Final Reflection- Finance

I must say that I have benefitted from this course more than the others as it was probably one of my largest need areas. Prior to this, the extent of my budget experience was limited to spending and maintaining Function 36 in a previous district.

The pre and post assessment was excellent and provided me with both a measuring stick, and an affirmation of progress. Comparing the two, it is easy to see growth in my comfort level. The one component to reference from the above assessment is: establish district procedures for accurate, effective, ethical purchasing and financial record keeping and reporting. It is my lone “I.” I need to research it some to feel comfortable. Strengths included working collaboratively with stakeholders to develop a working budget, and prioritizing both time and assets towards goals.

The interviews were great as well. The professors bring a wealth of practical knowledge from public education. It is important that they are uniquely tied in to current topics and issues- most especially in finance.

I learned a tremendous amount about how districts are funded through local taxes, as well as state and federal funding. I have a clear understanding of WADA and its intended efforts to fund higher need districts. Assignments that explained M & O and Interest and Sinking Funds were beneficial as well.

In all, the course has been amazingly challenging and time-consuming (but well worth it). In all honesty, If I could reflectively be critical of a component, it would be the whole wikigroup concept. I completely understand, agree with, and appreciate the collaborative position of the course. But with all our busy schedules and coursework habits, it is difficult to work through consensus statements due to time issues. Some members work through the week. Others like to crank assignments out early, while still others are unable to get to it until the last weekend. Again, with that be said, I appreciate it as it is the only way to have correspondence in this set-up without face to face contact. I only wish it was scaled back a bit.

This particular course is one I will draw from on a very regular basis should I move into an upper administrative position. Even at the campus level, understanding and emphasizing a goal driven budget is essential. This course taught me how important that was. More than anything else, now I can talk budget a little. It helps out considerably when you attend board meetings or budget workshops.

Kudos to the professors and developers of this course. Special thanks to Dr. Stephens and Dr. Eason for always being available.

Ethics

I chose not to post my actual summary here due to the sensitive nature of some of its content. I don't want the occasional viewer to try to put faces with names in this case. I actually feel posting that content in an open forum would actually be unethical in itself.

This exercise really got me thinking, however, about how sometimes carelessness plays a role in ethics. Sometimes the intention isn't necessarily unethical. But the end result, due to carelessness, is. The occasional slip of the tongue. A little twist in one's mind as to what is right or wrong or fair.

As administrators, we really must think before we act. Our decisions affect so many.

Hey brother, can you spare me a 5% raise?

As of 2010-11, our total payroll costs constituted 82.5% of our general revenue. This figure is actually slightly in excess of $17 million ($22.5 million total expenditures district-wide).

It obviously makes up the vast majority of our budget. Our salaries are competitive within that area, but there are larger, more diverse schools around that pay substantially more.

A 5% pay bump would push total payroll costs to approximately $17,935,861. This would constitute 86.66% of our total expenditures. Our revenue stood at $22,493,037 this same year.

In short, the 5% raise would be sustainable in the short term. Additionally, our fund balance is in excess of $6 million. We actually got hit in FIRST (as mentioned above) for excessive funds. So short of a financial breakdown altogether, we could sustain the increase for a number of years.

Positive attributes of the raise would include increased morale, an increase in the competitiveness of our district in hiring and retaining talented teachers, and an infusion of funds back into our community (as the vast majority of our staff both lives and works in our district).

The only negative I can initially see is the possible eating away of a healthy fund balance should property values significantly decrease (or state funding concerns of course). The other is that the increase might not be sustainable in the long haul if the above conditions come to fruition. There are laws in place that don’t allow for salary reductions across the board. Therefore, the possibility of a RIF or (bare minimum) not replacing departing or probationary staff could be a reality.

External Audit Interview- CFO Tim Brittain

Interview

I interviewed Tim Brittain, our CFO at Huffman ISD. He has been very helpful and is extremely knowledgeable about the process. The following is both a summary and reflection of the audit process:

• How is the external auditor selected?

The auditor is selected through an interview process. Initially there is an RFQ (request for qualifications). The superintendent, in cooperation with the business manager, then selects the auditor. Mr. Brittain was quick to point out that you can’t do a competitive bid. It must be through the interview process and the district should choose one that best suits the needs of their particular district. Ours rotate through two year contracts and must have board approval.

• How does the auditor conduct the audit?

Our district initially sends any requested information that generally includes both general ledger and financial records. The auditor reviews the information and inputs it into their accounting system for analysis. At that point the auditor comes on site (usually for about a week) and reviews records. They randomly select files such as personnel folders, vendor records, etc. for review. At the conclusion of the onsite visit they return to their offices and develop a detailed summary audit report. It is due to TEA 120 days after the end of the fiscal (normally around January 28).

• What does the audit conclude about district financial procedures and actions?

If all affairs are in order, they will issue a summary statement basically stating that they didn’t find any material weaknesses. If there are paperwork issues that can be resolved, there is a possibility to correct. Unfortunately, if there is a material weakness, it is basically irresolvable at that particular point and will end up going to TEA.

• How are the results communicated?

Initially the auditors will meet with the audit committee which consists of the superintendent and three board members. Next they will have an exit interview with both the business manager and superintendent. It is at that point that they present the summary to the board for approval and signing off on at the January board meeting. Then it starts all over. J

Reflection

This was an exceptional assignment for me as this was one area that I was completely unfamiliar with. I have never played any role whatsoever in a district level audit so all the information was new to me. From time to time we hear issues arise in area districts concerning mismanagement of funds. I am fortunate to have never worked in any of these districts. For us, it has always been about the kids.