School+Finance+Week+4

Part 1

The Financial Integrity Rating System of Texas, FIRST, involves giving school districts a rating of their financial status, which is an important component of the program that the District Superintendent needs to monitor and review. Especially if there are areas of concern indicated by a rating decrease from previous years. This rating is very important and similar to the AEIS rating which indicates to the Superintendent the success of the instructional component in the school district. The most important component of FIRST deals with the simple concept of district accountability. Districts are responsible for the financial management of the schools. FIRST provides a detailed study of district finances as well as maintains a history of those finances. The financial resources of the district directly relate to how the instructional program is structured. In most districts about 80-85% of the financial resources are utilized to pay the payroll. If the financial resources are not managed appropriately the district will not have sufficient funds for payroll and instructional needs. The FIRST rating gives the Superintendent information that he/she can use to determine problem areas and make adjustments to how the district manages money. Without FIRST a Superintendent relies on his own people and external auditors to determine areas that need to undergo change. The second important component of FIRST is the analysis that shows the Superintendent how well the district is managing their financial resources. The rating system communicates the quality of local management as well as the decision making processes that impact the allocation of financial resources. Through this report, the community gains a simpler understanding of the stability of the district’s financial standing as opposed to a lengthy audit report. This communication also allows a district and its constituents the ability to compare itself financially to districts of comparable size and demographics. FIRST assists the Superintendent by determine that checks and balances are set up for all of the district’s procedures. For example, you do not want the same person taking in money, counting it, and then depositing it because there is no accurate way to know if an error was made or if funds were distributed incorrectly. Multiple people need to handle these tasks. For example, a school district should have one person take in the money, another person count the money, and a third person take the money to the bank for the deposit. FIRST gives the district information concerning these tasks and they are added to the information an external auditor supplies when it analyzes financial operations each school year. The district also manages money that is not needed immediately and can gain income for the district. In addition, the fund balance should be placed in an institution that allows the district access and a good return on their money. Analyzing the procedures that a district uses for where a district puts their money and the return rate they are receiving should be of great interest to the Superintendent. The returns on the district’s monies are potential revenue that can be utilized by the district. The final important component is based upon what happens with the rating and analysis information reported by FIRST. It reflects the district’s ability to reach the instructional goals and objectives through properly allocated funds. A goal driven budget reflects the needs and important areas of the district’s stakeholders. A thorough evaluation of the FIRST data should determine if these needs were met. How the Superintendent implements needed adjustments is very important, especially when timely changes for critical needs are made. Any time you have a process that reviews and analyzes the procedures needed must be met with feedback. This feedback must be established so adjustments can be made to the process. If FIRST determines that an activity or process is incorrect or inefficient the Superintendent needs to meet with the district’s finance department and devise a different process that alleviates the problem. An example could be where they are depositing money is not giving the district enough return or charging too much for check writing. Other areas may include the long term effectiveness of the system which may be only partially computerized and needs to have a higher level of computerization or utilizing a different accounting package that gives more timely and accurate information. In conclusion, the FIRST process is devised to ensure that a School District is held accountable for their financial management of their schools. They also must show how their funds are allocated and how the needs of the campuses and students are met. Lastly, the budget must reflect how each school district plans to attain those goals and objectives to effectively educate all students. Reflection:

From looking at FIRST and how it interacts with AEIS and the rating systems, I understand how each part works together to ensure all school districts are working to educate all students. I have been able to see that this part looks more directly at the budget and how funds are allocated properly to ensure that the goals and objectives are being met. This activity has helped me understand how these processes work together to help the Superintendent understand how and if they are improving student success.

Part 2

The economy of scale concerns the ability to reduce infrastructure costs. Larger school districts have larger student populations at school sites when contrasted with smaller districts. District one has revenue of $10,529 per pupil contrasted to district two with $10,316. The difference is just over $200 in the favor of the small district. It is a result of State funding that district one receives because they have less than one-third of the taxable value per pupil. When the Total Operational Expenditures per pupil are determined, district two has moved ahead by just less than $300. This swing of about $500 is probably the result of the economy of scale in the favor of district two.

District two has 32,326 students spread across 45 schools contrasted with district one with 830 students in 3 schools. The district two schools average 718 students compared to district one at 277. District one probably has one school at each level (elementary, middle, and high school) whereas district two probably has four high schools, 3 program schools, 8 middle schools, and 30 elementary schools. The high schools could each have 2,500 students with a lead principal and 4 assistant principals and 4 counselors for a ratio of 9:2,500 (1:278). The one high school in district one probably has one principal and one counselor for a ratio of 2:217 (1:109). As a result the larger school district has only 39% of the school administrators compared to district one.

The number of teachers, custodians, office staff, and auxiliary staff are also reduced because they can serve more students in the larger schools. One thing that a smaller district can do to level the situation is to share personnel between campuses. Larger districts can share as well and have one Calculus teacher who teaches classes at two different high schools. Having more money because of the economy of scale allows districts to pay their employees more money. District two pays their teachers on average $10,000 more per year contrasted to district one. District two also has a much higher fund balance which could also be attributed to the economy of scale.

All in all, there are similarities and differences to each of the districts. Due to having a smaller district, the amount of funding is less than the larger district which is due to the reduced number of employees that the smaller district has. Also, the lower pay schedules for the smaller district play a vital part in the funding balance. The larger district has more revenue and is able to staff more employees. Due to the number of employees and number of operating expenses, the amount per student is lower than the smaller district. However, there are more resources available in the larger district. For example, it is easier for the larger district to employ intervention teachers due to the increased amount of funding. The smaller districts normally do not have the “fluff” positions that larger ones incur. All in all, in looking at these two districts, the smaller district has more money per student and receives a considerably lower yearly salary per teacher. Reflection:

For Part 2, I have learned that smaller districts may not have the positions that larger districts have because of funding, but that sometimes can lead to more money per student than larger districts have. Many times, larger districts pay more for their teachers and are able to have delegated responsibilities for their staff members. Paying staff more money helps with retention of school employees. This is also a benefit due to the expense that some districts incur with trying to attract teachers to work in their districts. I think there are pros and cons to being in a small district as well as being in a large district.

Part 3

In looking at staffing for schools, we must look at ways to ensure we are providing our students with teachers who are trained to deliver the instruction and that we are utilizing our needs effectively. The status quo is always difficult to overcome. Many districts who have gone through Strategic Planning to understand the concept of strategic abandonment of programs or tasks that are no longer needed but have stayed around “because we have always done it that way.” Businesses today survive by learning how to economize and that is due a large part to differentiated staffing. Schools by their structure and organization are slower to change.

<span style="color: #4f81bd; font-family: 'Arial','sans-serif'; font-size: 15px;">Differentiating staffing for schools is a great plan. This allows schools to assign teachers to other duties to best suit the needs of the financially strapped schools. This will however pose the reduction in staffing and allow districts to save lots of money. For example, in an intermediate school they hired a designated receptionist so other office personnel could get their work done without being interrupted by every incoming phone call or visitor to the school. The person they hired was a high school student that was in a Cooperative program. This student worked at the Intermediate after attending high school in the morning. Another example of differentiated staffing was performed at another school by hiring teachers with generalist certifications which permits them to teach multiple subjects. Two generalist teachers were hired who could teach all of the courses in the sixth grade curriculum. One had a background in both social studies and English language arts to this teacher taught two preps, ELA and Social Studies. The other teacher was a science major and had a minor in math. This teacher taught two subjects, Math and Science, to the students. This was done because the number of students in the grade level increased and the central office only allowed two additional teaching units. Utilizing differentiated staffing helps many school districts fill multiple positions with one teacher. This has become a benefit to many districts who are strapped financially because they can fill more than one position with one individual teacher.

<span style="color: #4f81bd; font-family: 'Arial','sans-serif'; font-size: 15px;">For differentiated staffing to occur, certifications are “key” when dealing with teachers at any grade level. Many years ago a teacher at the secondary level could teach one class in a discipline which they were not fully certified. This allowed campuses a more flexible schedule even if the students did not sometimes receive a quality education. Today, dealing with highly qualified teachers, it is more difficult to utilize this type of staffing at the higher grade levels. For example, a similar schedule is done at the high school that is fed by the intermediate. Upper level classes French 3 and 4 are combined as well as Art 4 and 5. These classes, because of their higher level, require less direct supervision and the teacher is more of a facilitator of the learning process.

<span style="color: #4f81bd; font-family: 'Arial','sans-serif'; font-size: 15px;">There are some negative impacts to this type of staffing because it will put more teaching preps on a teacher. Some teachers want to have one prep or subject to plan and prepare, but with this type of staffing, they may be responsible for multiple classes and being prepared to teach all of those classes can be difficult. This can also give that teacher more duties because it could essentially reduce the number of teachers that the campus would have to employ.

<span style="color: #4f81bd; font-family: 'Arial','sans-serif'; font-size: 15px;">Using this type of staffing does always seem to have more benefits due to the financial relief it gives to many districts as well as helping each district offer more classes because one teacher can teach that class if needed. Seeing many different ways to utilize current staff always seems to benefit the students because they are able to have more opportunities and classes if teachers can teach more than one subject. As an administrator and a future superintendent, we must look at every way possible to maximize our staff where students can benefit from the changes and modifications we make. <span style="color: #4f81bd; font-family: 'Arial','sans-serif'; font-size: 15px;">Reflection:

<span style="font-family: 'Arial','sans-serif'; font-size: 16px;">I have learned that utilizing the knowledge of all staff can maximize learning for all students. Teachers are trained to teach a variety of subjects and we must make sure we utilize all teachers in areas that are in need. Many teachers can teach multiple subjects but choose not to. If we look at our certifications, we can ensure all subjects are taught by teachers who are fully qualified to teach them. I can see the benefits to this type of staffing which can reduce the number of staff that you currently have and uste them effectively in all areas. There are also negatives to this, which can easily burn out a teacher or cause them more responsibilities than they currently have. This can result in a positive or negative end result.

<span style="font-family: 'Arial','sans-serif'; font-size: 16px;">Part 4

<span style="font-family: 'Arial','sans-serif';">In looking at the school district’s budget, I can see that personnel salaries are estimated around $16, 817,220.00. This accounts for about 81% of the projected expenses in my school district. If we raised salaries five percent, it would increase the estimated payroll expenses by 840,861 to a total of 17,658,081. The average teacher salary is a little lower in my school district than several surrounding areas. Although we pay a little less than other districts, we still are able to retain teachers and have little turnover each school year.

<span style="font-family: 'Arial','sans-serif';">There are many positive aspects of increasing salaries by five percent. Increasing salaries would increase staff morale as well as closing the gap in salaries compared to other districts. Although the increase would not get the pay scales equal, it would get them closer to other districts surrounding this area. This year, we did not receive any increase in salaries due to the economic situation and funding deficits. This has made many teachers and staff members question when the district is able to add different things. Staff would feel that they were appreciated and valued with increases. It is normal for the public to say the best way to stop overspending is not to increase salaries. Sometimes, that is good, but sometimes it is not. There are ways to reduce spending rather than take employee funds when things are increasing in price. Understand why the district decided against increasing salaries this year and it was due to the seeing the whole picture. If we reduce spending in salaries, we do not have to reduce the amount of spending in other areas, especially the critical area of instruction.

<span style="font-family: 'Arial','sans-serif'; font-size: 16px;">If we did receive the increase, this could result in a negative way due to cutting spending in our district in other areas. By reducing other areas, we may not have funding for instructional needs or professional development for our staff members. This reduction could affect even the number of staff that we currently have. For example, my district voted against raises so we did not have to cut staff members. We felt that keeping our staff would be overall better than cutting so we could get a raise. Giving staff a choice in the matter also helps them understand the larger picture so they are on board with any changes that occur.

<span style="font-family: 'Arial','sans-serif'; font-size: 16px;">Part 5

<span style="font-family: 'Calibri','sans-serif'; font-size: 15px;">In my district, the external auditor selection process is similar to many other districts as well as what was stated in the lecture. First, my district advertises for proposals and once they are submitted, the business office evaluates the proposals and determines which ones meet the expectations set forth legally and by the board. Next, interviews of the top three firms are completed and the committee selects their top choice of auditors. After the selection, they get contracts ready and the firm presents their contract to the Board members. The Board can accept this firm or they can ask for another firm if they do not agree with the choice.

<span style="font-family: 'Calibri','sans-serif'; font-size: 15px;">Once the auditor is chosen, they send all paperwork to the school district and determine when they will come to begin the audit. The auditors are given all information they request during their visit and then they develop a report that is in compliance with all laws. The district informs all staff that they must cooperate and answer questions that come up during the audit. Staff must also be able to provide documentation of anything that the auditors feel they need.

<span style="font-family: 'Calibri','sans-serif'; font-size: 15px;">Once the audit is complete, the auditors give the district information they found during the audit. This information contains charts and tables that help the school district understand the information in the audit. If there are discrepancies in any of the documents that the district has versus the audit reports, the auditors will relay this information in the audit document. This audit will give the district vital information as to whether their process is working correctly and whether changes need to be made in the way the information is processed.

<span style="font-family: 'Calibri','sans-serif'; font-size: 15px;">The results are communicated through a report, but also the firm will send a person to the school board meeting to answer any questions that the board may have. This also helps them understand areas that need improving and look at different strategies that will help them improve this process. The report is also submitted to TEA as well as the Board of Education.

<span style="font-family: 'Arial','sans-serif';">Reflection:

<span style="font-family: 'Arial','sans-serif'; font-size: 15px;">I have learned how the audit process works and how my school district handles the audit process. I understand the selection process as well as the obligation of the district according to the law. This process is designed to improve the district as well as see where the weak areas are so they can be resolved. I know there seems to be a lot of stress involved when school districts talk about audits, but it seems that if things are in check, then there is nothing to worry about and the audit will end up being a positive experience instead of something else.