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School Finance An Overview. Presented by: Bill Maas. Budget and Finance. Overview of funds Maintenance and Operation Budget Calculating limits Tax Rate Assessed Valuation Expenditure Categories Questions. Various Funds. BONDS. SPECIAL FUNDS. INSTRUCTIONAL IMPROVEMENT FUNDS.
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School Finance An Overview Presented by: Bill Maas
Budget and Finance • Overview of funds • Maintenance and Operation Budget Calculating limits • Tax Rate Assessed Valuation • Expenditure Categories • Questions
Various Funds BONDS SPECIAL FUNDS INSTRUCTIONAL IMPROVEMENT FUNDS FEDERAL/STATE PROJECTS MAINTENANCE & OPERATIONS CAPITAL OUTLAY
Special Funds PURPOSES: Food Services Civic Center Gifts and Donations Lost Textbooks Indirect Costs Tax Credit SPENDING LIMIT: Amount Generated by District FUNDING SOURCE: Local Activity – Fees, Rent, Etc.
Federal/State Projects PURPOSES: Title I, IDEA, Title II, Title III, etc. ELL/Bilingual SPENDING LIMIT: Grant Allocation – Entitlements or Discretionary FUNDING SOURCE: Government – State and Federal
Instructional Improvement Funds PURPOSES: Proposition 301 Proposition 202 SPENDING LIMIT: Amount Generated by Formula Based on Weighted/Unweighted ADM FUNDING SOURCE: State Revenues Tax Initiatives
Maintenance & Operations PURPOSES: Regular Education Special Education Desegregation Transportation SPENDING LIMIT: Formula – BRCL, TRCL FUNDING SOURCE: Local Taxes (Primary Property) State Aid County Equalization Assistance
Maintenance & Operations Budget The maintenance & Operations (M&O) Fund budget is where most of the day to day expenditures take place. Typical budgeted expenditures include: salaries, employee benefits, supplies, utilities, maintenance and repair, and miscellaneous expenditures not of a capital nature. Although the format formula computation of the M&O Fund is very structured, the process of determining how the monies will be spent varies among school districts. Typically the budgeting process starts months before the budget year begins. The M&O Budget limit is based on a number of formulas heavily dependent upon the Average Daily Membership (ADM) of the first 100 days in session (A.R.S.§15-901A.2). School districts are funded on prior year ADM and charter schools on current year ADM. ADM means the total enrollment of fractional students and full-time students, minus withdrawals, of each school day through the first hundred days in session for the current year (A.R.S.§15-901). This basic Maintenance and Operation Expenditure Budget includes the following formulas: Base Support Level (BSL) (A.R.S.§19-943) Transportation Revenue Control Limit (TRCL) (A.R.S.§15-946) Capital Outlay Revenue Limit (CORL) (A.R.S.§15-961)
Base Support Level (BSL) Base Support Level = Weighted Student Count X Base Level Amount
Transportation Support Level (TSL) Based on the average daily route miles per eligible student transported. K-8 Students - 1 mile from their school of attendance. 9-12 Students – 1.5 miles from their school of attendance. Daily Route Miles State Support Per Eligible Student X Level per Route Transported Mile for 2007-08
Capital OutlayUnrestricted/Soft Capital PURPOSES: Improvement to Grounds Improvement to Buildings SPENDING LIMIT: Formula – CORL (Unrestricted Capital), Soft Capital FUNDING SOURCE: Local Taxes (Primary Property) State Aid County Equalization Assistance
Capital Outlay Revenue Limit (CORL) UNRESTRICTED CAPITAL Unweighted Actual Student Count (K-12) X Support Level = CORL SOFT CAPITAL Unweighted Actual Student Count (K-12) X Support Level = SFA
M&O and Capital Outlay Funding LOCAL (PRIMARY TAX) QTR (1.60) Adjacent Ways Items Outside the Limit Desegregation Excess Utilities LOCAL (SECONDARY TAX) Override STATE State Equalization Assistance County Equalization Assistance
How Budgets are Categorized I. MAINTENANCE AND OPERATIONS 001 FUND After a governing board has determined the amount to be budgeted as part of the general operating fund within the limits described in this report, the parameters of spending for a fiscal year are established as the M & O Budget - Fund 001. This overall fund is further divided into specific programs. The three main programs are: Regular Education, Special Education, and Pupil Transportation. For reporting and accounting purposes, each of the subsections is further subdivided by function (instruction, support services, operation of non-instructional services, construction services, debt services and other financing uses) The total budget for the M & O Fund cannot exceed the budgetary formulas previously specified except for certain items outside the limit, and the expenditures cannot exceed the budgets established. As mentioned previously, even if a district does not have sufficient cash balance in the M & O and other levy funds, it may still spend up to the budget limit by registering warrants. It is the budget limit, or capacity, that determines expenditure capability rather than cash availability.
How Budgets are Categorized A. REGULAR EDUCATION – PROGRAM 100 This program is used to account for expenditures relating to activities that provide students in grades K-12 with learning experiences. Expenditures not specifically assignable to other programs should be classified here. B. SPECIAL EDUCATION PROGRAMS – PROGRAM 200 This program is used to account for expenditures relating to activities for students having special needs. Included are specified handicapped classifications as defined in A.R.S. §15-761 and gifted, vocational, remedial, bilingual and career education programs. C. SPECIAL EDUCATION, DISABILITY – PROGRAM 300 This program is used for Title 8 P.L. 103-382 add on monies. D. PUPIL TRANSPORTATION – PROGRAM 400 This program is used to account for operating expenditures relating to transporting pupils to and from school or school activities. E. DESEGREGATION EXPENDITURES – PROGRAMS 510-513 This program is established to account for the expenditures related to a desegregation plan either court ordered or by administrative agreement with the United States Department of Education Office for Civil Rights for the purpose of remediating alleged or proven racial discrimination. A separate budget must be maintained for these expenditures. The annual Financial Report must contain a detailed accounting of these expenditures. Expenditures must be solely for the purpose of satisfying the compliance with an approved desegregation plan.
IX. CHART OF U.S.F.R. EXPENDITURE CATEGORIES CHART OF ACCOUNTS AND EXPENSE CLASSIFICATIONS UNIFORM SYSTEM OF FINANCIAL RECORDS (USFR) (Further information may be obtained from the Chart of Accounts in the U.S.F.R. for Arizona School District or U.S.F.R. for Arizona Charter Schools) How Budgets are Categorized Note 1: School Districts and Charter Schools should use Object Code 6910 to record indirect costs for the total project budget excluding capital expenditures. Note 2: For Charter Schools, the acquisition of Buildings and Equipment by purchase, construction or lease purchase is coded to an asset account-0180. School Districts should code the acquisition of Land, Land Improvements, Buildings and Equipment to Object Code 6700 under the proper function code.
