5342 Course Reflection School Finance

Reflections from Course 5342, School Finance

This course has been the most Challenging of the three courses taken in this Superintendent School Leadership Internship.  This could not come at a better time for me.  I looked forward to this course because it’s the area that is not my strength.  With the challenge, lack of financial support facing school superintendents today, learning about major issues that impact the state funding is critical.

Week 1 focused on the historical aspects of school finance which gave a great perspective on pass court decisions, legislative actions, and Texas Education Agency rules, all of which connect our history to current finance issues. It was clear that operating school districts with fewer resources than needed was not a new concept in our state history.

Week 2 focused on students getting more familiar with district’s budget process and decision making.  It was here that we concentrated on Goal Driven Budgets.  The key here was that all stakeholders shared a common vision and that vision should reflect the goals of the Board of Trustees.

Week 3 focused on sources of Revenue for School District Budgets.  It was important that we understood the concepts of how a school district generates revenue and how to determine expenditures and understand the ethical procedures for receiving and expending funds. 

During week 4 we got the opportunity to explore major issues impacting expenditures and what superintendents needed to know about FIRST (Financial Integrity Rating System of Texas).  The Texas Education Agency has two accountability systems, AEIS and FIRST.  A great lesson learned here was that superintendents need to be concerned about district ratings by both AEIS and the FIRST system. 

Week 5 focused on the importance of educators adhering to the Texas Administrative Code and the Educators’ Code of Ethics.  School administrators are the leaders of their communities and a higher standard of conduct is expected of them.  Not living up to those standards pose a major ethical issue.

In looking at all five weeks, the lectures, interviews, readings, and the resources made it all connect.  I think this was a great layout for the course.  The use of our wiki groups and blogs gave us the opportunity to, collaborate with classmates, share ideas and opinions, and learn about their districts.  The interviews were right on target as I interviewed our Business manager.  It was hands on practical learning that was so relevant.

While reflecting upon the growth of my knowledge since beginning this course, I marked all of the Administrative competencies above as a “C”, except one, indicating that I feel competent enough to oversee each of the standards as they occur in my district.  I do not feel I could lead my district without experience people around me.  I think much of the superintendent’s role requires this leader to have an understanding of each of the School Administrative Competencies to survive in the position; however, in most medium and large districts, there are school district officials who will serve as experts to carry out the detailed functions of all the business-related functions.  I will continue to work towards gaining experience in these areas to ensure that I am successful on the Texas Superintendent’s certification exam as well as utilize my understanding for the benefit of my current position. 

Code of Ethics for School Leaders

Week 5, Assignment 1

Three examples from Section 1, Standards 1.1 – 1.13 and 2 examples from Standards 2.1 – 2.7 – a total of 5 examples of unethical conduct.

Standard 1.2 says that the educator shall not knowingly misappropriate, divert, or use monies, personnel, property. or equipment committed to his or her charge for personal gain or advantage.

Standard 1.5. says the educator shall neither accept nor offer gratuities, gifts, or favors that impair professional judgment or to obtain special advantage. This standard shall not restrict the acceptance of gifts or tokens offered and accepted openly from students, parents of students, or other persons or organizations in recognition or appreciation of service.

Standard 1.10. Says the educator shall be of good moral character and be worthy to instruct or supervise the youth of this state.

Standard 2.1. The educator shall not reveal confidential health or personnel information concerning colleagues unless disclosure serves lawful professional purposes or is required by law.

Standard 2.3. The educator shall adhere to written local school board policies and state and federal laws regarding the hiring, evaluation, and dismissal of personnel.

3 Three examples from Standards 1.1 – 1.13 of unethical conduct

1. Identify some examples of ethics’ violations based on the assigned standards (e.g., Standards 1.3, example: submitting false mileage reimbursement reports). Please provide 3 examples from Section 1, Standards 1.1 – 1.13 and 2 examples from Standards 2.1 – 2.7 – a total of 5 examples of unethical conduct. Be sure to try to identify ethical conflicts that focus on school funding or financial issues.

3 Three examples from Standards 1.1 – 1.13 of unethical conduct

(1)    An employee of the district had a fundraiser for their school club.  Students turned their money into the sponsor who did not give students a receipt (which is required).  As a result the majority of the money collected never was deposited into the school’s account.  The investigation resulted in over a $1,000 lost.  The sponsor used money for their own use.  The sponsor took money from the students.

(2)    Teachers serving on a textbook committee accepted expensive gifts from a particular textbook representative.  In return the teachers voted for that particular vendor to receive the bid for textbooks.   

(3)    Principal was arrested for soliciting the services of a prostitute.  It was also discovered that the principal and prostitute was involved in the purchase and use of a controlled substance.

Two examples from Standards 2.1 – 2.7 of unethical conduc 

(4)    Nurse on a high school campus revealed to another staff members that a teacher on staff had contacted a sexual transmitted disease (STD) to one other teacher.  This was a violation of confidentiality. 

(5)    Principal dismissal of a teacher because he felt that she was not a good teacher.  Principal did not have any written documentation and never met with the teacher during the school year to share his concern.  The principal waited to the end of the year and dismissed the teacher. 

2. What might happen to an administrator, teacher, student teacher or other educator who violates this standard – consider short and long-range consequences? Give short and long range consequences for 3 of the above ethical conflicts.

Example #1

Short Range consequences

Reimburse the school district and written documentation of the violation. Removal from sponsorship of the club.

Long Range consequences

Termination and file with SBOE

Example #2

Short Range consequences

Removal from the textbook committee and a reprimand

Long Range consequences

Termination and file with SBOE

Example #3

Short Range consequences

Reassignment from position and school

Long Range consequences

If convicted termination and file with SBOE

According to the state competencies for the superintendent he/she should be able to : “exhibit understanding and implement policies and procedures that promote district personnel compliance with The Code of Ethics and Standard Practices for Texas Educators”  as well as deal with all of these situations in a fair and ethical manner.   Additionally, “the superintendent should be able to monitor and address ethical issues impacting education as well as apply laws, policies, and procedures in a fair and reasonable manner”.  Any administrator who violates a TAC Code of Ethics standard risks termination.  A superintendent should be fully aware of each of these standards and increase employee knowledge of these standards to ensure compliance.  To make an error is part of human nature but, we can make the best decisions if we are fully aware of the established standards and how they relate to day-to-day professional conduct.

 

Interview with Business Manager for District

Week 4, Assignment 5

Interview with Business Manager on Financial Audits.  Below are the questions asked of the Business Manager:

1) How is the external auditor selected?

2) How does the auditor conduct the audit?

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

4) How are the results communicated?

The auditor’s final report has the following components:

Audit procedures used

The organization-wide audit encompasses the financial statements as required by GASB Statement No. 34 and the Texas Education Agency Financial Accountability System Resource Guide for the fiscal year being reviewed.  The audit is performed in accordance with generally accepted auditing standards and generally accepted government auditing standards contained in the Texas Education Agency Financial Accountability System Resource Guide.

The procedures used are to determine whether (1)  the financial statements present fairly the financial position, results of operations, and cash flows or changes in financial position in accordance with generally accepted accounting principles, and (2) whether the District has complied with laws and regulations for those transactions and events that may have a material effect on the financial statements.

The financial related audit will also include determining whether (1) financial reports and related items are fairly presented, (2) financial information is presented in accordance with established or stated criteria, and (3) the school district has adhered to specific financial compliance requirements.

The audit will also include obtaining an understanding of the school district's internal control processes and reporting any significant deficiencies or material weaknesses relating to the internal control system coming to the attention of the auditors.

As part of the audit of the financial statements, transactions and records pertaining to federal programs will be tested for material compliance with federal laws, rules, and regulations and all instances of noncompliance will be reported to the school district.

Items Reviewed

The auditors will review items such as,

(1) Check registers

(2) Legal costs to determine potential future liability from any legal action

(3) Procurement procedures, including bids and purchase order processes

(4) Federal notices of grant awards, monthly drawdowns, expenditure reports, program reports, and time and effort documentation

(5) Payment procedures ensuring all required approvals and documentation support payments processed

(6) Sources of federal, state and local revenue, with recalculations to ensure amounts are properly recorded or accrued

(7) Campus and district improvement plans

(8) Warehouse and student nutrition inventory procedures and balances

(9) General ledger account reconciliations, such as bank account reconciliations

(10) Technology system security and preparation of data in event of a loss of servers or power in district buildings

(11) Payroll checks, processes, and documentation of semi-monthly payroll

Finding of Audit

As auditors are reviewing processes, documents and procedures of the organization, recommendations or 'findings' will be noted and reviewed with management at the exit conference and then presented to the Board of Trustees and documented in the Single Audit Report.  These audit findings are noted to make the district aware of deadlines that were found to not be met during the year, procured that weren't followed, or internal control processes that were lacking that could leave the district vulnerable of theft or loss.  These findings are noted in the report in a section labeled Schedule of Findings and Questioned Costs.

Future Recommendations

In addition to the auditors communicating their findings, they must also include their recommendation on how the finding could be resolved in the future.  This information will also be found on the Schedule of Findings and Questioned Costs located in the Single Audit Report.

Understanding Presonnel Salaries in District Budgets

Week 4, Assignment 4 – Understanding Personnel Salaries in District Budgets

When meeting with CFO for our district, it was very clear to me the impact that personnel salaries have on district budgeting decisions.  We are experiencing less funding from the state compared with past years.  Because of decreased state funding, and the fact that personnel salaries comprise the largest expenditure in the maintenance and operations budget (85.5% of total expenditures), many districts throughout Texas are forced to eliminate teaching positions.  Many districts in Texas are not able to provide raises for their teachers.  Providing a 5% raise would cost almost half of the amount currently present in the fund balance.  Many districts, including our own, are dipping into fund balance to remain solvent in the face of decreased state funding, providing a 5% raise would be impossible.