FY18 Mid-Year School Financial Review January 17, 2018 Taylor Harvie, County Administrator Carla Cave, CPA, County Finance Director Becky Boswell, MBA, Schools Accounting Manager

Breakdown of FY18 Budgeted Operating Revenues and Expenses Move this slide to just behind a budget slide. New Page #5

Review of Prior 5 Years School Spending Fiscal Year Avg Daily Membership – obtained from DOE website Audited Operating Expenditures – obtained from County annual audit reports $ Increase Over Prior Year % Increase Over Prior Year Cost per Student 2017 1739 $18,117,289 $1,372,864 8.20% $10,418 2016 1764 $16,744,425 $481,509 2.96% $9,492 2015 1754 $16,262,916 ($45,156) (0.28%) $9,272 2014 1751 $16,308,072 $1,451,203 9.77% $9,314 2013 1746 $14,856,869 n/a $8,509

Put first page of Midkiff letter in front of this slide Put first page of Midkiff letter in front of this slide. It will show date decisions were made that had to be recommended by Central Office and approved by School Board. Add second page after this. with Health insurance decision spelled out. Put it in a red box too.

Put front page of MOU in front of this slide Put front page of MOU in front of this slide. Not to show anything but what this page is. Tied ot together but won’t spent 15 seconds on it. Add last page od document with SB signitures. Don’t want this to look like it was forced. WON’T SPEND 10 SECONDS ON IT.

Timeline of County’s Transition to School Accounting 08.25.17 – MOU in place which states School Board must eliminate positions of AP Clerk and Payroll Clerk (and leave Finance Director position unfilled). Those two employees to become temporary County employees for 30 days and report to County Administrator. MOU also states Board of Supervisors will hire a School Finance Director and two additional accounting staff. 10.01.17 – County hires Schools Accounting Technician to process payroll and accounts payable checks. 11.01.17 – County hires Schools Accounting Manager to oversee revenue collections, correctly record expenditures into system, and reconcile monthly with County Finance Director. 12.01.17 – Schools Accounting Manager provides first report of school revenue and expenditures. 01.10.18 – County Administrator and finance team has determined that School Expenditures are tracking to exceed the appropriated budget for the second year in a row.

Assumptions Upon Which This Analysis is Based Reports as of 12.31.17 are accurate All budgeted revenues will be received Annual revenues (including local contribution from County) will equal annual expenditures The Cafeteria Fund will not operate at a loss and cause Operating Funds to cover the difference Amount to be reimbursed to the County for the two School Accounting personnel salaries and benefits is $93,858.

FY18 Operating Expenses To-Date July 2017 FY17 Aug 2017 Sept 2017 Total Payroll $878,432 851,886 $1,730,318 *reflected in FY17 audit report Accounts Payable $22,196 18,028 48,059 $88,283 FY18 Oct 2017 Nov 2017 Dec 2017 Monthly Average $272,076 1,056,490 1,252,459 1,220,599 1,202,327 1,227,710 $6,231,661 $1,225,774 (Sept-Dec) $307,894 196,611 191,513 446,362 218,640 201,584 $1,562,604 $260,434 (July-Dec) Totals $1,480,598 $2,123,015 $1,492,031 $1,666,961 $1,420,967 $1,429,294 $7,794,265 (agrees to YTD financial reports) $1,486,208

Monthly Non-Payroll Expenditure Trend – Year-To-Date and Prior Four Years Budget Year - First Half Budget Year – Second Half 2014 July – Dec Total = $1,927,977 2014 Jan – June Total = $2,222,131 2015 July – Dec Total = $1,366,491 2015 Jan – June Total = $1,704,929 2016 July – Dec Total = $1,692,872 2016 Jan – June Total = $1,938,561 2017 July – Dec Total = $1,788,282 2017 Jan – June Total = $1,542,937 Prior 4-Year First Half Average = $1,693,906 Prior Four Year Second Half Average = $1,852,140 2018 July – Dec Total = $1,562,604 Prior 4-Year First Half Monthly Average = $282,318 Prior 4-Year Second Half Monthly Average = $308,690 Try to find out what was purchased in May/June of 2014.

January 2018 – June 2018 Forecast FY18 School Operating Total Budget $17,372,639* (a) * Operating Budget $17,372,639 Cafeteria Budget 880,550 FY18 Total Expenditures as of 12.31.17 7,794,265 (b) Textbook Budget 262,472 Total FY18 Budget $18,515,661 FY18 Payroll Expenses Remaining Using Monthly FY18 Payroll Avg x 7 contract months remaining, with adjustments for 12 month employees and reimbursement for County personnel 8,580,418 (272,076) 93,858 8,402,200 (c) **Total FY18 Costs Using Predictions: Total FY18 Expenditures at Year-End WITH REMAINING PAYROLL ONLY $16,196,465 (b + c = d) $18,048,605 - $675,966 over budget (uses monthly non-payroll avg from prior 4 years) $17,759,069 - $386,430 over budget (uses monthly non-payroll avg from FY18 July through December) Amount Remaining for Non-Payroll Expenditures $1,176,174 (a – d = e) Jan – June Monthly Avg over Prior 4 Years $308,690 Monthly Avg Available To Stay Within Budget $196,029 (e / 6 remaining months) Adjust $8,580,418 to show 12 month pulled out of June with Dorsey/Boswell added back. Adjust remaing balance available for AP. Put small note to side to explain. Add slide with Bar Graph showing Historical Second Half AP, Current AP level, Available AP remaining for FY18, by month and period if possible.

A Look at Available FY18 Non-Payroll Budget Remaining Review in Total Dollars Review by Month