Warsaw Community Schools November 2018 2019 Budget Changes Warsaw Community Schools November 2018

ESSA – Every Student Succeeds Act – Federal Law Changes ESSA – Every Student Succeeds Act – Mandates expenditures must be shown by building and when not possible to be prorated across buildings according to number of students in each building State Law Changes HEA 1009 – 2017

HEA1009-2017 IC 20-42.5-3-7, effective July 1, 2018, requires: “Sec. 7. (a) The chart of accounts used by school corporations must: (1) Coincide with the categories of expenditures described in section 4 of this chapter; and (2) Provide the ability to determine expenditures made at and for each individual school building of a school corporation. Each school corporation shall on January 1, 2019, begin using the chart of accounts developed under this section. (b) The state board of accounts may, in consultation with the department and the office of management and budget, modify the chart of accounts as necessary to make the chart of accounts coincide with the categories of expenditures described in section 4 of this chapter.” This level of financial reporting is unprecedented for our state, but it also provides a tremendous opportunity to build an information system that can be used to drive improvements for our schools. School-level financial data will enable education leaders and stakeholders at all levels to better understand spending patterns across the state and individual districts, and use that knowledge for the benefit of our students.

Current Warsaw Schools Budgeted Funds General Capital Projects Transportation Bus Replacement Debt Service Referendum

Uses of Fund and Primary Source of Revenue Primary Use Primary Source of Revenue General Salaries and benefits of most employees (except as permitted below); insurance; utilities; supplies; classroom technology State tuition support based on enrollment Capital Projects Equipment, maintenance and repairs of buildings and equipment, portions of insurance & utilities, energy savings programs, non-classroom technology & supplies Local property taxes Transportation Salaries & benefits of transportation employees, fuel & repair of buses, transportation contracts Bus Replacement Purchase of new buses Debt Service To repay corporation debt

2019 Budget Funds per HEA 1009 Debt Service Education Fund Operations Referendum

Use of Fund and Primary Source of Revenue (2019) Primary uses Primary source of revenue Education All Category 1 (Academic Achievement) and 2 (Student Support) from General Fund “Dollars to the Classroom” defined as Direct Classroom Expenditures State tuition support based on enrollment (same as 2018) Operations All Category 3 (Overhead) and 4 (Non-Instructional) expenses from General + All previous uses of CPF, Transportation, and Bus Replacement Local property taxes

Warsaw Expenditure/Revenue Comparison 2018 to 2019 2018 Current Structure 2019 New Structure (for comparison only – no change to appropriated amounts) Expenditures (1C from 1782 notice) Revenue (8B+16 from 1782 notice) 2018 General 2019 Education 46,571,095 46,632,184 39,471,095 39,532,184 2018 CPF + Transportation+ Bus 2019 Operations 11,649,908 10,529,356 18,749,908 10,529,356 + Estimated Transfer Estimated Transfer - 14.9% of expenditures (~$7,100,000) in 2018 General Fund will be transferred to new Operations Fund in 2019

How do we make the transition? Changes in Budget Preparation: Software must be updated to shift expenditure accounts to new funds CPF advertise on capital purchases over $10,000; 5 Year Bus Replacement Plan; advertise on website and newspaper (2019), website (2020) Board Resolution - create Education and Operations Funds 1/1/19-Transfer cash balance of General Fund to Education Fund 1/1/19- Transfer cash balances of Capital Projects Fund, Transportation Fund, Bus Replacement Fund to Operations Fund Before 3/1/19, transfer portion of former General Fund cash balance attributable to operations to Operations Fund Other transfers throughout the year: Board resolutions

Careful long range planning will be more critical than ever!!! The interaction between the Education and Operations Funds will continue to evolve the cash balance within the Operations Fund Enrollment: Increasing or Declining? Will impact the revenue to the Education Fund Flexibility creates danger or a temptation to overspend in one area (previously funds in separate silos and not easy to overspend)

Benefits of providing per pupil expenditure data -Allows expenditure comparisons within a school district per school -Provides the school governing body a comparison across other school districts within the state and across states -Assists the governing body with allocating funds to each school building -Provides legislators with data to determine allocation of funds -Helps districts develop long term goals.

Definitions of Expenditures Instructional expenditure: This represents those direct expenditures related to instruction, providing instruction, instructional materials, and instructional supervision. of pupils, including teachers (salaries and related fringe benefits), teacher aides, educational media services, textbooks, and instructional technology. Also includes other expenditures for those services that support student academic achievement within the school building. Pupil support services included in these expenditures are attendance, social work, guidance, health, psychology, speech pathology, audiology, and school administration. Operational expenditures: This represents expenditures for non-instructional operating costs. Areas included are corporation administration, fiscal services (budgeting, payroll, and accounting), operation and maintenance of facilities, security, pupil transportation, purchasing, and administrative technology. Non-Operational expenditures: This represents expenditures that are not related to the day-to-day operation of public elementary and secondary facilities acquisition and construction, purchase of non-instructional equipment, community services, and debt service obligations. Expenditures falling in this category are Note: Non-Operational expenditures are shown in the “Excluded” section of the ESSA report.

Federal Requirements under ESSA – Total Expenditures by School & Corporation

Federal Requirements under ESSA – Expenditures per student by school & corporation

What Does All of This Mean for Warsaw Schools? Awareness Compare one schools expenditures to another Title funds comparison from one school to another Board, teachers, and administrators transparency on spending Questions??