctions for those school districts and charter schools that do not submit timely audits. The Requirements: The required annual audit report must be submitted by the due date specified by the State Auditor. The Sanctions: Within 90 days: The entity will be put on monthly financial reporting to the PED. After 90 days but within 180 days: The entity may have up to 5% of its current-year SEG temporarily withheld by the PED. After 180 days but within 270: The entity may have up to 7% of its current-year SEG temporarily withheld by the PED, and may be required to submit a corrective action plan to the Secretary of Education. After 270 days: The entity may have up to 7% of its current-year SEG temporarily withheld and may be subject to the Secretary of Education s suspension of its board of finance. Who this affects: School districts, charter schools and regional education cooperatives (REC) This law becomes effective July 1,

11 Section Local School Board Finance and Subcommittees; Audit Committees; Membership; Duties Why was this law passed? There have been recent financial issues with school districts in which audits were not completed for several years or other financial issues occurred which were not known by the local school board until much later. What does this statute do? Statute requires local school boards and governing authorities of charter schools to establish finance subcommittees and audit committees. The Finance Committee Under this statute, a local school board must appoint at least two members of the board as a Finance Committee. 11

12 Section Local School Board Finance and Subcommittees; Audit Committees; Membership; Duties (Continued) The duties of the Finance Committee are to make recommendations to the local school board in the following areas: (1) financial planning, including reviews of the school district s revenue and expenditure projections, (2) review of financial statements and periodic monitoring of revenues and expenditures, (3) annual budget preparation and oversight, (4) procurement. The Finance Committee will also serve as an external monitoring committee on budget and other financial matters. 12

13 Section Local School Board Finance and Subcommittees; Audit Committees; Membership; Duties (Continued) The Audit Committee Under this law, a local school board must appoint an audit committee that consists of: Two board members, One volunteer member who is a parent of a student attending that school district and One volunteer member who has experience in accounting and financial matters. The superintendent and the school district business manager shall serve as ex-officio members of the committee. 13

14 Section Local School Board Finance and Subcommittees; Audit Committees; Membership; Duties (Continued) The duties of the Audit Committee are: (1) Evaluate the request for proposal for annual financial audit services (2) Recommend the selection of the financial auditor (3) Attend the entrance and exit conferences for annual and special audits (4) Meet with external financial auditors at least monthly after audit field work begins until the conclusion of the audit, (5) Be accessible to the external financial auditors as requested to facilitate communication with the board and the superintendent, 14

15 Section Local School Board Finance and Subcommittees; Audit Committees; Membership; Duties (Continued) (6) Track and report progress on the status of the most recent audit findings and advise the local school board on policy changes needed to address audit findings, (7) provide other advice and assistance as requested by the local school board and (8) be subject to the same requirements regarding the confidentiality of audit information as those imposed upon the local school board by the Audit Act and rules of the State Auditor. 15

16 Suspension of a School District s Board of Finance - Section NMSA 1978 The department may at any time suspend a local school board or governing body of a statechartered charter school from acting as a board of finance if the department reasonably believes there is mismanagement, improper recording or improper reporting of public school funds under the local school board's or governing body of a state-chartered charter school's control. 16

17 Suspension of a School District s Board of Finance - Section NMSA 1978 (Cont d) When a local school board or governing body of a state-chartered charter school is suspended from acting as a board of finance, the department shall: Immediately take control of all public school funds under the control of the local school board or governing body of a state-chartered charter school acting as a board of finance; Immediately have an audit made of all funds under the control of the local school board or governing body of a state-chartered charter school acting as a board of finance and charge the cost of the audit to the school district or state-chartered charter school; Act as a fiscal agent for the school district or state-chartered charter school and take any action necessary to conform the fiscal management of funds of the school district or state-chartered charter school to the requirements of law and good accounting practices; Report any violations of the law to the proper law enforcement officers; 17

18 Suspension of a School District s Board of Finance - Section NMSA 1978 (Cont d) Act as fiscal agent for the school district or state-chartered charter school until the department determines that the local school board or governing body of a state-chartered charter school is capable of acting as a board of finance or until the department determines that the county treasurer should act as fiscal agent for the school district or state-chartered charter school; Inform the local school board or governing body of a state-chartered charter school in writing of the department's determination as to who is to act as board of finance or fiscal agent for the school district or statechartered charter school and also inform the county treasurer in writing if it determines that the county treasurer should act as fiscal agent for the school district or state-chartered charter school; and Consider commencing proceedings before the commission to suspend, revoke or refuse to renew the charter of the state-chartered charter school in the case of a state-chartered charter school that has engaged in serious or repeated mismanagement, improper recording or improper reporting of public school funds under its control. 18

19 Recommendations for School Boards Every board meeting should have an agenda item where the board gets an update of the status of the district s budget and other finance related items. The Board should know about the status of the current year audit. Has the RFP been prepared? Has the auditor been selected? When is the entrance conference? When is the exit conference? What are the findings from the audit? The Board should know about the status of outstanding audit findings from previous years. Have they been corrected? Do we have a plan to correct outstanding audit findings? 19

20 Recommendations for School Boards (Continued) The Board should have a sense of student membership trends since this drives the amount of funding the district will receive from the public school funding formula. Are we declining? Are we growing? The Board should know if finance reports are submitted to the PED in a timely manner or are they late. If they are late, why are they late? In summary, the Board should not be involved in the day to day operation of the district but should be informed regarding all district financial matters. 20