School+Finance+Week+4

Part 1

In examining FIRST in school finance I feel that the three most important components are accountability, communication, and projection of financial solvency. The requirements of FIRST create financial accountability for every district and its superintendent. The examination of each financial component and its reporting of findings help to ensure that monies are appropriately budgeted and spent in those areas needed to fulfill local and state goals/requirements. The communication of the findings to “parents and taxpayers” (19 TAC 109.1005. Reporting) reinforces that accountability. This also allows for the participation of all stakeholders and may help develop the mutual trust of community stakeholders and district personnel. Finally, and important within today’s financial environment, is the projection of financial solvency (19 TAC 10901101. Financial Solvency Review). We are in some of our most challenging economic times and must not only maintain financial stability but also be aware of the future trends in funding while predicting its impact on our districts. Our money collected today will fund our next biennium. The financial projections are bleak and we must be prepared so that we may provide our students with the best possible education.

Annette:

I agree with Reese as stated below:

The three most important components of the Financial Integrity Rating System of Texas (FIRST) is the purpose, reporting, and financial solvency review. The purpose (19 TAC 109.1005) is for districts to be held financial accountable for the financial resources and operational expenses. The reporting (109.1101) of the ratings to the parents and taxpayers brings mutual trust and integrity to the school district. FIRST consists of 22 indicators than range from fund balance to teacher-student ratio in a format that can easily be communicated to parents, community and other stakeholders. The financial solvency review (TAC 109.1101) is necessary for district to maintain and anticipate the future financial situation of the district.

Part 2


 * Total Revenue Per Pupil **

District 1 $ 10,529 (830 students = 276 students per campus)

District 2 $ 10,316 (32,326 students = 718 students per campus)


 * Total Operational Expenditures per pupil **

District 1 $ 8,611

District 2 $ 8,908


 * Average teacher salary **

District 1 $ 39,771

District 2 $ 50,307

In examining the differences in total revenue per pupil, total operational expenditures per pupil, and the average teacher salary, one may clearly see the affect of economy of scale. Although receiving over two hundred dollars more per student in revenue than the larger district, the smaller district spends nearly three hundred dollars less per student. With only 276 students per campus, average, the smaller district must pay more to provide the basic services required in education. You would expect the smaller district to offer fewer programs but seems to have a strong career/tech. program by number of teachers (8) when considering enrollment. This program expectation may be more reflected by a reduction in extra-curricular opportunities.

The examination of average teacher salary suggests even more support of economy of scale. As a result of other operating costs teacher salaries are nearly $11,000 less than those in the larger districts.

Part 3

I am very hesitant to embrace a business approach such as differentiated staffing as an application to the education of our children. The school business is completely unique as a “business” in that we are not compensated for “retail value” of the product but rather funded “at cost”. We do not chose or sift/preselect our ingredients for our final product, graduates. As I understand its application to education instruction, differentiation of staffing would reduce the number of highly qualified teachers to take advantage of more affordable paraprofessionals. While we must adhere to financial restraints, I feel that our teachers are the most valuable input resources in the formation of our product and are the last area for reduction.

Within the operations of the school district may be areas that may benefit from such a business-like approach. The district’s maintenance, custodial, transportation, and food service departments would likely benefit from differentiated staffing. Another use in these areas might be the use of these departments cooperatively with other districts. This may be even more effective for smaller districts to offset the economy of scale effect.

Part 4

CISD currently spends 82% of our budget on salaries. This approximate 80-20 ratio of personnel to other operating expenses is interesting when considering some of our surrounding industry. In discussing this with a friend of mine who is in management in a local refinery, he stated that their ratio was the mirror opposite (20-80). Their product does not require the supervision, instruction, etc that our product requires and thus we must have a greater number of employees per volume of product. As stated in Part three we are funded at cost rather than receiving retail for our product and thus making it even more challenging to adequately compensate teachers. In today’s financial climate there is little room for a salary increase. At CISD, a district of about 3700 students, we lost approximately $4.6 million in funding this year. As a result we have 117 fewer employees in 2011-2012 than 2010-2011. In addition, all stipends tied to content area incentives have been eliminated. With the projected funding in the next biennium we expect little or no salary increases. Although not impacting us at this time, due to the increase in teacher availability, we expect that this will make competing for quality teachers more difficult as more teachers retire and fewer enter the profession.

Part 5

<span style="font-family: 'Arial','sans-serif';">CISD follows the TASBO model for external auditing. The district accepts proposals from interested firms and then reviews each proposal and checks references to refine the selection process to three firms. Interviews of each of the three firms are then conducted to select which firm will conduct the audit.

<span style="font-family: 'Arial','sans-serif';">The selected firm will then work with the district throughout the year conducting scheduled visits to review requested documents and interviews. A final report is prepared and presented to the Board of Trustees.

<span style="font-family: 'Arial','sans-serif'; font-size: 16px;">CISD has employed the same CFO for 40+ years and during our current superintendent’s tenure has never encountered a major problem or concern. The board and superintendent have great faith in our CFO and are troubled by her recent retirement and the thought of replacing her.