Budget Presentation

PROCESS BOARD ROLE IN THE BUDGET PROCESS: Establish philosophy and set budget development and adoption policy Review, adopt and revised budget BOARD ROLE IN THE BUDGET PROCESS: Establish philosophy and set budget development and adoption policy Review, adopt and revised budget

Initiate Goal setting Process Review Status of Prior Year Goals Develop Goals for the Coming Year Develop Strategies For the Goals Identify Funding Sources Set Priorities Allocate Funds Distribute Guidelines/Allocations Review, Discuss, Build Budget Collect data detail Validate/Confirm Balance Hearing and Public Review Revision Final Budget Adoption Initiate Goal setting Process Review Status of Prior Year Goals Develop Goals for the Coming Year Develop Strategies For the Goals Identify Funding Sources Set Priorities Allocate Funds Distribute Guidelines/Allocations Review, Discuss, Build Budget Collect data detail Validate/Confirm Balance Hearing and Public Review Revision Final Budget Adoption Budget Mechanics

Proposed budget policy The budget shall support the action plans contained in the Strategic Plan Budget assumption shall be developed, reviewed and updated on a regular basis throughout the planning cycle Funds shall be made available in the budget prioritization to provide total compensation to employees consistent with collective bargaining commitments A minimum General Fund Reserve for Economic Uncertainty of 5% shall be maintained in accordance with state guidelines Categorical and Grant Programs, with exceptions of Special Education shall be self-supporting Categorical and grant program year-end balances shall be carried forward in accordance with the terms and conditions of the program regulations The budget shall support the action plans contained in the Strategic Plan Budget assumption shall be developed, reviewed and updated on a regular basis throughout the planning cycle Funds shall be made available in the budget prioritization to provide total compensation to employees consistent with collective bargaining commitments A minimum General Fund Reserve for Economic Uncertainty of 5% shall be maintained in accordance with state guidelines Categorical and Grant Programs, with exceptions of Special Education shall be self-supporting Categorical and grant program year-end balances shall be carried forward in accordance with the terms and conditions of the program regulations

KEY BUDGET TERMs Enrollment ADA Beginning Balance Revenue Expenditures Ending Balance Reserve(s) Enrollment ADA Beginning Balance Revenue Expenditures Ending Balance Reserve(s)

Enrollment / ADA Enrollment is based on California Basic Education Data System (CBEDS)reporting – number of student actually enrolled school ADA ( Average Daily Attendance) is measurement of attendance- seat time. Actual attendance without regard to excused or unexcused absences. ADA is measured at three points: December st Period P1 report, March nd Period P2 report and annual report ADA projections are based on CBEDS enrollment, P1,P2 and annual ADA based on historical trends. Enrollment is based on California Basic Education Data System (CBEDS)reporting – number of student actually enrolled school ADA ( Average Daily Attendance) is measurement of attendance- seat time. Actual attendance without regard to excused or unexcused absences. ADA is measured at three points: December st Period P1 report, March nd Period P2 report and annual report ADA projections are based on CBEDS enrollment, P1,P2 and annual ADA based on historical trends.

Beginning Balance Beginning Balance for the budget year represents the ending balance for the current year (it is an estimate until the audited actuals are available) Components of the beginning balance include: Revolving Cash ( Cash on Bank Accounts – County Treasury Account, General Fund Account and Community Relation Account ) Restricted Balances Reserves Beginning Balance for the budget year represents the ending balance for the current year (it is an estimate until the audited actuals are available) Components of the beginning balance include: Revolving Cash ( Cash on Bank Accounts – County Treasury Account, General Fund Account and Community Relation Account ) Restricted Balances Reserves

REVENUE Revenue limits: Object codes Base revenue limit – fixed amount per ADA LCFF Property TAX – fixed amount per ADA reflects school area (ADA * $)- part of LCFF Supplemental and concentration Grant - unduplicated Pupil Population English leaners and Free and reduce lunch eligible, but not lager than district one FEDERAL REVENUE ( Restricted): Object codes NCLB ( no child behind) Categotical Program s such as Title I, II, III Special Education IDEA (ADA*$) Special Grants STATE REVENUE : Object codes Special Education AB 602 (ADA *$) Lottery Revenue limits: Object codes Base revenue limit – fixed amount per ADA LCFF Property TAX – fixed amount per ADA reflects school area (ADA * $)- part of LCFF Supplemental and concentration Grant - unduplicated Pupil Population English leaners and Free and reduce lunch eligible, but not lager than district one FEDERAL REVENUE ( Restricted): Object codes NCLB ( no child behind) Categotical Program s such as Title I, II, III Special Education IDEA (ADA*$) Special Grants STATE REVENUE : Object codes Special Education AB 602 (ADA *$) Lottery

REVENUE All Categorical Funds are restricted. Lottery has restricted and unrestricted component. Class size reduction (CSR), mandated cost reimbursements (class size should be in ratio 1:24) Special Education apportionment calculated per ADA and should be spend only for student with special needs. LOCAL REVENUE Object codes Interest Earning Fundraising Local Grants All Categorical Funds are restricted. Lottery has restricted and unrestricted component. Class size reduction (CSR), mandated cost reimbursements (class size should be in ratio 1:24) Special Education apportionment calculated per ADA and should be spend only for student with special needs. LOCAL REVENUE Object codes Interest Earning Fundraising Local Grants

Personnel Cost Object code 1000,2000 & 3000 Administration salary – object 1000 Certificated Employee Salary – object 1000 Classified Employee Salary – object 2000 Employees benefits (Social Security, Medicare, Unemployment Insurance, Workers’ Compensation, Retirement, Health and Welfare, Creditable compensation-stipend – object 3000 Personnel Expenditures t are roughly 80-85% of the budget Personnel Cost Object code 1000,2000 & 3000 Administration salary – object 1000 Certificated Employee Salary – object 1000 Classified Employee Salary – object 2000 Employees benefits (Social Security, Medicare, Unemployment Insurance, Workers’ Compensation, Retirement, Health and Welfare, Creditable compensation-stipend – object 3000 Personnel Expenditures t are roughly 80-85% of the budget Expenditures

Books and Supplies Object code 4000 Textbooks and Workbooks Instructional Materials Non- Instructional supplies ( classroom supplies, office supplies) Student Activities( Field trips, visual and performing arts activities, etc.) Janitorial and Maintenance Supply Non Capitalized Equipment ( Computers, furniture, printers, etc.) Food Books and Supplies Object code 4000 Textbooks and Workbooks Instructional Materials Non- Instructional supplies ( classroom supplies, office supplies) Student Activities( Field trips, visual and performing arts activities, etc.) Janitorial and Maintenance Supply Non Capitalized Equipment ( Computers, furniture, printers, etc.) Food Expenditures

Services and Other Operating Expenses Object code 5000 Special Education Personnel Services Professional Development Dues/ Membership Fee- professional organization Liability Insurance Operation and Housekeeping ( LAUSD) Rent/Lease (LAUSD, Bungalows-75% cost reimbursed by SB 740 program) Non instructional contracting services ( nurse, E-Rate, Gate testing, etc.) Communications Object code 5000 items discreet estimates based on an activity Services and Other Operating Expenses Object code 5000 Special Education Personnel Services Professional Development Dues/ Membership Fee- professional organization Liability Insurance Operation and Housekeeping ( LAUSD) Rent/Lease (LAUSD, Bungalows-75% cost reimbursed by SB 740 program) Non instructional contracting services ( nurse, E-Rate, Gate testing, etc.) Communications Object code 5000 items discreet estimates based on an activity Expenditures

Capital Outlay Object code 6000 Sites and Sites Improvement Capitalized Equipment ( all equipment cost > $5,000 per unit) Building and Building Improvement Equipment Replacement Object code 6000 items are direct estimates based on activity Capital Outlay Object code 6000 Sites and Sites Improvement Capitalized Equipment ( all equipment cost > $5,000 per unit) Building and Building Improvement Equipment Replacement Object code 6000 items are direct estimates based on activity Expenditures

Other outgoing Object code 7000 District oversight fee Debt Services Interfund transfers Other outgoing Object code 7000 District oversight fee Debt Services Interfund transfers Expenditures

Ending balance basic formula: Beginning Balance plus Revenues less Expenditures equals Ending Fund Formula As a prudent practice, current year expenditures should not exceed current year revenue Components of the ending fund balance include Cash available for operation and Reserves. Reserves are components of the fund balance. Reserves may be establish as a legally required 5% of total outgo. Ending balance basic formula: Beginning Balance plus Revenues less Expenditures equals Ending Fund Formula As a prudent practice, current year expenditures should not exceed current year revenue Components of the ending fund balance include Cash available for operation and Reserves. Reserves are components of the fund balance. Reserves may be establish as a legally required 5% of total outgo. Ending Balance

IMPORTANT FACTORS LOCAL CONTROL FUNDING FORMULA (LCFF) The goal of the LCFF is to significantly simplify how to state funding is provided to local educational agency (LEAs). Under new funding system, revenue limits and most state categorical programs are eliminated. LEAs will receive funding based on the demographic profile of the students they serve and gain greater flexibility to use this funds to improve outcomes of students. Implementation of LCFF begins in fiscal year. The state Department of Finance estimates that achieving full funding levels under LCFF will take eight years based on its current Prop.98 growth projections. Funding targets under LCFF consist of: Grade span-specific base grants that reflect adjustment for grade K-3 class size reductions Supplemental grants equal 20%of the adjusted base grant multiplied by LEAs unduplicated percentage of English Leaners, free and reduced-price meal eligible, and foster youth students Concentration grants equal 50% of adjusted base grants multiplied by an LEAs percentage of unduplicated pupils above 55% Two add-ons equal to the amount s LEAs received in for the Targeted instructional Improvement Block Grant LOCAL CONTROL FUNDING FORMULA (LCFF) The goal of the LCFF is to significantly simplify how to state funding is provided to local educational agency (LEAs). Under new funding system, revenue limits and most state categorical programs are eliminated. LEAs will receive funding based on the demographic profile of the students they serve and gain greater flexibility to use this funds to improve outcomes of students. Implementation of LCFF begins in fiscal year. The state Department of Finance estimates that achieving full funding levels under LCFF will take eight years based on its current Prop.98 growth projections. Funding targets under LCFF consist of: Grade span-specific base grants that reflect adjustment for grade K-3 class size reductions Supplemental grants equal 20%of the adjusted base grant multiplied by LEAs unduplicated percentage of English Leaners, free and reduced-price meal eligible, and foster youth students Concentration grants equal 50% of adjusted base grants multiplied by an LEAs percentage of unduplicated pupils above 55% Two add-ons equal to the amount s LEAs received in for the Targeted instructional Improvement Block Grant

LCFF Update LCFF Funding Classifications English Learners (EL) Eligible for Free and Reduced-Price Meals ( low income –LI) Foster Youths Student eligibility is based on the “unduplicated “ count which means they only count once if the qualify under multiple categories listed above. Accountability & Funding Requirements The estimated timeline to fully fund 8 years The cost to fully implement LCFF exceeds the amount available in the current year; therefore, the state is expected to fund 11.78% of the total cost of the “gap” in LCFF Highlights District and Charters are funded equally Additional funding is provided for the EL/LI students Charter Schools are capped for the concentration funding based on the local school district’s percentage, the highest percentage not to exceed the charter’s own rate LCFF Funding Classifications English Learners (EL) Eligible for Free and Reduced-Price Meals ( low income –LI) Foster Youths Student eligibility is based on the “unduplicated “ count which means they only count once if the qualify under multiple categories listed above. Accountability & Funding Requirements The estimated timeline to fully fund 8 years The cost to fully implement LCFF exceeds the amount available in the current year; therefore, the state is expected to fund 11.78% of the total cost of the “gap” in LCFF Highlights District and Charters are funded equally Additional funding is provided for the EL/LI students Charter Schools are capped for the concentration funding based on the local school district’s percentage, the highest percentage not to exceed the charter’s own rate

LCAP Local Control and Accountability Plan (LCAP) What is the Local Control and Accountability Plan (LCAP)? The LCAP is a critical part of the new Local Control Funding Formula ((LCFF) Each school district must engage parents, educators, employees and the community to establish these plans. The plans will describe the school district’s overall vision for students, annual goals and specific actions the district will take to achieve the vision and goals. The LCAPs must focus on eight areas identified as state priorities. The plans will also demonstrate how the district’s budget will help achieve the goals, and assess each year how well the strategies in the plan were able to improve outcomes. Local Control and Accountability Plan (LCAP) What is the Local Control and Accountability Plan (LCAP)? The LCAP is a critical part of the new Local Control Funding Formula ((LCFF) Each school district must engage parents, educators, employees and the community to establish these plans. The plans will describe the school district’s overall vision for students, annual goals and specific actions the district will take to achieve the vision and goals. The LCAPs must focus on eight areas identified as state priorities. The plans will also demonstrate how the district’s budget will help achieve the goals, and assess each year how well the strategies in the plan were able to improve outcomes.

LCAP What are the eight state priority areas that must be addressed in the plans? There are eight areas for which school districts, with parent and community input, must establish goals and actions. This must be done both district-wide and for each school. The areas are: 1.Providing all students access to fully credentialed teachers, instructional materials that align with state standards, and safe facilities. 2.Implementation of California’s academic standards, including the Common Core State Standards in English language arts and math, Next Generation Science Standards, English language development, history social science, visual and performing arts, health education and physical education standards. 3.Parent involvement and participation, so the local community is engaged in the decision-making process and the educational programs of students. 4.Improving student achievement and outcomes along multiple measures, including test scores, English proficiency and college and career preparedness. 5.Supporting student engagement, including whether students attend school or are chronically absent. 6.Highlighting school climate and connectedness through a variety of factors, such as suspension and expulsion rates and other locally identified means. 7.Ensuring all students have access to classes that prepare them for college and careers, regardless of what school they attend or where they live. 8.Measuring other important student outcomes related to required areas of study, including physical education and the arts. In addition to these eight areas, a district may also identify and incorporate in its plan goals related to its own goals and priorities What are the eight state priority areas that must be addressed in the plans? There are eight areas for which school districts, with parent and community input, must establish goals and actions. This must be done both district-wide and for each school. The areas are: 1.Providing all students access to fully credentialed teachers, instructional materials that align with state standards, and safe facilities. 2.Implementation of California’s academic standards, including the Common Core State Standards in English language arts and math, Next Generation Science Standards, English language development, history social science, visual and performing arts, health education and physical education standards. 3.Parent involvement and participation, so the local community is engaged in the decision-making process and the educational programs of students. 4.Improving student achievement and outcomes along multiple measures, including test scores, English proficiency and college and career preparedness. 5.Supporting student engagement, including whether students attend school or are chronically absent. 6.Highlighting school climate and connectedness through a variety of factors, such as suspension and expulsion rates and other locally identified means. 7.Ensuring all students have access to classes that prepare them for college and careers, regardless of what school they attend or where they live. 8.Measuring other important student outcomes related to required areas of study, including physical education and the arts. In addition to these eight areas, a district may also identify and incorporate in its plan goals related to its own goals and priorities

IMPORTANT FACTORS COMMON CORE IMPLEMENTATION FUNDS Charter Schools receiving these funds may receive the apportionment any time during and fiscal years. As stated in AB 86 LEAs shall expend funds for any of following purposes: Professional development for teachers, administrators, and paraprofessional educators or other classified employees involved in the direct instruction of students that is aligned to the academic content standards Instructional materials aligned to the academic content standards Integration of these academic content standards through technology-based instruction for purposes of improving the academic performance of students, including, but not necessary limited to, expenditures necessary to support the administration of computer-based assessments and provide high-speed Internet connectivity for the purpose of administration of computer-based assessments As of condition of receiving these funds, LEAs must develop and adopt a plan delineating how funs shall be spend. Detailed expenditures information is due to the CDE at end of fiscal year COMMON CORE IMPLEMENTATION FUNDS Charter Schools receiving these funds may receive the apportionment any time during and fiscal years. As stated in AB 86 LEAs shall expend funds for any of following purposes: Professional development for teachers, administrators, and paraprofessional educators or other classified employees involved in the direct instruction of students that is aligned to the academic content standards Instructional materials aligned to the academic content standards Integration of these academic content standards through technology-based instruction for purposes of improving the academic performance of students, including, but not necessary limited to, expenditures necessary to support the administration of computer-based assessments and provide high-speed Internet connectivity for the purpose of administration of computer-based assessments As of condition of receiving these funds, LEAs must develop and adopt a plan delineating how funs shall be spend. Detailed expenditures information is due to the CDE at end of fiscal year

Funding Schedule Funding Schedule: LAUSD payment usually last week of the month include : Special Education Property TAX State Funding : General Funding ( LCFF) – usually first week of the month Federal Funding - Schedule are various date quarterly Child Nutrition Program - usually by the end of the following month Funding Schedule: LAUSD payment usually last week of the month include : Special Education Property TAX State Funding : General Funding ( LCFF) – usually first week of the month Federal Funding - Schedule are various date quarterly Child Nutrition Program - usually by the end of the following month