Budget Training Webinar Mari Sue Johnson – Financial Reporting Analyst School Finance Unit – Office of Finance & Administration April 24, 2018

Location of Handouts and PBAM Video Training Handouts: https://district.ode.state.or.us/search/page/?=267 Program Budgeting and Accounting Manuals: http://www.oregon.gov/ode/schools-and-districts/grants/Pages/Financial-Budgeting-and-Accounting.aspx Chronological Events to Consider in building Budget and Election Calendars:

Goals of Training PBAM Updates Budget Submission to ODE Budget Law Basics Four Phases of the Budget Process

Program Budgeting and Accounting Manual (PBAM) 2016 edition went live July 1, 2017 Revenue code – 1414 Function codes – 1295, 2680 Appendixes – E and F Language – changes and additions

2017 Edition will go live on or before May 1, 2018 New PBAM Edition 2017 Edition will go live on or before May 1, 2018 Appendix G Recommended guidelines for new-program accounting Appendix H Recommended guidelines for ESSA reporting

Submission to ODE – Paper Submit one copy of your entire budget document to ODE by July 15 Paper copy only – no electronic accepted Include: Budget message Notices Resolutions Tax certification forms Approved ballot measures Local Budget Law page 64 / ORS 294.458

Submission to ODE – Paper If your paper budget is not formatted at the function and source code level… Provide a supplemental spreadsheet Coding by function Coding by source Should mirror data in electronic submission Should mirror subtotals in paper audit

Submission to ODE – Paper Supplemental Template - Sample

Submission to ODE – Paper Supplemental Template - Sample

Submission to ODE – Paper Please send one copy to: Laura Marshall Oregon Department of Education 255 Capitol Street NE Salem, OR 97310

Submission to ODE - Electronic District Website/Login https://district.ode.state.or.us Enter User Name and Password – (Managed by District Security Administrator) Select Institution Collections Both SDs and ESDs complete Actuals Both SDs and ESDs complete OpUnit Both SDs and ESDs complete Budgets ESDs complete ESD Direct Support

Submission to ODE - Electronic Submit Electronic Data Budget Collections Expenditures and Revenue Opens – June 21, 2018 Closes – August 15, 2018

Submission to ODE - Electronic Budget Collections close August15 Include: Fund and Source codes Fund, Function and Object codes Adopted dollar amount budgeted Contingencies Unappropriated Ending Fund Balances

Submission to ODE - Electronic Budget Submission Reminders: Yes – Submit all budgeted figures Resources must equal requirements Revenues are submitted as positive numbers Review Consolidated Collection Reports No – Do not submit revised adopted budgets Do not submit revised resolutions Do not submit supplementary budget changes

What is a Budget? A budget is the basis for appropriations, which create the authority to spend public money Financial plan Estimate of Resources (revenues) and Requirements (expenditures) Certifies property taxes to county assessor Single fiscal year or HB 2263 allows for biennium Fiscal year: July 1 – June 30

Local Budget Law Governance Who: Oregon Department of Revenue What: Trains local officials on Local Budget Law Provides budgeting manuals and forms Sets out specific steps that must be followed during the budget process Where: Oregon Revised Statutes (ORS) 294.305 to 294.565 Why: It’s the law!

Purposes of Local Budget Law Establish standard procedures Outline programs and fiscal policies Require estimate of resources and expenditures Encourage citizen involvement Control expenditure of public funds via appropriations

Why Follow Local Budget Law? A district that does not follow LBL may not lawfully: Expend money (with some exceptions) Certify property taxes to the county assessor (ORS 294.338) A property tax made contrary to LBL is voidable by the Oregon Tax Court if appealed. (ORS 294.461) Use DOR example on their page 4 for taxes voided by the court. Include who can appeal. Concludes the overview of Budget Law Basics.

Four Phases of the Budget Process Propose the budget Approve the budget Adopt the budget Changes after adoption

Phase 1 - Propose the Budget Budget Officer Appointed at first organizational meeting Prepares budget under direction of Executive Officer or Governing Body (ORS 294.331)

Phase 1 - Propose the Budget Budget Message Prepared by/under Executive Officer Explains budget document Describes financial policies Explains changes Must be in writing Can be delivered by anyone (ORS 294.403)

Phase 1 - Propose the Budget The Proposed Budget: Must be prepared by fund Estimate of resources & requirements must be in line item detail Estimates of resources & requirements must be in “good faith” All resources & requirements must be budgeted Resources & requirements must balance (ORS 294.305)

Phase 1 - Propose the Budget Standardized Budget Format – The budget officer prepares the proposed budget using budget detail sheets. Historical Data Descriptions of Resource and Requirement Budget for Next Year 2018-19 Actual Adopted Budget This Year 2017-18 Proposed By Budget Officer Approved By Budget Committee Adopted By Board Second Preceding Year 2015-16 First Preceding Year 2016-17

Phase 1 - Propose the Budget Fund Classifications General Fund (100) Special Revenue Fund (200) Debt Service Fund (300) Capital Projects Fund (400) Enterprise Fund (500) Internal Service Fund (600) Trust and Agency Fund (700)

Phase 1 - Propose the Budget Budget Resources – Money In Beginning Fund Balance Current Year Taxes Prior Year Taxes Interest Earned Grant Revenue Bond Proceeds Transfers In

Phase 1 - Propose the Budget Budget Requirements – Money Out School Districts and Education Service Districts Appropriate by Function Other Uses (5000) Debt Service (5100) must be an appropriation line item Transfers (5200) must be an appropriation line item Unappropriated Ending Fund Balance (UEFB) UEFB Function 7000 is not appropriated

Phase 1 - Propose the Budget Budget Building Requirements Resources must equal requirements Historic figures must be Actuals (slide 23) Current year budget must be the final adopted budget as amended to date (slide 23) Next year proposed, approved and adopted columns must be displayed (slide 23)

Phase 1 - Propose the Budget Budget Building Requirements All Funds must appear by fund and function All Resources must include prior year’s taxes Transfers In (5200) = Transfers Out (5200-710) FTE must be in budget

Four Phases of the Budget Process Propose the budget Approve the budget Adopt the budget Changes after adoption

Phase 2 - Approve the Budget Budget Committee The Governing Body + an Equal Number of Appointed Electors Electors are registered voters in the district Cannot be officer, agents or employees Appointed for staggered 3-yr. terms All members have the same authority If you can’t fill all appointed, committee can be fewer

Phase 2 - Approve the Budget Notice of Budget Committee Meeting Publish notice of first meeting at which: The budget and budget message are presented, and the public comments and questions are heard. Form A If the public comments are not heard at the first meeting, give notice of both meetings. Form B In Washington County, also submit summary of proposed budget for publication on the county website. (ORS 294.608)

Phase 2 - Approve the Budget Publication Methods Printing twice in a newspaper of general circulation 5 – 30 days before meeting Posting notice on your website At least 10 days before meeting And printing once in newspaper 5-30 days before meeting Mailing by U.S. Postal Service first class To each street address, PO Box and RRN in district at least10 days before meeting Hand delivery To each street address in district at least 10 days before meeting

Phase 2 - Approve the Budget Budget Committee Meeting Process All budget committee meetings subject to public meeting laws Presiding officer must be elected at first meeting Quorum is required to conduct business Majority of committee is required to take action Committee may request and receive additional information from district officials

Phase 2 - Approve the Budget Budget Committee Duties Receive the budget document Hear the budget message Hear and consider public comment Discuss and revise the budget as needed Approve the budget Approve the property taxes

Phase 2 - Approve the Budget Budget Committee Receives Budget Document Budget is a public document when released to committee Available to the public at the same time as the committee Public has right to inspect Must provide means for public to copy Can charge for copies

Phase 2 - Approve the Budget Budget Committee Hears Public Comment On the date and time in the published notice If additional meetings, give same notice as regular meeting of governing body Any member of “public” may speak May establish time limits and other policies for public comment period

Phase 2 - Approve the Budget Budget Committee Final Action Approve the budget When the budget committee has approved the budget and the taxes, it is now finished. Sample motion to approve budget: “I move that the budget committee of Cherry City approve the budget for the 2018-19 fiscal year in the amount of 12,345,678.” (motion and vote recorded in the minutes.)

Phase 2 - Approve the Budget Following Budget Approval DoR Forms to Complete ED-1 Notice of Budget Hearing and Financial Summary ED-50 Notice of Property Tax & Certification of Intent to Impose a Tax on Property for Education Districts Oregon Department of Revenue – Finance & Taxation www.oregon.gov/DOR/forms

Phase 2 - Approve the Budget Following Budget Approval Publish Budget Hearing Notice and Summary of Budget Print once in newspaper 5 to 30 days before hearing Mail or hand deliver to each street address, PO Box, or RRN At least 10 days before hearing If budget is <$100,000 and no newspaper published in district, can post in 3 places At least 20 days prior to hearing There is no internet publication option for this notice

Phase 2 - Approve the Budget Following Budget Approval Publish Budget Hearing Notice and Summary of Budget Alternative Publication Format Optional narrative format Same information as Form ED-1 Same timelines as Form ED-50 Can use narrative, charts, pictures, etc.

Phase 2 - Approve the Budget Publication Errors Budget published is not “as approved” by the Budget Committee Hearing notice not published timely Hearing not held on date published Budget summary doesn’t include all funds Budget doesn’t balance

Phase 2 - Approve the Budget Correcting Publication Errors Publication is considered sufficient if the budget officer makes a “good faith” effort If you know your notice will be late, re-schedule the hearing and publish timely If you know your hearing won’t be on the date published, publish another notice

Phase 2 - Approve the Budget Correcting Publication Errors If these errors occur: Typographical error Math error Error in calculating the tax Then at first meeting after error is discovered, budget officer must: Advise the governing body in writing and Give testimony correcting the error

Four Phases of the Budget Process Propose the budget Approve the budget Adopt the budget Changes after adoption

Phase 3 - Adopt the Budget Governing Body Holds Budget Hearing On date and time published Or reschedule & publish a revised notice Budget “as approved” by the budget committee Any person may comment on the budget

Phase 3 - Adopt the Budget Changes After Budget Hearing Governing Body may increase expenditures or tax, but: If expenditures in any fund increases by more than 10% or $5,000 (whichever is greater), or If the rate or amount of tax increases at all: Budget must be republished and another hearing must be held with regular publication requirements.

Phase 3 - Adopt the Budget Governing Body Duties Enact resolutions to: Adopt the budget Make appropriations Impose each tax levy Categorize each tax by its Measure 5 category Fills out necessary Department of Revenue Forms Submits Paper and Electronic Budgets to Department of Education

Phase 3 - Adopt the Budget Governing Body Duties Making Appropriations

Phase 3 - Adopt the Budget Governing Body Duties Making Appropriations Yes Appropriate by fund Appropriate 5100 as a separate line item Appropriate 5200 as a separate line item NO Do not include UEFB in appropriation totals

Phase 3 - Adopt the Budget Final Budget Review - Budget Checklist Governing body appoints a budget officer at first board meeting in July Governing body appoints budget committee Budget officer prepares the proposed budget Budget officer publishes the Notice of Budget Committee Meeting as required Budget officer provides a copy of the proposed budget to each member of the budget committee and the public Budget officer files a copy of the budget in the district office for public viewing Executive officer of district prepares or directs preparation of the budget message

Phase 3 - Adopt the Budget Final Budget Review - Budget Checklist Budget committee meets at the time and place in notices to receive proposed budget and budget message, and hear public comment and questions from any interested person Budget committee approves budget Budget committee establishes and approves the amount or rate of tax the district will impose Budget officer publishes one Notice of the Budget Hearing and a summary of the approved budget (ED1 form) Governing body conducts the budget hearing and takes public comment from any interested person After the hearing, the governing body can make adjustments to the approved budget

Phase 3 - Adopt the Budget Final Budget Review - Budget Checklist 14. If governing body wants to raise expenditures more than $5,000 or 10%, or increase tax, it must republish the adjusted budget and publish a notice of a second budget hearing (a) Governing body holds a second budget hearing if required After budget hearing, governing body enacts resolutions to adopt budget, appropriations, impose tax and categorize tax Budget officer submits certification documents to assessor’s office by July 1 Budget document including notices, resolutions, etc. submitted to Department of Education by July 15

Phase 3 - Adopt the Budget Final Budget Review - Budget Checklist 18.Electronic budget submissions submitted to ODE by August 15 19.Budget document to County Clerk by September 30 Complete budget includes: -budget message; -budget detail sheets notices, resolutions and approved ballot measures; -meeting notices or affidavits of publication; -resolutions adopting, appropriating, imposing, etc.; -tax certification; -sample ballot for any new tax

Four Phases of the Budget Process Propose the budget Approve the budget Adopt the budget Changes after adoption

Phase 4 – Changes after Adoption Budget Plan based on estimates Provides the foundation for appropriations Appropriations Limitations on expenditures Authority to spend public money Budgets and appropriations may be changed during the year Some changes can be made by resolution Some changes require a supplemental budget

Phase 4 – Changes after Adoption Make changes to Appropriations or Budget before over-spending The change must be in place before an over-expenditure is made. Adopting a resolution or supplemental budget after an over-expenditure does not correct the violation of Local Budget Law. (ORS 294.456(6)

Phase 4 – Changes after Adoption Actions Possible after Adoption Transfer of appropriation authority – ORS 294.463 Supplemental budget – ORS 294.471 & 294.473 Expenditures outside of budget law – ORS 294.338 Other fiscal tools – Interfund loans – ORS 294.468 Eliminate unnecessary fund – ORS 294.353 Emergency authorizations – ORS 294.481

Phase 4 – Changes after Adoption Appropriation Transfers - Resolution To move appropriations between existing categories within a fund or between two funds To transfer appropriations and resources from one fund to any other fund Resolution must state: Need for transfer Purpose of expenditure Amount

Phase 4 – Changes after Adoption Transfer Contingency Transfer to another existing appropriation Transfer by resolution is limited to 15% of total fund appropriations 15% limit is cumulative for the fiscal period If more than 15% transferred in a year, a supplemental budget is required for the excess

Phase 4 – Changes after Adoption Supplemental Budget Modifies the currently adopted budget Effective through the end of fiscal year only Used to: increase or decrease appropriations create a new appropriation category, or create a new fund

Phase 4 – Changes after Adoption Supplemental Budget Justification: Occurrence of condition not known during the regular budget process Unforeseen pressing necessity requires prompt action Unanticipated money from federal, state or local government Request for services, to be paid by others Destruction, involuntary conversion or sale requires immediate replacement More property taxes received than estimated Local option approved in September election Add debt service when GO bonds are approved in May election

Phase 4 – Changes after Adoption Supplemental Budget Process Two processes Change in expenditures in a fund is 10% or less Change in expenditures in a fund is > 10% When determining expenditures, do not include: Transfers Contingency Reserves for future expenditure or Unappropriated Ending Fund Balance

Phase 4 – Changes after Adoption If Change is 10% or Less Adopt at a regular meeting (no hearing required) Publish notice of the regular meeting At least 5 days prior to meeting In newspaper, by 1st class mail or by hand-delivery Include a statement that a supplemental budget will be considered at the meeting Adopt by resolution Appropriate by a resolution that states the need for, the purpose and the amount of the appropriation

Phase 4 – Changes after Adoption If Change is More Than 10% Public hearing is required Publish notice of the regular meeting At least 5 days prior to meeting In newspaper, by 1st class mail or by hand-delivery Summarize changes in each fund changing >10% After hearing, adopt by resolution Resolution must state the need for, the purpose and the amount of the appropriation

Phase 4 – Changes after Adoption Supplemental Budget Hearing Notification

Phase 4 – Changes after Adoption Supplemental Budget Hearing Notification

Phase 4 – Changes after Adoption

Phase 4 – Changes after Adoption Appropriation Transfer or Supplemental Budget? Appropriation Transfer - ORS 294.464 Transfers appropriation authority from one existing category to another. No change to the overall appropriation expenditure authority. Contingency transfers of up to 15% of total fund appropriations Supplemental Budget - ORS 294.471 & 294.473 Creates a new appropriation category or fund. Changes overall appropriation authority (i.e. changes overall footprint of budget). Contingency transfers of over 15% of total fund appropriations May or may not require a hearing

503-945-8293 / finance.taxation@oregon.gov Department of Revenue Finance & Taxation contact information: www.oregon.gov/DOR/programs/property/Pages/local-budget.aspx 503-945-8293 / finance.taxation@oregon.gov 2018-19 Local Budget Law & Notice of Property Tax Pamphlet Form ED-1, Notice of Budget Hearing Form ED-50, Notice of Property Tax and Certification of Intent to Impose a Tax Resolution Template Notice of Supplemental Budget Hearing Form

ODE Financial Collections District Website/Login https://district.ode.state.or.us Enter User Name and Password – (Managed by District Security Administrator) Select Institution Collections Both SDs and ESDs complete Actuals Both SDs and ESDs complete OpUnit Both SDs and ESDs complete Budgets ESDs complete ESD Direct Support

Contact Information Financial Topics: Mari Sue Johnson (503) 947-5883 or Mari.johnson@state.or.us Laura Marshall (503) 947-5916 or Laura.marshall@state.or.us Technical Topics: ODE Helpdesk (503) 947-5715 or ode.helpdesk@state.or.us

ODE Web Links District website for Institution Collections, Accounting Documents, Forms, News, Training and Calendars: https://www.district.ode.state.or.us Ode homepage for DBI Reports, SSF Estimates, SSF Warrants, Documents, Manuals and Memos: https://www.oregon.gov/ODE Schools & Districts>Finance>State School Fund>Financial Budget and Accounting

Questions? Thank you for attending 