Texas Education Agency Great Expectations for New School Finance - - PowerPoint PPT Presentation
Office of School Finance Update Texas Education Agency Great Expectations for New School Finance Legislation 22 nd Annual Public School Finance Conference Education Service Center X June 11, 2015 Office of School Finance 1 Texas Education
Great Expectations for New School Finance Legislation 22nd Annual Public School Finance Conference Education Service Center X June 11, 2015
Office of School Finance Texas Education Agency 1
Office of School Finance Texas Education Agency 2
independent auditor to conduct an independent audit of its financial statements and provide an opinion on its annual financial report.
– Be associated with a certified public accountancy (CPA) firm that has a current valid license issued by the Texas State Board of Public Accountancy (TSBPA) – Be a CPA with a current valid license issued by the TSBPA as required under the Texas Education Code, §44.008; and – Adhere to the generally accepted auditing standards (GAAS), adopted by the American Institute of CPAs (AICPA), as amended, and the generally accepted government auditing standards (GAGAS), adopted by the US Government Accountability Office, as amended.
EXTERNAL AUDITORS
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– Be a member of the AICPA Governmental Audit Quality Center (GAQC); – Adhere to GAQC's membership requirements; and – Collectively have the knowledge, skills, and experience to be competent for the audit being conducted, including thorough knowledge of the government auditing requirements and:
EXTERNAL AUDITORS
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UPDATES TO THE TEXAS ADMINISTRATIVE CODE (TAC)
compliance reviews an audit firm's working papers and finds that the firm or the quality of the work does not meet the required standards, the division may require the district or
EXTERNAL AUDITORS
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– Special Education – Compensatory Education – Bilingual Education – Career and Technology Education – Gifted and Talented – High School
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– 3 consecutive years of financial data reported in the FSP (revenue) and PEIMS systems (expenditures) – Findings in the Annual Financial Report (AFR) – Findings in a Legislative Budget Board Management and Performance Review – Concerns raised by program areas or complaints
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– Desk or on-site review (in-depth review) triggered by risk assessment – Audit Follow-Up and Financial Management Reviews – Student Attendance Compliance Reviews – transaction testing for accuracy in coding, allowability, and timeliness. – AFR reviews – CPA workpaper reviews
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– Compliance with direct expenditure requirements – Appropriate expenditures on direct services
to fund a teacher’s entire salary
– Compliance with the requirement to prioritize state compensatory education spending on students who failed end-of-course exams
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– Letter directing the district or charter to take required actions. – Requirement to submit corrective action plans – Potential loss of state funds
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data of 2014 (30 points)
in of passing standard)
http://tea.texas.gov/About_TEA/Laws_and_Rules/Commissioner_Rules_(TAC) /Proposed_Commissioner_of_Education_Rules/
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– Was the complete annual financial report (AFR) and ISD or charter school financial data submitted to TEA within 30 days of the November 27 or January 28 deadline depending
30 or August 31, respectively? – Critical Indicator – Source: AFR
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– Was there an unmodified opinion in the AFR on the financial statements as a whole? The American Institute of Certified Public Accountants (AICPA) defines unmodified opinion. The external independent auditor determines if there was an unmodified opinion – Critical Indicator – Source: AFR
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– Was the ISD or charter school in compliance with the payment terms of all debt agreements at fiscal year end? – Critical Indicator – Source: AFR
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– ISD - Was the total unrestricted net asset balance (Net of the accretion of interest for capital appreciation bonds) in the governmental activities column in the Statement of Net Assets greater than zero?
more, then the district passes this indicator).
– Charter School - Was the total net asset balance in the Statement of Financial Position for the charter school greater than zero?
– Critical Indicator – Source: AFR and PEIMS
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– Was the ISD or charter school administrative cost ratio equal to or less than the threshold ratio? – 10 point scale – Source: AFR and FSP
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ISD ADA Threshold 10 8 6 4 2 10,000 0.046 0.053 0.061 0.069 0.076 5,000 0.05 0.066 0.083 0.099 0.116 1,000 0.068 0.079 0.091 0.102 0.126 500 0.079 0.093 0.107 0.121 0.135 Less than 500 0.108 0.139 0.169 0.199 0.23 Sparse 0.153 0.191 0.229 0.268 0.306 CHARTER ADA Threshold 10 8 6 4 2 1,000 0.087 0.142 0.191 0.239 0.288 500 0.090 0.152 0.214 0.276 0.330 0.094 0.163 0.238 0.314 0.390
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– Did the comparison of Public Education Information Management System (PEIMS) data to like information in the district’s AFR result in an aggregate variance of less than 3 percent of all expenditures per fund type? – 0 or 10 points – Source: AFR and PEIMS
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– Was the AFR free of any instance(s) of material weaknesses in internal controls over financial reporting and compliance for local, state, or federal funds? The AICPA defines material
there are any instances of material weakness. – 0 or 10 points – Source: AFR
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– Make timely payments of payroll taxes to TRS, TWC, IRS
– Days cash on hand, General Fund
– Current assets to current liabilities
– Long-term liability to long-term asset ratio
– Revenues >= expenses (General Fund) or 60 days cash on hand
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– Debt service coverage
– Student to total staff ratio
reduction in staff) or lose 10 points
– FSP adjustment based on a financial hardship
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and hold a public meeting to discuss the Annual Financial Management Report within two months of the final FIRST
– The FIRST rating and how it performed on each indicator for the current and previous year – The superintendent’s contract or other written documentation to report the total compensation paid to the superintendent unless the superintendent’s contract is posted on the school’s website – A summary schedule of expenditures paid to and on behalf of the superintendent and each board member
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– A summary schedule for the fiscal year of the total dollar amount by the executive officers and board members of gifts that had an economic value of $250 or more in the aggregate in the fiscal year (only gifts from outside entity) – A summary schedule for the fiscal year of the dollar amount by board member for the aggregate amount of business transactions with the school district or open-enrollment charter school, – Any other information the board of trustees determines to be useful – Retained for three years – Applies to both ISDs and Charters
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– Bid Form for Depository Services
– Proposal Form for Depository Services
district and make it available to the Texas Education Agency upon request.
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– Depository Contract for Funds of Independent School Districts under the Texas Education Code, Chapter 45, Subchapter G, School District Depositories – Texas School Depository Surety Bond Form
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– Submit only electronically (similar to AFRs). – Submit 1 copy of the executed contract. – Submit the Vendor Direct Deposit Authorization form, if applicable. – Submit Texas Surety Bond form, if applicable. – TEA signature line removed from the contract. – TEA will not approve or return contracts. – Bid/RFP forms will not be submitted to TEA. – Districts are responsible for retaining these documents and submitting to TEA if requested.
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analysis, subject to change!
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2014-2015 2015-2016 2016-2017 Basic Allotment $5,040 $5,140 $5,140 Equalized Wealth Level (Tier I) $504,000 $514,000 $514,000 Guaranteed Yield (Austin Pennies) $61.86 $74.28 $77.53 Guaranteed Yield (Copper Pennies) $31.95 $31.95 $31.95 Equalized Wealth Level (Copper Pennies) $319,500 $319,500 $319,500
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– $23.75 million in each year of the biennium – Will provide for $250 per ADA in a new campus, up to appropriations limit – Since the program was not funded last year, no campuses are currently in second year status – Districts must submit an online application by July 15 to be eligible for funding – NIFA module is now open!
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– Appropriation of $55.5 million in fiscal year 2017 – Will provide for a new round of IFA – IFA is a program to provide property poor school districts assistance in repaying bonded debt on instructional facilities – IFA is not the same thing as NIFA! – Information coming soon regarding how to apply
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– $15 million in each year of the biennium – Funded on the basis of eligible prekindergarten ADA – In the past, this has been worth about $148 per pre-k ADA
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– Homestead Exemption Hold-Harmless
exemption
receiving popular vote
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– Maintenance and operations tax rate conversion (fractional funding)
that would allow districts with compressed tax rates below $1.00 to convert copper pennies to basic allotment pennies
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1, 2020
state aid will be recalculated as if the exemption went into effect in 2014
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– Reduce the local share and increase the state share of Tier I – Reduce the local share and increase the state share of Tier II – Reduce the local share and increase the state share of the Existing Debt Allotment (EDA) and IFA – Reduce recapture
– Increase ASATR for those districts that receive it
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– without exemption, – under 2015-2016 school finance formulas, – excluding any increased maintenance and operations tax rates.
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Sinking revenue that would have been available
– Without the exemption, – Using 2015-2016 eligible debt
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have compressed tax rates below $1.00 to increase compressed tax rates.
– Districts must have a current tax rate greater than their original compressed tax rate plus $0.06; – For the 2015-2016 and 2016-2017 school years, districts must request the conversion
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– tax effort will be shifted out of the zone of Tier II that is equalized at $31.95 per penny of tax effort to Tier 1 – tax effort will be shifted out of the zone of recapture governed by the equalized wealth level of $319,500 and to the zone governed by the equalized wealth level of $514,000 – For districts that receive ASATR, tax effort will be shifted under the ASATR umbrella, out of Tier 2
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$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 Tier I Austin Copper Office of School Finance Texas Education Agency 45
Without Conversion With Conversion 2005 tax rate $1.35 $1.35 Current Adopted Rate 1.04 1.04 Compressed tax rate 90 98 Pennies allocated to Austin Yield 6 6 Pennies allocated to Copper Yield 8
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– Districts that do not receive ASATR should benefit from tax rate conversion because low yield pennies are shifted to Tier I, which has a higher yield. – Districts that receive ASATR may not benefit since Tier 2 is outside the ASATR umbrella and so revenue is shifted from outside to within the ASATR portion of the formula.
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Without Conversion With Conversion Difference Compressed Tax Rate .8614 1.00 Adopted M&O Tax Rate $1.17 $1.17 District Basic Allotment $4,426 $5,140 Total Tier I Allotment $107,175,373 $124,003,449 Local Fund Assignment ($58,422,277) ($67,830,326) Tier I State Aid $48,753,096 $56,173,103 $7,420,007 Total Tier II Entitlement $29,562,927 $18,996,995 Total Tier II Local Share ($21,990,598) ($12,107,717) Tier II State Aid $7,572,329 $6,889,278
ASATR $5,004,636
Total State Aid $61,330,061 $63,062,381 $1,732,320
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your district’s decision as well as how to evaluate the impact of the decision
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– Up to $1,500 per student available for districts that implement a high quality prekindergarten program; – Appropriation of $59 million in each year of the biennium is provided in HB 1
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– Allows for distribution of Instructional Materials Allotment funds in the first year of the biennium – Allows for temporary transfer of Foundation School Program funds to cover cash flow deficit
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– Allows charter schools with enrollment growth of more than 10 percent from prior year to request FSP payment acceleration
– Allows use of two or four hour rule for Optional Flexible School Day program – Allows expanded use of Optional Flexible School Day program without application process––will still require local board approval – Allows use of state compensatory education funds for childcare expenses for at-risk students
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– Allows locally funded program for provision of free or reduced-priced breakfast; – Allows alternative reporting for compensatory education on one or more campuses in a district; – Requires a detailed plan for use of compensatory education funds if a virtual campus intends to make use of this provision
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year are posted. These SOFs incorporate:
– Transportation module data if the district submitted! – Staff salary data if the district submitted! – EYS student counts, and – Final tax collection data from the J-1 schedule.
2014–2015.
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– $27 million in settle-up payments, and – $45 million in settle-up adjustments.
the 2013–2014 school year have had the estimate for this allotment set to zero.
next 2013–2014 update and restore the allotment.
saved or returned).
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– Current tax rates from Comptroller’s Self Report, and – Updated state compensatory education counts (with two months of CEP data for those districts participating).
– Updated ADA estimates (DPE running 27,800 lower than LPE), and – Updated tax collections (DPE running $548 million higher than LPE).
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tax collections due August 31.
route services reports due August 3.
data due August 31 for inclusion in Near Final SOF.
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– Revised basic allotment, equalized wealth level, guaranteed yield – Revised ASF rate (estimated at $284) – Student counts submitted through pupil projections – 2014 preliminary values – Maintenance and operations tax collections increased by 4.56 percent from 2014 budget
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to homestead exemption SOFs will be revised to include:
– Revised property values and tax collections, and – Calculation of homestead exemption hold-harmless
adjustments
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Lisa Dawn-Fisher lisa.dawn-fisher@tea.texas.gov (512) 463-9179 Amanda Brownson amanda.brownson@tea.texas.gov (512) 463-0986
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