Presented by:
Anthony Bridges, CFE, Deputy Executive OfficerMarisa Ploog, CPA, Fiscal Intervention Specialist
CCSESA Session IIIAB 1200 Fiscal Oversight
Using Budget Explorer
B U D G E T E X P L O R E R v. 5. 0Multiyear Financial Forecasting Software for K-12 School Agencies
AB 1200 Using Budget ExplorerIntervention Starts with the COE
Looks like another “immunity challenge” lies ahead in 2012-13
AB 1200INTERVENTION STARTS WITH THE COE
Intervention is progressive and needs technical tools− The type of fiscal intervention should be tailored to the
severity of the district’s financial problems
− An adverse interim report or disapproved budget requires the COE to determine the level of corrective action
Remember, the COE goal is to assist a district in resolving its financial problem at the lowest level of outside intervention
MULTI YEAR FINANCIAL PROJECTION
From 1994 through 2000, no state emergency loansWhat has changed?
SACS Requirements – minimal−Simple spreadsheets−COE requested districts to demonstrate basis for SACS certifications
Continued State Budget reductions & cash deferrals
CASH FLOW PROJECTIONS
Historical PracticeAccounting exercise – no deferralsJust another form requirementSpread budget balances evenly over remaining months
Present CircumstanceCOE provides fiscal intervention to local school districts – Cash shortfall = COE loan or State Intervention Trigger
WHEN LACK OF CASH TRIGGERS A CRISIS
Cash shortfall requires State Loan, referred to in Ed Code as Emergency Appropriation
Urgency Bill, sponsored by local representatives to the State Legislature
Requires two thirds vote of each house of the Legislature Requires Governor’s signature Process may take from 4-6 months
State Intervention Process
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AB 1200 FISCAL OVERSIGHTSTATE LOANS
Of the 8 districts and community colleges that have received state loans, 6 were certified qualified or positive at the interim immediately preceding the need for a state loan.
In comparison to other districts with state loans, King City bears an increased burden in financing and repayment of its state loan since it is not held harmless from the costs associated with financing and the loan carries a significantly higher interest rate.
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WHAT HAPPENS IF A DISTRICT GETS INTO FINANCIAL TROUBLE?
Intervention by the county office of education
The role of FCMAT
Responsibilities of a fiscal advisor
Responsibilities of a trustee
Responsibilities of a state administrator
Superintendent & Board get voted off the island
WHY DISTRICTS FAIL— COMMON ERRORS
• Lack of a position control system• Overly aggressive estimates of enrollment and ADA• Failure to consider loss of enrollment to new or expanding charter
schools• Poor or nonexistent charter school oversight• Loss of control of staffing costs—total compensation• Poor agreements made in collective bargaining• Rescinding layoff notices too early
WHY DISTRICTS FAIL—COMMON ERRORS, CONT.
• Not monitoring encroachment in restricted funds• Chronic, unplanned deficit spending• Underestimating the amount of “real” cuts to balance the budget
current plus two years• MYFP errors or lack of detailed assumptions • Not treating federal revenues as one-time • Not restoring expenditures for one-time furlough days/salary
reductions in subsequent fiscal years• Use of one-time money for ongoing expenditures
WHY DISTRICTS FAIL—COMMON ERRORS, CONT.
• Not responding to state funding reductions quickly enough or generally being too slow in decision making
• Ineffective in cost containment for special education programs• Miscalculating debt service capacity of developer fees and RDA
and having the general fund pick up the difference• Not using proper modeling for dealing with cash deferrals—
dividing by 12 is not a good strategy• Incorrect or nonexistent cash flow projections• Board/staff dysfunction• No Cash
WHAT IS “FINANCIALLY TROUBLED?” A financially troubled district:
− May have a history of deficit spending− May have qualified or negative interim reports− May have its budget disapproved by the County Office of Education
(COEs)− May not be able to conform to multiyear projection standards− May not have enough cash to meet its obligations− Probably has poor oversight and monitoring of its finances− May have all of the above!
In short, a district that cannot meet state standards on its own There is no “hidden immunity idol” for those who fail to plan
MULTI YEAR AND CASH FLOW PROJECTIONSUsing Budget Explorer
MYFP/cash flow are significant technical tools MYFP is a significant communications tool Assumption details are critical when it comes to
MYFP Most accurate in the base year, least accurate in the last year (year 3 generally)
The SSC Dartboard keeps us consistent statewide Preparing a MYFP or cash flow may feel like an
“immunity challenge”
FINANCIAL PROJECTIONS– TODAYS NECESSITY
Multi-Year Financial Projections Using Budget Explorer
BE provides for detailed analysisNew focus on resource/program demands today AND tomorrowIdentify and document MYFP shortfalls early on to provide greater response timeProvides a path for COE’s & Districts to build “Alliances” to strategize and prevent being voted off the islandTeaching moments
FORCASTING – TODAYS NECESSITYUsing Budget Explorer
Cash Flow Projections
Districts may not qualify for TRANS or have other fundsKnow the districts monthly payroll requirements Know the possible encroachment demands of restricted resourcesCommunicate-Communicate-Communicate – meet with your districts
MAXIMIZING BE PERFORMANCE
Supports any internet browser including:− Google Chrome, Firefox, Safari, Internet Explorer
New Server Hardware, Virtual Server Environment
Optimized software
BE MODEL MANAGEMENT
Creating a new model− Import SACS file
• Detail limited to SACS roll up• Locally defined resources must be established and redistributed
− Import from financial system• Requires coordination with COE & technology services• Greater detail – all resources – detailed object codes
Copying an existing model− Retails detail & rules− Updates may be needed
ADDING NEW PROJECTIONS
SHARE PROJECTIONBuilding Alliances with your Districts
Select projection (mouse over and click)
Click button On the projection sharingscreen select User and click buttonfor Read-only group or Read-write group
NAVIGATION TREE
• Summary– Unrestricted – Restricted• Import from SACS file roll up
-Add resources for locally defined-Deleting resources with no activity
TAB 1.) HOME – Projection Adjustments General projections settings listed on mouse over
Home page Statistics section contains links to projection adjustments
− Upload base values− Change projection title− Change number of years to forecast− Enable/disable audit logging
TAB 1.) HOME – Audit Log
Audit log is enabled by default Use report page to revise audit log for the
projection
TAB 2.) RULES
• Rules drive assumptions• Rules never affect the “base
year” (Budget Import)• Based on SSC Dartboard• Rules can be modified for
specific resources or objects• Hovering mouse over rule
icon
TAB 3.) ENR/ADA/STAFFING
• Extra care here can make a big difference in the MYFP
• Has a direct affect on projected:ADA populationRevenue Limit sources
• Prefill from CBEDS
• Projection methodsCohort progressionKindergarten
TAB 4.) SALARY FORECASTER
• Allows for greater detail in future costs
• Managed by resource
• Only salaries in object 1100
ADA data imports from Enrollment and ADA screens
Base revenue limit per ADA imports from SACS form RL
TAB 7.) AUTO BAL Used to balance resources with negative ending fund
balances in MYFP
Make all adjustments first! (including indirects)
This step is usually done last when completing MYFP
Two approaches:
− Reduce 4s, 5s, 6s (but you can change the sequence)
− Contribution from unrestricted (SpEd, RRM & Transportation)
TAB 6.) CASH FLOW Matches budget data in the resource summary
Multiyear cash flow projection
Established projection schedules
Cash deferrals schedules are updated
Revenue by resource detail or aggregate
Expenditures always aggregate
No required entry order
FCMAT cash flow tutorial
CASH FLOW ACTUALS - Upload
Actuals can be uploaded from file using button
CSV file format can be found on the Upload cash flow actuals window under sample file link
Select action for objects and import mode
CASH FLOW CREATION
If you did not enter your balance sheet information when you initially created your model start by selecting “create projection” and enter them.
You can also enter them directly on the cash flow screen.
Clicking the icons in the asset or liability GL section will provide you with additional common object code selections
ADDING ADDITIONAL ASSET & LIABILITY ACCOUNTS
CHECKING YOUR BALANCES
Checking your balances:
+ Beginning cash+ Budgeted revenue- Budgeted expenditures+ General ledger asset balances- General ledger liability balances
= Projected Ending Fund Balance
ACCESSING THE CASH FLOW PROJECTION
DETAIL REVENUE TRANSACTIONS
Revenue data is stored by individual resource and object
Access and enter revenue transaction detail by clicking on the object code series
PROJECTION DISTRIBUTION SCHEDULES
BE automatically includes the updated deferral schedules Revenue receipt schedules established by funding
source/resource Expenditure disbursement schedules established for each
major object code range Established schedules can be viewed by selecting the
tab on the cash flow
TAB 8.) TOOLS
Disclosure of Collective Bargaining Template
Fiscal Health Risk Analysis Report
TAB 9.) REPORTS
EDIT VALUES REPORT GENERATED
From resource screen this option provides you with detail across all resources for a particular object code. Good for balancing detail such as 8980, 8990, and 7310.
May require further drill down to access……..
PLANNING BEYOND NEXT YEARDEVELOPING THE MYFP
Other Fund Analysis
Future Salary Agreements
Future Program Needs
− Technology maintenance
− Opening/closing a school
− New textbooks
BUDGET EXPLORER FOR CHARTER SCHOOLS
983 Charter Schools year to date Approximately 100 charters schools approved
annually FCMAT is in the software development process Anticipated release in August\September 2012 Includes calculations for the General Purpose
Apportionment and Block Grants Software using “Wizard” approach with
questions to populate data
BUDGET EXPLORER FOR CHARTER SCHOOLS