ASBO & GFOA Budget Presentation and CAFR Requirements 2007 TASBO 61 st Annual Conference

Welcome Jon Graswich, CPAChief Financial Officer DeAnne Hatfield Business Services Director Northwest Independent School District (817) (817)

Agenda Introduction Budget Presentation Comprehensive Annual Financial Report Summary Questions and Answers

The Financial Cycle The Financial Cycle starts with strategic planning and ends with the audited financial statements.

The Financial Cycle The seven steps of the Northwest ISD Financial Cycle are: Strategic Plan / Five-Year ForecastFall-January Budget PreparationFebruary - March Board Budget ReviewApril - May Budget AdoptionJune Tax Rate AdoptionJuly - August Financial & Investment ReportingJuly - June Audited Financial StatementsNovember

Association of School Business Officials International Meritorious Budget Award

The Meritorious Budget Awards Program (MBA) uses examples of the latest techniques from school business administrators to build your skills for developing, analyzing, and presenting your school system budget.

Texas Recipients AliefHouston AllenKlein Carrollton-Farmers BranchLaredo Conroe Lewisville DallasNorthwest Fort BendRockwall

Government Finance Officer’s Association Distinguished Budget Presentation Award

The Budget Awards Program is designed to encourage governments to prepare budget documents of the highest quality to meet the needs of decision-makers and citizens.

Texas Recipients AliefFort Bend AustinHouston Big SpringLaredo Carrollton-Farmers BranchLewisville Conroe North East Corpus ChristiNorthwest DallasUnited

What The Budget Document Is The budget document is a policy document, an operations guide, a financial plan, and a communications medium designed to meet the needs of decision-makers and citizens.

What The Budget Document Ain’t It is not a “magic” bullet.

What The Budget Document Ain’t It will not cause money to rain from the heavens.

The “Magic” Bullet is the Strategic Plan The Northwest Independent School District approach to coping with the combination of fast student growth in a restricted funding environment with increasing academic standards has been to ensure that the budget process is driven by the Strategic Plan. The Board of Trustees and Administration review the Strategic Plan. The Administration performs a detailed review of all revenues and expenditures. The focus is on aligning the allocation of resources, both personnel and financial, with the accomplishment of the goals and objectives which are directly linked to the plan as described in the budget document.

ASBO & GFOA Criteria Checklist Applicants rate their budget against the criteria using the checklist and identify any adjustments that can be incorporated into the final document. To receive these awards, a school entity must publish a budget document as a policy document, an operations guide, a financial plan, and a communications medium.

ASBO International’s Meritorious Budget Award

Criteria Checklist General Requirements Introductory Section Organizational Section Financial Section Informational Section

Government Finance Officer’s Association Distinguished Budget Presentation Award

Criteria Guide Policy Document Financial Plan Operations Guide Communication Device

ASBO Criteria Checklist General Requirements The General Requirements relate to the overall budget document but do not necessarily apply to a specific section of a document. They set criteria concerning the document cover page, the sectional division and table of contents, page numbering information not included in the budget document, response to previous review team comments, use of graphs and charts, and the technical preparation of the document.

ASBO Criteria Checklist Introductory Section Introduces the reader to the document as a whole. It highlights important information contained in the budget. Users rely on this section to get an overview. They want a quick overview – a snapshot of what they can expect to find in the rest of the document.

ASBO Criteria Checklist Introductory Section 1. A liftable executive summary 2. A copy of the MBA certificate (if awarded in the preceding year) 3. A listing of school board members and top level administrative personnel

Organizational Section Provides the context and framework within which the budget is developed and managed. The context for the budget is substantially predicated on the type and level of service to be provided to the students of the community. The framework also includes the District's organizational and financial structure as well as the controls that direct and regulate the development and administration of the budget.

1. Explanation of the school entity 2. Significant budget and financial policies 3. Organizational Chart 4. Statement of the mission 5. Major goals and objectives 6. The operating and capital budget development process 7. The budget administration and management process Criteria Checklist Organizational Section

Financial Section The heart of the school budget document. The budget financial schedules present the adopted budgets for the District compared with the results of past budget plans and with future projections.

1. Scope and format of budget presentations (i.e., schedules0 2. Use of the pyramid approach in the presentation of budgets 3. Complete information presented including fund balances, revenues, expenditures and other funding sources/uses 4. Inclusion of capital budgets and a list of major capital projects 5. Description of capital spending impacts on the operating budget 6. Current debt, legal debt limits and effects on current/future budgets Criteria Checklist Financial Section

School & Programs Section Provides the Mission Statements carried out by the school or program, objective methods of results by school or program, and includes the resources, both personnel and dollars, allocated to the school or program to carry out the stated mission.

School & Programs Section 1. ASBO - Optional. 2. GFOA - Required: Display by Organizational Units or Programs. Describe activities, services or functions carried out. Provide objective methods to measure progress toward accomplishing the government’s mission as well as specific unit program goals and objectives.

Informational Section Contains information on past and future budgets and factors influencing the proposed budget. Puts the adopted budget into context and it explains past budget decisions.

1. Revenue Sources, Assumptions and Trends 2. Values of Taxable Properties 3. Property Tax rates and Collections 4. Analysis of Tax Burden 5. Comparison of Revenues and Expenditures 6. Budget Forecasts Criteria Checklist Informational Section

7.Student Enrollment History and Forecasts 8.Personnel Resource Allocations 9.Bond Amortization Schedules 10.Performance Measurements 11.Other Useful Information 12.A Glossary of Terms Criteria Checklist Informational Section

ASBO Application Materials (1) Application Form (4) Transmittal Letter (4) Budget Document (4) Criteria Location Checklist (4) Responses to Last Year’s Comments (if applicable) (-) Fee ($350 - $900)

ASBO Application Deadline Submitted within 90 days of FINAL legal adoption date. Adoption processes may include several dates. Budget Adoption in June. Tax Rate Adoption in August.

GFOA Application Materials (5) Application Form (4) Transmittal Letter (4) Budget Document (5) Criteria Location Guide (5) Responses to Last Year’s Comments (If applicable) (-)Fees ($165 - $630)

GFOA Application Deadline Two options: Proposed budget Within 90 days of submission to governing body. Adopted budget Within 90 days of adoption.

What is a CAFR? The Comprehensive Annual Financial Report (CAFR) is a report that tells the financial story of the school system through narrative, financial statements, and chart/graphs. The CAFR not only gives the summary and detailed information for the school year being reported, but also includes information for the previous ten years.

ASBO International’s Certificate of Excellence in Financial Reporting

Certificate of Excellence in Financial Reporting The Certificate of Excellence in Financial Reporting (COE) Program reviews the accounting practices and reporting procedures used by school districts in their Comprehensive Annual Financial Reports (CAFR), and enhances the award winners' credibility among stakeholders.

2005 Texas Recipients Independent School Districts35 Educational Service Centers 2

Government Finance Officer’s Association Certificate of Achievement for Excellence in Financial Reporting

Certificate of Achievement for Excellence in Financial Reporting The Certificate Program, which was established in 1945, is designed to recognize and encourage excellence in financial reporting by state and local governments.

2005 Results Texas Recipients Independent School Districts50 Educational Service Centers 1

What is the mission of ASBO’s COE Program? To encourage and recognize excellence in the preparation and issuance of school system’s Comprehensive Annual Financial Reports.

What is the application deadline? School systems must submit their application to ASBO no later than six months after a school system’s fiscal year end. For example, Fiscal Year EndApplication Deadline June 30December 31 August 31February 28

What is the fee to participate in the program? The application fee is based on the school system’s total revenue, all funds. All school systems (regardless of ASBO International membership) may apply. Below is the fee information: Total Revenue, All Funds ASBO Member Under $1 Million$350 $1 to $5 Million$450 $5 to $10 Million$550 $10 to $25 Million$700 $25 to $50 Million$800 $50 to $100 Million$900 $100 to $250 Million$1,000

How long does the review process take? The process takes approximately 4-5 months. As part of each review, reviewer comments are provided back to the submitting school district to be used in preparation of subsequent CAFR’s.

What needs to be submitted to be considered for the program? The application materials include: One copy of the completed application form Three copies of the CAFR Three copies of the school system’s responses to last year’s comments (if applicable) Three copies of the Self-Evaluation Worksheet (Self-Evaluation worksheets are required for first time participants or if a school system did not apply to the program for the previous year.) Application Fee

What are the benefits/features of the program? All applicants receive constructive comments about their CAFR from trained accounting professionals. Those who receive the award also receive: A prestigious award plaque A printed award certificate to be used in the school system’s next CAFR Professional recognition in ASBO’s and ASBO affiliate publications Media recognition Strengthened budget planning and forecasting

What are the benefits/features of the program? The Certificate of Excellence in Financial Reporting Award is recognized by: Bond Rating Agencies Securities Analysts Underwriters Educational, teacher, and citizen groups Accounting Professionals

Self-Evaluation Worksheet The guidelines of the program, contained in the Self-Evaluation Worksheet provide a resource for school business officials and auditors to use when preparing a CAFR. Submitting the self-evaluation worksheet is optional for school systems that received the award for the prior fiscal year. New applicants, past conditional awards, and past denials are required to complete and submit three copies of the worksheet.

I have a technical question. Can ASBO help me? Yes, please contact Michelle Williams at 703/ or her at and she will put you in touch with the Certificate of Excellence in Financial Reporting Technical Consultant, Gary Heinfeld of Heinfeld & Meech Co., P.C.

My state doesn't require a CAFR. Can I still participate? Yes. In order to participate in the COE program, you will need to convert your state's required financial reporting format into the CAFR format. Please contact Michelle Williams at (703) for more information.

Why Should My School System Participate? Credibility: Participation validates a school system’s commitment to fiscal and financial integrity and enhances its credibility with the school board and community. Confidence: Receiving the Certificate of Excellence Award gives the superintendent and school board confidence about their school system and the business management staff. Savings: A CAFR complies with disclosure requirements by providing ninety percent of what is needed for credit evaluation.

SUMMARY

Implementation Board works with the Administration to develop goal / objective guiding the development of the budget document avoiding specific content. Goal: Northwest ISD will invest resources to ensure that students, parents, and the community receive optimal educational services. Objective: The information in the budget document and CAFR will meet the requirements of ASBO and GFOA.

Receiving the Award

Awards are granted for only one year. Notification and confidential comments. A personalized award plaque and certificate. Strongly recommend official Board presentation. Local Media news release

Questions and Answers

Workshop Concluded