Strategic School Finance Training
CDE/CSFP
Introduction to School Finance
Mark Rydberg
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Agenda
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Public School Finance Overview
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CDE Public School Finance Unit’s “Charge”
The Public School Finance Unit provides support to school districts in the implementation of requirements set forth by the legislature and Colorado state statute.
This includes implementation of the distribution of school finance formula funding and other funding streams.
In addition, we provide support to districts and boards of cooperative educational services (BOCES) by assisting with submission of required financial data, providing reports of financial data and assisting with the implementation of various school finance legislation.
The School Finance Unit also provides technical guidance and capacity building to district finance teams.
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High Level
Every District/BOCES/Charter
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Budget
(Dec-Jun)
Audit & Pipeline & CDE-40
(Aug-Dec)
Mill Levies
(December)
Grants
(Monthly/Quarterly)
High Level are requirements of all finance teams throughout the year to ensure effective finance operations, planning, strategy and leadership for the district. Policies, Procedures, Practices are “Local” decisions, and vary widely across the state.
PSFU supports districts to ensure compliance with statute.
Local District/BOCES/Charter
Finance Operations
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Payroll
Accounts Payable
General Ledger &
Bank Reconciliation
Receipt Revenue
Other Duties??
These are requirements of all finance teams throughout the year to ensure accurate finance operations & reporting. Policies, Procedures, Practices, & Systems are “Local” decisions, and vary widely across the state.
Limited PSFU supports, as no guiding CDE statute for these activities.
Theory of Action: Provide a Tiered System of Supports
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15 new finance officials in a structured one-year training cohort. Regular individual check ins.
Monthly Group Classes. Site visits.
Cohort
Small sessions & gatherings on
topics of interest for early-mid-career
school finance professionals.
Network
Professional development and office hours.
Community
CDE/PSFU Website Navigation
Public School Finance Unit
https://www.cde.state.co.us/cdefinance
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CDE/PSFU Website Navigation
Public School Finance Unit
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CDE Website Navigation
Public School Finance Unit -Continued
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CDE/PSFU Overview
Public School Finance Unit
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School Finance Overview
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FY23-25 Total Program & Categorical Funding
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School Finance Total Program Funding
Equals Funded Pupil Count (Greater of current OR highest average of the last two to five years)
with adjustments for Size of District and Cost of Living
plus Extended High School funding
then…Budget Stabilization Factor is applied
Total Program Funding Components
PSFU website Resource: Funding Calculation Worksheet Rows 292-298
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Timeline of Total Program Revisions
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Categorical Funding (Main ones)
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School Finance Factors
District Voter Approved Tax increases (C.R.S. 22-54-108)
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Mill Levy Overrides
Bonds & COPs
General Obligation (GO) Bonds
Certificates of Participation (COPs)
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Financial Transparency
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Accounting/Tactical
Group
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Bank Reconciliations
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Why is the Bank Rec Important?
Why Do A Bank Reconciliation: 5 Reasons to Reconcile Monthly
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Materials Needed
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Check to make sure G/L = Bank Rec
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Basis of Accounting
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Basis of Accounting
The basis of accounting refers to the methodology under which revenues and expenses are recognized in the financial statements. There are 3 different methods:
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Fund Accounting
Deeper Look into Modified Accrual Accounting
Modified Accrual Basis of Accounting
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Governmental Accounting
Best Practices
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Role of the Auditor
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Role of District
The District's management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. GAAP & GASB.
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Fund Reporting
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Chart of Accounts
https://www.cde.state.co.us/cdefinance/sfcoa
Pipeline Tip: Submit Early & Often
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Chart of Account Chart fields
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For Expenditures:
Appendix N: Rolling to the Bold. Chart of Accounts page 217 (221 pdf)
Basic Accounting Principles
Accounting Equation
Accounting Equation
The Trial Balance generated from general ledger system must balance to Zero.
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Accounting for Rev, Exp, & Balance Sheet
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Trial Balance = The Object(Expense), Source(Revenue), or Balance Sheet Code has to Equal 0.
The Chart of Accounts are structured to align with the Federal Reporting Standard for Public Education.
Chart of Accounts - Rolling to the Bold
Chart of Accounts - Appendix N: Rolling to the Bold*
The Chart of Accounts is designed to meet legal and regulatory requirements and generally accepted accounting principles while providing as much flexibility as possible for the local school district. For instance, code structure and definitions allow for varying degrees of detail depending upon local district reporting needs.
CDE will aggregate data upon receipt of electronic data files by “rolling” unbold code data into appropriate BOLD code data. An example follows on the next slide which demonstrates how “rolling to the bold” works.
* NOTE: This is also referred to ‘rolled-up’ data (2nd Tier in data pipeline)
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Chart of Accounts - Funds
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Location Codes
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If using 100, 200, 300, & 500s. District may want to clean up or stay consistent.
Optional
Special Reporting Element OR 00
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Pipeline has no rules regarding SREs
Program Codes - Instructional
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Program Codes - Non-Instructional
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Object Codes
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Object/Source Code Also Includes:
Revenue/Source Codes
Balance Sheet Codes
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Job Codes
Needed for all Salary (01XX) & Benefit (02XX) Object codes
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Project/Grant Codes
Project Codes:
Grant Codes:
OR
0000
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Understanding Governmental Accounting
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Governmental Accounting Governing Organization
What/Who is GASB?
Established in 1984, the Governmental Accounting Standards Board (GASB) is the independent, private- sector organization based in Norwalk, Connecticut, that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles (GAAP).
What are Pronouncements?
Each of the final Statements of Governmental Accounting Standards issued by the GASB since its establishment in 1984 is designed to provide taxpayers, legislators, municipal bond analysts, and others with information that is useful to their decision-making process regarding governmental entities. For Example, GASB 87 & 96 establishes a single model for lease and SBITAs accounting based on the principle that leases are financing of the right to use an underlying asset.
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Government and Business Differences
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Governmental Fund Accounting
What Types of Funds are there?
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Governmental Accounting Principles
These Principles are accepted world wide in order to make Financial and Organizational comparisons possible.
Time Period. This basic concept says that a business should report in Final Accounts all its financial activities and transactions over a standard period of time – usually monthly, quarterly and annually.
Consistency. An adopt an accounting principle or method, continue to follow it consistently in future accounting periods. Only change an accounting principle or method if the new version in some way improves reported financial results.
Full disclosure. All information should be included in an entity's financial statements that would affect a reader's understanding of those statements.
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Governmental Accounting Principles -
Profit and Loss Accounts
Matching. Revenue should be recorded during the period when it is earned regardless of when the business received Cash. Expenses should be reported in the same period in which the corresponding Revenue was earned. For Example, June services invoice paid in July 2023 should be be expensed in FY23 & Accounts Payable 7421 instead of cash.
Revenue Recognition. Or, the realization concept. It says that all revenues and profits should be recorded in Final Accounts when the legal title to the product is transferred from the seller to the buyer. Meaning, that when the good or service have been provided to the customer. Not when the order was taken or when the cash was paid. For Example, FY23 Grant revenue requested after June 1, 2023 & Received in July uses Accounts Receivable 8142 instead of cash. Conversely, unearned revenue 7482 is used to decrease revenue when higher than incurred expenses.
Accruals. 60 day window after fiscal year end date. Accruals happen when the business received something, but has not yet paid for it. For example, Salary & Benefit Accrual paid in July and August for Services provided in FY23.
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Governmental Accounting Principles -
Balance Sheet Accounts
Double-entry. Double-entry means that every time a business engages in a business transaction, there are always two sides of this transaction – Debit and Credit. These two sides must be properly recorded and balanced to maintain correct information. For example, when a business sells ready products to customers for Cash, Inventory decreases and Cash increases on the Balance Sheet.
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Wrap Up
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Wrap up & Conclusion
What did you learn today?
What else keeps you up?
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