INTERIM REPORTS:TARGETING CHANGE

Presented by the San Bernardino County Superintendent of Schools-

Business Advisory Services

Teri Kelly, Cynna Hinkle, Jesus Holguin, Belinda Washington

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ARE YOU

READY

FOR

THIS??

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AGENDA• Why do Interim Reports? What am I certifying?• What’s New this Year?• More Changes to the Criteria and Standards• Creating Official DAT File and emailing it to BAS• What DO you need to send to BAS?

– Assumptions & Checklist

• How DO you complete the forms and Where does the data come from?– Form AI, Form RLI, Data Extracts-HP to C drive, Form01I,

Other Funds, Form Cash, Form MYPI, TRC

LUNCH BREAK (1 hour)

• Detailed Cash Flow Projections-Hands On• Detailed Multiyear Financial Projections-Hands On

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Why do Interim Reports?• PURPOSE

– To state the district’s ability to meet its financial obligations for the current and two subsequent fiscal years.

– To evaluate ongoing budget issues and to make adjustments to the operating budget to reflect actual activity.

• Required by E.C. 42130-42131• Charter Schools EC 47604.33

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What Does My Board Certify and What Does it Mean?

NEW! Detailed Governing Board Certification: Positive, Qualified or Negative Choices based on:

• Positive Ending Fund and Cash Balances in all funds• Meet State Reserve % for Economic Uncertainties in

Unrestricted Fund 01 and Fund 17• Collective Bargaining and Debt Disclosures• Key Fiscal Indicators• Multiyear Financial Projections

– District’s ability to meet its ongoing financial obligations in the current and TWO subsequent fiscal years

Pulls in data automatically from new C&S Fiscal indicators

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Ok, so What Else is New?• District must IMPORT in OFFICIAL BUDGET DAT File from SACS2006

software (DAT file should be saved in the OFFICIAL folder with SACS2006)

• FORM AI: Column 1 is now REQUIRED for all districts-Pulls CY P-2 ADA into C&S (3.B.)

• REVISED FUND FORMS: No longer allows for manual input directly into fund forms-Must Import. Pulls in detailed information similar to Adopted Budget.

• FORM MYPI: Line 1b pulls in Combined District, County and Charter ADA for CY and SFYs into C&S (1.A.) (More reasons to start using this format)

• FORM MYPI: Line F2 District ADA, pulls in from Form AI, P2 ADA column 1 and pulls into C&S (3.B. Column 1) to determine State Reserve minimum %

• FORM MYPI: Added components of ending fund balance section similar to Adopted Budget-make sure to complete for 2 Subsequent FYs, including designated reserves.

• FORM ROP: No longer allows for manual input, except for Capital Outlay and Equipment replacement detail-All data must be imported.

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New!! Criteria and Standards• Similar to format of Adopted Budget C&S

– Looks mostly at CY and 2 SFYs data– Adds in Cash Flow review component– Reviews DM and RRMA to ensure still budgeted sufficiently– Several links to ADA data, some include County ADA and Charter ADA

and compares to Enrollment/CBEDS projections– Reviews changes in data from Adopted Budget to Projected Interim

Report data• Must explain any variances above state standards• Must do Import of Adopted Budget SACS2006 dat file to enter required

budget data.• Does pull some 2005-06 Unaudited Actuals data as using same software.

Be sure you have downloaded the new SACS2006ALL files that include Interim sections.

• Be sure you are using Interim software on same computer that you updated the 2005-06 UA data.

– Let’s pull out the Sample C&S and walk through the components reqd.

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Where do I get the Interim Software?

• We have sent out an email providing the CDE link to all districts/ROPs. It is the same SACS2006ALL software used to complete the UAs, but the interim portion had been disabled by CDE pending testing of new components.

• The link to the Interim Software version of the SACS2006ALL software is located on CDE website: http://www.cde.ca.gov/fg/sf/fr/sacs2006allinterim.asp

• Charter school interim reporting forms and district review forms can be located on our website: http://www.sbcss.k12.ca.us/busServe/bas_charter.php

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What are my Timelines?

April 16January 15COE notification letter to districts/CDE (within 75 days of close of reporting period)

No later than March 16

No later than December 15

Submission of ALL reports to SBCSS-BAS (45 days after close of reporting period), this includes Charter School Reports reviewed by sponsor district

March 16December 15Board Approval Date, no later than:Send early to BAS, cert can come later

January 31

7/1-1/31/07

October 31

7/1-10/31/06

Financial Data Period ending For SACS download means date range :

2ND INTERIM1ST INTERIME.C. 42130-42131

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OK, Once again, What do I need to send BAS?• Exported Official Interim DAT file to BAS

– How to attach a DAT file to an email (Handout)– Send to Jesus Holguin (that’s a g, not a Q)

• Original Signed Certification page– After C&S is completed and the Met/Not Mets are explained and pulled

forward into Certification– Include contact person who can answer questions regarding data included

• All Fund forms – Unrestricted/Restricted/Combined General Ledger and all other district

Funds, including detail pages

• All Supplemental Forms in software (Form AI, RLI, MYPI, CASH, ROP (where applicable)), including TRCs for Projected, Actuals, Board

• Detailed Assumptions - Subsequent 2 FY ADA/enrollment, RL Calculations, FTEs/Staffing changes, one time adjustments, etc.– If you think we might question something, include backup or a narrative to

explain or we WILL CALL.– We provide a detailed Assumptions summary page (See Handout)

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What Role does BAS serve?• COE Reviews Interim Report documents (generally during the

Christmas holidays…or Spring Break for 2nd interims)– Fund Forms– Criteria and Standards– ADA projections compared to Enrollment projections– RL projections– Cash Flow projections– Multi-year Financial Projections– TRCs

• Report status of district certifications to State Controller and CDE

• Notify districts of actions taken/concerns• We appreciate it when district send us their completed

forms prior to board approval and followup with signed certification pages– Generally no changes are made after board reviews

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What if I have a Qualified or Negative Certification?

• Districts filing Qualified or Negative Certifications must submit 2 additional copies of all reports/narratives/assumptions-copies are sent to CDE – BAS will work with district to determine level of COE

involvement in securing a fiscal plan of action to address why the Qualified or Negative certification was necessary and has the option of invoking other actions (EC 42131(b), EC 42127.6(a))

• Third Interim reports are required of all districts which file Qualified or Negative 2nd Interim certifications or were reclassified as Qualified or Negative by the COE (EC 42131(e))

• Third Interims are due on or before June 1, including projections to June 30 (EC 42128)

• COEs are required to report to the State and District Governing Board, a summary of all actions taken in regards to Qualified or Negative Certifications at year end (AB 139).

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How do I complete these forms?• FORM AI ATTENDANCE DATA

– Record ADA information from:• Column 1: Estimated P-2 Report ADA (Where you expect

ADA to be at the P-2 reporting period) NEW CHANGE!!!!• Column A: Original Budget -Pulls in data automatically from

Form A in Adopted Budget when import is done• Column B: Board Approved Operating Budget (any

adjustment made to ADA, if RL was adjusted due to State Budget Adoption or start of school)

• Column C: Projected Year Totals (Declining districts: Use Prior Year P-2 ADA (PY Guarantee); All Other districts: Use Est. P-2 ADA for CY-should be same as Column 1)

– Record Supplemental Hours & Community Day School Additional Hours

• Use current hours to date for projected totals and adjust for estimates for rest of the year

– Record Charter School ADA & Instructional hours• Should match Charter School Interim Report data

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Estimated Actual P2 ADA for Current

Year

Decline Districts: Use PY P-

2 ADA; Others: Use CY P-2 ADA est.-see

Column 1

Pulls in Data from

Adopted Budget

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Line 21a. Is for Resident Charter ADA for USD only-include in Form RL ADA line 5.b.

Line 21b. Is for Resident/Non Resident Charter ADA for Elem/HS and Non Resident for USD

Line 22 is for ALL Charter districts only who are funded thru RL (None in SB County).

Don’t forget to include supplemental hourly programs-project based on Annual totals-should correspond to Form RL funding projected

Don’t forget to include projected CDS additional hours-and transfer portion of RL in RS 2430 for UA Form DAY @ Yearend, along with regular RL ADA included in General Ed ADA lines above.

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What about the RL Calculation?• Form RLI is a summary of the target components

used in calculating the district state aid or Revenue Limit.– Original Budget-Should pull in automatically from Form

RL in Adopted budget after SACS2006 budget import.– Board Approved Operating Budget-Use data

components that match your current RL projected amount in the Operating budget-If no changes made since Adopted, use same data

– Projected Year Totals-Use data based on how you expect to end this fiscal year for the various components: ADA, UI, PERS Reduction, taxes, hourly programs, etc.

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What are those Data ID #?• The state has available a RL calculation that ties into

your automated Attendance report process• Revenue Software can be obtained at:

http://www.cde.ca.gov/fg/sf/rl/– Can import in the Attendance data file from the Attendance

software to do own RL calc and pick up the key components for input into the Form RLI using the DATA ID#s.

• Our office can also supply you with an updated RL calculation, just supply us with the pertinent data elements: ADA, UI, PERS Reduction, Supplemental Hours, Meals for Needy, etc.– Contact Patty Trevino or Jesus Holguin in BAS 433-4630– We have a data collection form that can be used

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REVENUE LIMIT DATA

2006-07 DATA COLLECTION SCHEDULE

___________________School DistrictPeriod: 1st Interim or 2nd Interim

2006-07

Form K-12 District Revenue Limits EDP No.

Estimates Only

for Interim

Purposes

D-5. Gain/Loss from Interdistrict Attendance Agreement (D-5) 045D-14a. 2006-07 Unemployment Insurance Expenditures (all funds) (D-14a) 956D-16. Reduction for Excess ROC/P Reserves (D-16) 060D-16.5 Reduction for Longer Day/Year Penalty (D-16.5) 160D-20c. Community Redevelopment Funds (D-20c) 125Schedule B - Average Daily Attendance

A-1 Completed Form A1 including all K-12 ADA, County ADA and hourly data

A-2a. 2005-06 ADA attributable to the attendance of pupils in a charter school (A-2a) 71of the district in 2006-07 who attended a non-charter school of the district in 2005-06 (P-2)

A-2b 2005-06 P2 ADA attributable to district resident pupils attending a non-charter school in 2006-07.. Report ADA only if all of the following apply: (A-2b) 731) The school operated as a non-charter school of the district in any year prior to 2005-062) The school operated as a charter school of the district in 2005-063) The school operates as a non-charter school of the district in 2006-07

A-2d Gain or Loss of ADA due to a 2006-07 Reorg. or Transfer of Territory (A-2d) 042A-2e ADA Adj. for Change in Status of Necessary Small School in 2006-07 (A-2e) 044Schedule E- NEW Necessary Small Continuation High School

F. Increase in Revenue Limit for New Necessary Small Continuation High (F) 58Schedule G - Meals for Needy Pupils

C. 2006-07 Pupil Participation for Meals for Needy Pupils (C) 364Schedule H - Reduction for PERS

A. 2006-07 Salaries for Employees Covered by PERS (all funds) (A-1) 2006-07 Salaries Included Above Paid for Block Grant Charter Schools (A-2) Net Salaries for Employees Covered by PERS (A-1) less (A-2) (A) 400

B-1. Positions Supported Totally by Federal Funds (B-1) 410B-2. Positions Supported by Funds Pursuant to E.C. 54203 (B-2) 420B-3. Positions Supported from Other Excludable Sources (B-3) 430

(Not to exceed $274,243, equal to $25,000/2006-07 PERS rate of .09116)

SAMPLE FORMAT

Key Areas

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Why do I need to update the RL?• The data elements you used at Adopted Budget were

your best guestimates at that time, BUT now you have more real/actual data that may increase or decrease that estimate:– Salaries subject to PERS Reduction (check with payroll

for all funds) 13.02% less 9.124%(Pers)=3.896% x 85%(15% buyout)=3.316%

PERS reduction w/Buyout– Meals for Needy (check with Food Services on monthly meal

reimbursements filed)– Unemployment Insurance adjustments (check your payrolls for

all funds-remember rate went down this year)– County ADA updates (also update on Form AI)– Supplemental/Summer School hours-have actuals to date that

can be projected out to end of FY (also update on Form A1)• Be sure to continue to deficit Gr 2-6 Remedial/Low Star 22.66%

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Total Revenue Limit ADA should balance to Form A, Line 7 – Line 8

Inflation Increase comes from State Cola % applied to state wide averages, not each district’s unique BRL.

All data ties to State’s PASR software ID numbers not State Funding exhibit

references!

Meals for Needy is based on pupil participation pursuant to Monthly Meal Count reports (Form CNFS 71-5), obtain copies of monthly reports. Rate based on PY rate updated by COLA. Only applicable to approx 14 districts in our county. No new districts can apply.

Equalization adjustment can be listed under Line 3 All Oth Adjs

RL ADA comes from Form AI, lines 7-8+21.a.

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Property Taxes should reflect most current J-

29B Property Tax estimate from County

Auditor and should equal objects 8021-8089 in

budget

Charter School In Lieu Taxes should match object code 7280

Hourly programs should be updated to reflect hrs

on Form AI. Several programs are lumped together for reporting

purposes.

Total should equal amount imported for object 8011 in Form 01I for all report periods listed above.

UI should match total UI budgeted in all funds less historic base for your district-if negative, use zero

Pers reduction should include PERS buyback adjustment

Line 33 Old Sch D, Gr K-12 cap

Line 34 Old Sch P, Gr 7-12 uncap

Line 35 Old Sch J *Gr 2-6 cap(deficit), 2-9 uncap

Don’t forget to include any RDA taxes that are applicable to RL (Generally 43.9% Object 8047)

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Which Fund Forms do I complete?• All districts are required to complete the Fund 01I form

– Unrestricted/Restricted and Combined must be submitted

• Districts should also review the Other District Funds and submit applicable Fund Forms with Interim Submission– These fund forms are now brought into the

SACS2006ALL software as part of the extract process and can easily be sent to us as part of the package

• Be sure to review these Other Fund forms, however, to ensure all ending fund balances are POSITIVE.

– At Adopted budget, sometimes these Other funds are overstated on the beginning balances and when the Asset and Liability Roll is done with UAs, it creates a negative ending balance in the CY Operating Budget that needs to be adjusted.

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How do I get the fund data into the software?

• Information is imported into SACS2006ALL software through a file extraction process on the FIN or MIS financial systems.– SRININ application sets up data to be extracted

– 1st Interim parameters 07/01/2006-10/31/2006– 2nd Interim parameters 07/01/2006-01/31/2007

– If this extract is run after 10/31/06 or the 1/31/07 cutoff, all “pended” and recently posted budget transfers (BTs) will appear in Column D of Fund 01I which is correct

• Please DO NOT use other parameter dates after these end dates.• If you need something posted prior to these cutoff dates-GET

the batches into our office a minimum of 3 days prior to the cutoff date. Your JET mail doesn’t always get to our office the same day you send it out, especially if your pick up is late in the day

• DO NOT expect to FAX batches to our office. We do NOT accept faxes for budget or journal transactions.

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Range for 2nd Interim:

From date: 07012006

To date: 01312007

Use YOUR district’s CDS #

Don’t use more than 1 fund number to include or exclude. Mainly used to

exclude Fund 09 for districts sponsoring

charters

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What do all these columns mean?• Fund Forms

– Column A-Original Budget (Adopted, 7/1)– Column B-Board Approved Operating Budget (Current

working budget as of 10/31 which may include adjustments for UA carryovers and final State Adopted Budget revisions)

– Column C-Actuals to Date (current revenues and expenditures actually received/expended as of 10/31)

– Column D-Projected Year Totals (District’s projection of updated revenues/expenditures based on ADA changes from Adopted Budget; updated staffing ratios; updated supply ratios; new categorical funding or carryovers; deleted program funding, etc.-District needs assumptions to substantiate adjustments being made)

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Board approved Revision/

State Budget 45 day

adj

Actual Activity

As of 10/31/06

Projected to 6/30/07

Adopted Budget

as of 7/1

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How do I know what to Project?• Projected Year Totals

– Districts should carefully review all resources/all funds to ensure expenditures are supported by current state/federal/local revenues, appropriations or carryovers.

– Districts should review staffing at school sites to ensure CSR coverage based on current ADA projections and salary adjustments to reflect actual staffing to date in previously vacant positions.

– Any new construction or grants requiring district matching funds should be reviewed.

– Debt should be carefully reviewed to ensure district has budgeted appropriately based on CY debt schedules.

– Review actual activity to date to ensure expenditures are sufficiently budgeted in utilities and other services (I.e. Selpa expenditures-Xpot, Facilities, etc. as applicable)

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The Money is in the Details..• Beginning Fund Balance, Line F.1.a.

– Column A must reflect the district’s estimated beginning fund balance from the Adopted Budget.

– Column B must reflect the district’s estimated beginning fund balance PLUS any increases or decreases from the Unaudited Actuals ending balances roll into the current fiscal year. Object 9792 and Object 9791 combined.

– For 2nd Interim, Audit Adjustments should be posted and reflected in line F.1b. Object 9793 and Restatements in Object 9795.

• Get your BT batches into our office prior to January 31, 2007 to establish these audit adjustments EARLY!

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Suggestion: Keep Restricted Categorical EFB in Legally

Restricted 9740 Object or 9780, not 9790 for board presentation

purposes

9770 + 9790 Unrestricted ONLY MUST equal State Minimum

Reserves % of total expenditures + Uses + Transfers Out

RECOMMENDATION=Put State % in 9770 and keep updated as all expenditures are increased

Reserves for Revolving Cash, Stores and PE must equal current

Asset balances (keep these Reserves Updated to match asset at

reporting periods)

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TIME FOR A BREAK?

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I have Cash, why do I need to do a Cash Flow?

Or the old comment, I have checks in my checkbook so I must have Money! But is it sufficient………or even true??

• Determines whether or not the District MAY need to borrow funds during the current fiscal year only through:– TRANS (Tax Revenue Anticipation Note) Generally outside financing– CA (Constitutional Advance) Borrowing from San Bernardino County

Supervisors– Other District Funds (Temporary only and other restrictions apply)

• Projections for remaining months are used to assist a district in determining months when cash balances may be lower and expenditures may need to be scheduled to be paid in later time frames, if possible.

• Projections assist the district in scheduling debt repayment schedules for peak revenue periods (tax distributions-Late December-Late April).

• Aids district in determining whether categorical funding is being received timely, or if Unrestricted General Fund is fronting revenues, reducing potential interest earnings.

• NO CASH = NO VENDOR WARRANTS WILL BE SENT TO DISTRICT

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Okay, so What does a Cash Flow need to include?

• Districts may use the Form CASH or submit an equivalent spreadsheet that contains ALL the same data elements– Beginning Cash (ensure July matches to ending June 06)– Monthly Cash balances– Major Revenue/Sources and Expenditures/Uses lines– Prior Year Accruals/Monthly activity– Current Year Estimated Accruals column (used to

reconcile Cash activity back to Projected Budget, if not actually received or expended, generally would be accrued at yearend)

– Actual activity through Interim reporting period reconciled back to Financial ledgers

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What can I use to assist me?• Review prior year actual cash distributions to

determine historic percentages of tax distributions per month or state aid distributions in relation to total revenues received.– If you finished off your Cash flow for last year you

can determine % per month that can be used in CY

– Check for current year cash distribution estimates (generally posted on CDE website)

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Other Form CASH suggestions• Project expenditures for remaining months

based on actual planned distributions.– Talk to your Accts Payable Dept

• Review debt schedules for payment cycles. • Review maintenance contracts for annual payment cycles-negotiate

with vendor if payment hits at low cash cycle– Talk to your Payroll Dept

• Review payroll for whether H/W premiums are paid monthly or quarterly.

• Review payroll for when stipends are paid out, year end or periodically throughout the year.

– Talk to your Program/Categorical/Technical Staff• Find out about large purchases of Equipment/Textbooks and work

together to schedule an optimal time when cash is high• Find out when conferences are scheduled that may involve large

purchases/travel costs

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How do I figure out the Accrual Column?

• Use accrual column to ensure district has adjusted cash for known state funding deferrals.– June state aid payment received in July

• 2006 payment in CY July under Receivables line (if z’d out E/R)• 2007 payment should be reflected in RL line, Accrual column

• Use accrual column to record final June salary/benefits paid out in July and accrued automatically.

• Review CY accruals to determine % of revenues not generally received historically during the year, but earned– Generally you won’t worry about Deferred Revenues for CY as budget is

anticipating full cash receipts. Deferred Revenues don’t reduce cash, it just is an accounting entry to change to the next FY.

– Review CY payables to determine % of expenditures not generally paid out historically during the year, record in accrual column to balance back to projected budget if anticipating categorical expenses to match revenues.

3636

Must reconcile with FCR 290 Object 9110 as of month end for

each month

1st=through Oct

2nd= through Jan

7/ 1 Beginning Cash-9110

in

out

SACS2006ALL

3737

Reconcile to Proj Yr Budget

June state aid deferral

Final Ending Cash-9110

TRANS/CA are Other Receipts

Suspense Acct balances are

Other/Non-Expend

Anticipated 2007 Accruals

These are 2006 Accruals in 9XXX

objects

2006-07SACS2006ALL

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What about the Future?• Districts are required to submit multiyear

(current and two subsequent fiscal years) projections for their General Fund. – Which have been reviewed by the District

Governing Board as part of the Interim Certification process.

• The FORM MYPI must be submitted in Unrestricted, Restricted and Combined formats per state instruction manual.– We are now REQUIRING that if you do not use the

state MYPI form, your spreadsheet has this breakdown, along with a detail of the RL calculation and ADA/Enrollment used

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What do I need to know about MYPs?• The most meaningful MYP is one that :

– Includes PY Unaudited Actuals & CY agreeing with financial system as starting/reference point for future year comparisons

– Includes % difference columns between fiscal years

– Includes detailed assumptions regarding projections

– Is constantly shared with Board, cabinet & unions– Meets ongoing fiscal needs!!!

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What are some tips for MYPs?• Revenue Limit components, including ADA are to be input

on the Unrestricted report.– Have supporting backup calculations for your revenue

limit components, don’t just apply the state COLA to the current year calculations as several components don’t receive COLA adjs (Meals for Needy, UI, PERS Reduction, etc.)

• Break down ADA for District, County, Charter components, any changes to Hourly programs in future years

– Restricted Revenue Limit transfer to Special Education should be reflected on the Restricted MYP I on line A.1.f. as a positive amount and on line A.1.f. of the Unrestricted MYP I as a negative amount.

• This also applies to Community Day School transfers to RS 2430

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What else should I look for?• Unrestricted fund contributions to Restricted categorical

programs (Objects 8980) should be reflected on line A.5. As a negative on the Unrestricted Form and a positive on the Restricted form, with a combined total of zero on the Combined form (for example: Transportation encroachment, Special Ed encroachment, etc.)– NOTE: If you find a total exists on the combined form, review

the separate Restricted/Unrestricted pages to ensure you have input correct data

• If ADA increases, we expect to see CE salaries increasing, including Benefit costs– If changing class sizes, indicate in narrative or assumptions– Or if changing CSR options. Indicate in narrative or assumptions

4242

If ADA increasing, Growth in CE salaries should be equivalent

This is where your contributions to Restricted programs would be input as negative amts in Unrestricted, positive in Restricted, Combined = ZERO

Step/col, Growth positions should be noted in future years consistent with ADA projections

RL trf to CDS or SE, negative in Unrestricted

, positive in Restricted

4343

Don’t forget to include step/column for categorical positions

These areas need to offset to Unrestricted forms. Check

often as revisions are made to balance

4444

MUST RECONCILE TO REVENUE LIMIT TOTAL CALCULATIONS FOR ALL YEARS!Provide copies of detailed calculations

Contributions should net to ZERO

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FORM MYP I EFB Components• District must manually complete page 2 of the Unrestricted

MYP I which lists the Available Reserves (Must also include components if using district spreadsheet):– Object 9770 Designated for Economic Uncertainties=State Reserve

%– Object 9790 Unappropriated Reserves– Both of these reserves must be POSITIVE!

• On the Restricted MYP I– ENDING FUND BALANCE MUST BE EITHER ZERO

OR POSITIVE• If you encounter a negative ending balance in the

subsequent fiscal years, the district must make a decision to reduce expenditures OR increase contributions from Unrestricted GF to cover additional anticipated encroachment. DO NOT LEAVE AS A NEGATIVE ENDING FUND BALANCE!

4646

Ending Fund balances must be POSITIVE for both Restricted & Unrestricted Forms!!

Reserves input here, pull into

available reserves

Assumptions can be listed here or in Board Narrative or on our COE

assumptions Form

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What other areas do I need to review on MYPI?

• On the Combined MYP I, there is an additional Recommended RESERVES section F. (page 2)– NEW: Special Ed pass through exclusion for districts

serving as AU of Selpa– Need to Input District ADA on line F.2. which populates

into the C&S 3.B. Column 1 Est. P-2 ADA• This then triggers the State Reserve % required on lines #3.d.-g.• This is also how the two Subsequent FY data gets into the C&S

– Review carefully line F.3 h., if NO, district is not meeting the minimum State reserve levels and needs to indicate a Qualified or possibly Negative certification and provide our office with a fiscal plan to bring back Positive!

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WARNING On MYPI• NOTE: If you just open and save MYPI, it thinks

you have completed the form and will lock out the manual entry in the C&S 3.B. Column 1– If you are using your own spreadsheet that mimics the

MYPI data, you may need to open Form MYPI and input F.2. District ADA data for subsequent two fiscal years

– This ADA is the CY District ADA plus Charter ADA (Resident and Non-Resident listed on Line 22 of Form AI)

• Please review MYPI, as this may become a REQUIRED form for MYP in future software due to the links CDE is making between this form and the C&S.

4949

Requires Manual Input of ADA. This pulls into C&S 3.B. Column 1

If NO, provide a Fiscal Recovery Plan document showing how district will increase Reserves in CY and 2 SFYs

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FORM MYP (Alternative)• Districts can use another form of MYP

spreadsheet ONLY IF all elements are included:– ADA used for Revenue limit calculations-all 3 yrs.– Detail of Revenue limit components (can be on a

separate spreadsheet linked to MYP)-all 3 yrs.– Revenues/Sources and Expenditures/Uses by Major

object classification-all 3 yrs. (Unrestricted, Restricted & Combined)

• Breakdown of amount of salary increase attributed to Step/Column and staffing adjustments-can be listed out in ASSUMPTION summary, if not, use separate lines on spreadsheet.

– Beginning Balance• Reconciles with Prior Year Ending balances for CY &

each subsequent fiscal year.• Audit Adjustment/Restatements broken out-Current Yr.

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FORM MYP (Alternative)• Ending Balance

– Including the following required Components• Designated Reserves for Revolving Cash, Stores

and Prepaid Expenditures Objects 971X-all 3 yrs.

• State Reserve for Economic Uncertainties Object 9770 meets Criteria and Standards %-all 3 yrs.

• Restricted Designations in Ending balance for categorical/Restricted programs, Object 9780 or 9740-all 3 yrs.

• Unappropriated Reserves Object 9790-all 3 yrs.• All reserve components MUST BE POSITIVE

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What Factors went into your MYP?• Districts must provide our office with a listing of

Assumptions used in the Projected Year Totals and the MYP– Attachment B-1 is provided as a tool– District can use other formats as long as all pertinent

data from Attachment B-1 is included• COLA projected % for revenues• Salary Step/Column increases or Projected Staffing Changes• Benefit Cap Increases or if not capped, projected increases• One time and Ongoing increases in Supplies, Services and

Equipment-Can also explain in C&S if over state variance.• Additional or increased Debt Payments-if not listed in C&S

Multiyear commitments section

– Send us all board narratives, it helps us understand better what your plan of action is.

Ring, Ring,

Hi, it’s County

Schools!

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How do I know if I have covered everything?

• Handout has some questions you should be able to answer after completing Interim Report and MYP

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What is a TRC and what do I do with it?

• Technical Review Checklists = TRC– Run for Operating, Projected, Actuals

• This will assist you in finding any SACS coding problems to fix prior to YEAR END.

• Fully explain any warning exceptions and FIX any Fatal errors PRIOR TO submitting to our office.

– All WARNING errors that CAN be corrected, MUST be corrected and not just explained.

– Pretty much the only WARNING error that can be explained are negative entries resulting from prior year accrual adjustments, all other must be fixed.

– Run the TRC before taking the reports to your governing Board in the event you have to make a correction that will affect the outcome of the reports by object code.

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What if I already fixed an error?• In the event, the correction was made after the interim

date cutoffs of 10/31 or 1/31– Please note in your explanation, the date and batch number of

the correction fixing the error.– If a fatal error and cannot put in electronic explanation-just write

on printed TRC sent to us,the above information.• Do not change date of SACS extract to pick up the corrected batch-

this will distort other information we have to validate from the financial system for data integrity.

• Remember that the codes listed in the TRC are SACS rollup codes and may not be the same codes as in the Financial system (ie. RS codes for Fund 30/35 sub funds roll up to 1 RS code in SACS)– Call us if you are having a lot of trouble finding what is causing

the TRC error.

5656

Run TRC for Board Approved, Projected & Actuals to Date only

(print all and send with other funds/supplementals/C&S)

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This section is where you will scroll down to find unexplained TRC errors that need explanations.

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More TRCs were added..• CDE has upgraded the technical checks to include some

that were not included in prior releases. So review carefully.

• New Fatals– C&S explanations for all “Not met” and Supplemental info item

“Yes” responses & “Yes/No” responses for Fiscal indicators• Be COMPLETE

• New WARNINGS:– Object 8998 only with specified resources– Object 8995 balances to zero by fund– Fund 67 Excess Designations (if designations higher than EFB)

• Warnings changed to Fatals:– Goal x Function– PY EFB = CY BFB Restricted & Charters– Special Ed Goal

• FULL LISTING INCLUDED IN HANDOUT MATERIALS

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What does BAS need to do once we send in our data?

– SBCSS Technical Reviews – our office has a series of additional technical checks performed to validate data provided.

• Using your Assumptions provided and Financial System checks– Advisors will review and communicate any concerns to

the district staff via Formal letters to CBO, Supt, Board President

• All letters are first FAXED to the CBO for review prior to finalizing in order to validate key data elements, not to necessarily change wording

• Emails/phone calls may also be made to check on minor concerns.

– Please have District Staff, who are involved in this process, available after the cutoff dates 12/15 and 3/15 in order for our staff to get answers to any questions that may arise.

» This is why early submission can be helpful to everyone!

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ARE YOU READY TO ENJOY THE EXPERIENCE

61

LUNCH BREAKThe Afternoon Session is geared to

looking at the Cash Flow and MYP in more detail & reviewing your own unique district

formats.

Thank YOU!!

If you are not returning, please leave completed evaluations by the back door.

62

Can you show me exactly how to do a Cash Flow?

How?

What?

Why?

When?

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Let’s Start with……Why?• Here are some reasons why a cash flow is

important: It…– Summarizes monthly cash receipts and disbursement

activities which can be used as a planning tool in making payments to vendors and investments

– Identifies the timeliness of receipts– Identifies monthly cash needs and the possibility of the

need to apply for temporary loans– Can assist in monitoring cash solvency– Is an Indicator of strong fiscal management practices– Is a Good follow-up tool to track receipt and payment

of prior year accruals

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I have a Budget, why track CASH?

• Major Differences: Budget vs Cash Flow– Accruals

• The Budget is developed based on the modified basis of accounting. This method combines the cash basis of accounting with the accrual basis.

• A cash flow is a projection of actual cash activity. It does not incorporate accruals, so they must be excluded in the monthly projections, except for the collection of and payment of prior year accruals.

• However a reconciliation between cash and budget is a good tool to use to ensure your budget really is on track with actual spending patterns.

65

OK, I did it. Now What?• Revision/Monitoring

– Like the budget, a good cash flow needs to be monitored and revised as new information is received and actual activity is recorded.

– Monitoring the estimated cash flow is also a good indicator of a delay in receipt of state or federal funds that can be followed up on by staff.

– Emphasis needs to be given to the major revenues and expenditures and timing of the receipts/payments

• Don’t spend a lot of time on the small projections• Thought should be given to the payment schedules for stipends;

10, 11 and 12 month salary contracts; peak sub usage; health benefit payments; construction projects

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HOW do I begin and WHEN do I start?• July 1, Beginning Balance per County audited

records• Actuals to date through Interim Reporting Periods

(Oct 31 and Jan 31)• Reconciliation done monthly back to General

Ledger/Financial Reports-Object 9110• Projections for future months based on projected

activity-not just equal installments of projected budget– You don’t spend the budget equally each month, except

perhaps salary and benefits to some degree

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What about some details?• REVENUES

– State Aid distributed E.C. 14041• Advance-Total based on CDE adjustments to Prior Year data

through January 2007– % generally 6% July, 12% August, 8% Sept-Jan

– Check with Grace for your district’s % distribution

• P-1 Adjustments-State aid adjusted for P-1 ADA and data collection adjustments – paid February through May 2007

– % generally 1/6 of the difference between new calculation and advance previously paid with addl 1/6 in Feb.

• P-2 Adjustments-State aid adjusted for P-2 ADA and data collection adjustments – balance of new calculation less amounts previously paid through May (June adjustment paid in July-State deferral E.C. 14041.5)

• Annual-Part of Prior Year adjustments funded the following January 2008 through May 2008 equally

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More Revenue Details• Special Purpose Apportionment (Pupil

Transportation, EIA, no longer includes SIP):– 10% Advance - distributed Sept to Nov 2006– 10% of certified amount plus adjustment to

correct for Sept – Nov distributions – paid in Dec 2006

– 10% of certified amount paid January to May 2007

– 10% or final certified amount for June 2007, actually paid in July 2008 due to E.C. 14041.5

• PY June paid in July 2007-don’t forget to include, probably in Accts Receivables line

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Other Revenues• County Property Taxes

– Generally Secured distributed by County in late December and late April equally

– Unsecured comes throughout the year– Supplemental and Penalties/Interest

comes in late July/August– Review Prior year historical % for best

estimates– Generally Jesus prepares a summary for

the prior year that can be used for current estimates

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CASH FLOW PROJECTIONS• Other State/Federal revenues

– Check CDE website for Cash flow worksheet– Review Prior Year ledgers for distribution dates– Lottery revenues paid quarterly based on PY P-

2 ADA-adjusted to Actual annual in first quarter of following year

• Local Revenues– AB602 Special Ed revenues based on same

distribution % as State Aid– County Pool interest paid quarterly-see SBCSS

website for historic %

71

What about expenditures?– Staffing

• Timing of regular payrolls– Deferred payrolls affect cash when paid– 10, 11 or 12 month positions

• Substitutes-Vacant positions• Stipends-when are they paid qtrly, monthly, annually?

– Benefits• Generally Health premiums are paid out monthly over 12 months

but could be collected based on 10 or 11 month pay cycles– This is what causes balances in the suspense accounts– Also the payment of UI collected each payroll, isn’t actually paid until

Qtrly

– Supplies, Services and Equipment• Check Purchase Orders for Multi year contracts• Work with program staff on when peak ordering will occur for

textbooks, etc. generally summer prior to school starting• Maintenance agreements-check annual contracts• New construction needs

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How do I determine accruals?• The Projected Budget column is helpful in

determining anticipated accruals and in determining remaining months activity based on prior year historic activity

• Check accruals column to ensure state deferrals for state aid and other categoricals are included as not paid until July 07.

• Final June salaries for Certificated, not paid until July 1st, 2007-should also be an accrual, not shown as paid in June

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More on Accruals….• Prior year accruals- AR and AP lines

– Good way to monthly track payment of established payables and receipt of established receivables

• Clear out by February • State Aid accrual to Annual adjustment

– Post Audit Adjustments and clear out– Check all PY accruals are Z’d out

» Investigate discrepancies EARLY• Projected accruals (COLUMN)

– Validate state deferrals for June not included in cash receipts for June

• Reconcile totals back to projected budget

74

How do I reconcile CASH? RUN FCR 290 (FCMOFI)

Run each month separately up to last complete month end prior to Interim cutoff

75

This would be the Total Expenditures for July, Pick up Subtotals by Major Object code ranges for each line of Cashflow

76

Pick up Revenues by Major Object code

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This is the July beginning Cash

This is the net change in Cash for July (Revenues less expenditures, adjusted for suspense accts/accruals

This is the ending July Cash to reconcile back to

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This activity is recorded on the Accts Payable line along with any DUE TOs, Deferred Revenues

Suspense Acct activity is recorded under Other Disbursements, just as shown in this report

79

Here is total July Revenues, list on cash flow by major object series

Accts Receivables Activity is recorded on AR line as Positive amount.

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This is July column completed based on FCR 290

Reconciles back to 9110 object balance-July

81

Here is including August-Note several Revenue items were actually ER accruals, now Z’d out

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Total column needs to reconcile back to PROJECTED BUDGET

Accruals column reflects items budgeted but expected not to receive or pay before June 30th, 2007

These are accruals set up last year and being recd and paid this year, needs to balance to Revised Budget column in total for all Receivables and Payables, including Due Tos and Due Froms, Def Revenue categories

Suspense accts and Out of State Sales Tax needs to balance to ZERO in Total column as generally paid or accrued at yearend.

83

MULTIYEAR PROJECTIONS

“Long Range Planning does not deal with future decisions, but with the future of present decisions “

-the Late Peter Drucker

84

What do I need to know about MYPs?

Multiyear Budget Projecting is challenging because of the external variables which must be incorporated into the document in order to maintain its creditability and viability.

There is no “one” perfect model to use as there are such diverse differences between districts due to size, staffing, assumptions

There are however certain variables that should be looked at in any model.

85

What are MYPs good for?• Justifications

– Determining District Solvency• Allowing districts to determine if under various

conditions, revenues will cover expenditures for the number of years in the projection

• E.C. requirement for budget/interim Board Certifications (E.C. 42127)

– Negotiation strategies• To test the effect of changes in salary and fringe

benefit packages on future budgets and the impact on the future years before discussion at the bargaining table.

• To analyze the compounding effect of salary negotiations and fringe benefit package increases on future years.

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MULTIYEAR PROJECTIONS• Justifications:

– Staffing needs• Anticipating costs of various

enrollment assumptions and effect.

on staffing needs in future years.• Determining ongoing full year costs in future

years of adding new staff midyear.

– Identification of potential deficits• Potential deficits may occur as a result of various

policies and practices that are being used or are being proposed.

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What Data goes into a MYP?• Base Year Information (Prior Year UA)-

allows projections to be related to known and actual information

• Enrollment & ADA – drives the budget in both revenue calculations and staffing and supply expenditures.

• Consider Dropout Rates• Feeder District Data for USD and HSD• Historic Trends• Changing Housing Developments• District Birth Rate Trends-Declining or Growing• Interdistrict Transfers

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What drives the MYP?• Statutory Cola

– Revenue Limit & Adult Ed• Deficits

– Categoricals • Deferrals• Deficits-state appropriations limits

• Staffing– Staffing formulas

• Enrollment projections• Class sizes

– Positions not related to enrollment• One time needs

– Salary Schedule movement/Step& column• Retirements

– Union Contracts• Longevity or other Stipends

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Other Things to Consider…• Categorical programs-Federal or State

• Continued Ongoing funding or carryovers• Changes in funding (SIP now part of Block Grant)• District commitment to fully fund-Encroachment

– Special Ed– Transportation

• Federal changes due to Census / Rebenching

• Local• Sale of equipment, buildings, etc.• County Pooled interest-relates to cash availability• Selpa districts-AB602 funding

formulas/deficits/chargebacks

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What about Expenditures?• Expenditures

– Related to enrollment – Supplies/Equipment– New Textbook Adoptions-State requirements– Services – link to Consumer Price Index– Staffing Needs-Travel/conferences

• Staff development needs

– Utilities-new sites, additional portables, state energy costs

– Special circumstances-new roof, weather conditions

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This column will fill in from Form 01I Compare % across SFYs

Be sure to pickup correct data for each line in RL in

Future Years-Refer to Form

RLI

Data is input in Unrestricted & Restricted tabs, then combined in final tab

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The starting point for each future year is where you ended up in the prior year

Generally COLA is only completed if BU have settled, use Line d. for staffing adjustments

Be aware of 1X only costs in CY, being carried forward into Future FYs

Generally cost of Utilities and Services increase each year based on CPI or other %

= =

93

ANY MORE QUESTIONS??

• Please let us know what you liked and didn’t like in our presentation

• Let us know if you need any further assistance from BAS staff

94Please leave completed evaluations on the table!

THANK YOU FOR COMING!