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HELPING YOUR DISTRICT STAY OUT OF FISCAL
OVERSIGHT
OSBA / OASBO Treasurers ClinicsSeptember, 2011
Presented by Roger Hardin, Assistant Director
Office of Finance Program Services
Who Are We?
Center For Student Support and Education Options
Office of Finance Program Services Tom Gumpf, Interim Director
Twenty Area Coordinators providing direct services to districts
Roger Hardin, Assistant Director
Nine Fiscal Consultants providing direct services to districts
Two Fiscal Consultants serving as Commission Chairs
One Fiscal Consultant serving as Secretary/Monitor to Commissions
2
Five Year Forecast: Where It All Begins
Requirements per ORC 5705.391 and OAC 3301-92-04:
Electronic submission of both projections and assumptions to ODE by October 31
All districts must update the forecast between April 1 and May 31
ODE must examine the five year forecasts and determine if a district has the potential to incur a deficit during the first three years
Closed period from August 15 to October 15
3
Fiscal Year 2011, ProjectedDistricts in fiscal oversight – 35
Projected low fund balances – 28
Projected fund balance deficits - 64
Fiscal Year 2012, ProjectedDistricts in fiscal oversight – 35
Projected low fund balances – 32
Projected fund balance deficits - 285
Fiscal Year 2013, Projected
Districts in fiscal oversight – 35Projected low fund balance – 46Projected fund balance deficits - 135
6
What Do We Do?
Districts are to be contacted if any of the following four flags appear:
Current Year Deficit – Direct contact from fiscal consultant
Current Year Low Fund Balance – Direct contact from fiscal
consultant
Deficit in Year Two – Letter from Columbus office requesting
plan to eliminate the deficit
Deficit in Year Three – Letter from Columbus office
7
Current Year Deficit
For October, 2011 forecast, this will be FY 12 Fiscal Consultant will contact the district Treasurer
either by phone or in person Need to determine if district can complete the fiscal
year without incurring a deficit Consultant may offer services:
Forecast review with Treasurer Financial Analysis Arrange Staffing Analysis with Area Coordinator Arrange presentation for district officials and/or BOE
8
Current Year Low Fund Balance
For October, 2011 forecast, this will be FY 12 Fiscal Consultant will contact the district Treasurer
either by phone or in person Need to determine if district can complete the fiscal
year without incurring a deficit Consultant may offer services:
Forecast review with Treasurer Financial Analysis Arrange Staffing Analysis with Area Coordinator Arrange presentation
9
Deficit in Year Two
For October, 2011 forecast, this will be FY 13 District will receive a letter from Columbus office
requesting a plan to eliminate the projected deficit before it becomes reality
Plan due to Columbus office within sixty days of letter Plan cannot include anything that is not yet approved
Levies Items requiring negotiations Advances from County Auditor
10
Deficit in Year Three
For October 2011 forecast, this will be FY 14 District will receive a letter from Columbus office
notifying them of a projected deficit Letter may not request a plan to be submitted, but
encourages district to develop a plan to eliminate the projected deficit
District officials may contact ODE to discuss status or request services
11
When Is Fiscal Caution Declared
Per ORC 3316.031, fiscal caution may be declared for any of the following reasons:
When ODE determines through the five year forecast that fiscal practices or budgetary conditions exist that could result in the declaration of fiscal watch or fiscal emergencyWhen the AOS reports those practices or conditions exist, or when the district shows a 2% – 8% deficit and decides not to place the district in fiscal watchA district fails to submit a five year forecast or a proposed plan to eliminate a deficit upon request
12
Fiscal Caution Recovery PlanDistrict: Column I Column II Column III
County: Projected Deficit Proposal that Proposal for
Date Submitted: ODE Financial - date Addresses Deficit Next Fiscal Year
REVENUES - OPERATIONAL FY11 FY11 FY12
1.010 General Property (Real Estate)
1.020 Tangible Personal Property Tax
1.030 Income Taxes
1.035 Unrestricted Grants-in-Aid/State Foundation
1.040 Restricted Grants-in-Aid
1.045 Restricted Grants-in-Aid (SFSF Fund 532)
1.050 Property Tax Allocation
1.060 All Other Operating Revenue
1.070 Total Operational Revenue $
- $
- $
-
REVENUES - NON-OPERATIONAL
2.070 Total Non-operational Revenue
2.080 TOTAL REVENUE $
- $
- $
-
EXPENDITURES - OPERATIONAL
3.010 Personal Services (Salaries & Wages)
3.015 Personal Services (Salaries & Wages)(SFSF Fund 532)
3.020 Fringe Benefits
3.025 Fringe Benefits (SFSF Fund 532)
Sub-total -- Salaries & Benefits $
- $
- $
-
3.030 Purchased Services - Util., Cont. Other Ins.
3.040 Materials, Supplies & Textbooks
3.050 Capital Outlay (Equip. buses, etc.)
3.060 Intergovernmental
4.300 All Other Objects
Total Operational Expenditures $
- $
- $
-
EXPENDITURES - NON-OPERATIONAL
Total Non-operational Expenditures
5.050 TOTAL EXPENDITURES $
- $
- $
-
7.010 General Fund Cash Balance - Beginning of FY $ -
7.020 General Fund Cash Balance - End of FY $
- $
- $
-
8.010 Encumbrances
Unencumbered General Fund Cash Balance $
- $
- $
-
UNEXPENDED RESERVATION OF FUNDS
9.010 Textbooks and Instructional Materials
9.020 Capital Improvements
9.030 Budget Reserve
9.070 Bus Purchase Reserve
9.08 Total Reservations $
- $
- $
-
10.010 Fund Balance June 30 For Certification of Appropriations $ -
$ -
$ -
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Monthly Monitoring Fiscal Consultant will provide a list of the reports
necessary for the monitoring, including the SM-1 and SM-2 or similar spreadsheet
A specific time and date are established Treasurer is expected to be present On site monitoring may be bi-monthly if conditions
allow Consultant will review BOE minutes, financial reports,
recovery plan, etc. Monitoring report is reviewed by Columbus office to
assure continued progress of the district14
Services Provided by ODE
Consultation with district officials regarding the five year forecast and/or Benchmark Report
Financial Analysis
Arrange for a Staffing Analysis
Presentation to district administration, BOE, and/or community groups
15
What Can a District Do?
The ORC does not preclude a district from ending the fiscal year with a negative fund balance, however . . .
What other districts have done in the past: Districts may request a cash advance from the County
Auditor Withhold certain payments, such as health insurance MOU with Associations to delay payroll Short term TAN for end of June, available for expenditure
after July 1 to cover withheld payments Ask their consultants for additional assistance and review
16
Final Thoughts on the Forecast
Line Item 1.045 which includes funds from Accounts 532 and 504 will soon be deleted
ODE has requested the addition of Line 1.015 to include County Auditor advances
Reminder to send in both the forecast spreadsheet and assumptions anytime a forecast is updated
Please review to ascertain the correct forecast is being submitted
17
ORC 3316.20 Solvency Assistance and Catastrophic Grants
Solvency Assistance Advances: Only available to districts in fiscal
emergency Require Controlling Board approval Based on the AOS ‘certificate of deficit’ To be repaid from Foundation payments
over the next two years HB 153 offers some minor changes
18
ORC 3316.20 Solvency Assistance and Catastrophic Grants
Catastrophic Grants: Available when a district experiences an
“unforeseen catastrophic event” Grant is not repaid ODE and OBM must request Controlling
Board approval for the grant
19
Frequently Asked Questions
Q. Can a district go into fiscal oversight without a deficit?
A.Yes, if the district does not comply by submitting a forecast or recovery proposal, or if the forecast shows conditions exist that could cause the district to end up in fiscal emergency.
Q.What can a district do to prevent fiscal emergency?
R.Increase their revenue, decrease their expenditures, or a combination of both.
Q.When should I contact ODE to discuss our financial situation?
R.Anytime you have a question regarding the district’s financial status or forecast.
Q.Is there any other information available, especially for a new treasurer?
R.On the ODE website there is a document titled “New Chief Fiscal
Officer/Treasurer’s Guide” which is intended to offer suggestions and advice for new
personnel.
20
Your Fiscal Consultants
Name: Office Phone: E-mail:
Neil Allen (419) 668-2914 [email protected]
Dale Burdett (330) 343-8875 [email protected]
Bob Foss (330) 232-2835 [email protected]
Dean Horton (513) 770-4349 [email protected]
Rob Miller (419) 523-5088 [email protected]
Jackie Osborne (740) 592-6622 [email protected]
Doris Pearce (330) 898-2256 [email protected]
Londa Schwierking (937) 570-0604 [email protected]
Janet Smalley (740) 947-7746 [email protected]
Pat Williard (740) 503-9869 [email protected]
Roger Hardin (614)466-5568 [email protected]
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