1. Inaugural Extension Council Conference
March 4, 2017

2. Fiscal Reports & Budgeting
2017 Iowa Extension Council Association Annual Conference Gene Mohling, Regional Director Region 15

3. Presentation includes:
What’s In Your Wallet? (I mean bucket)
Table Tax-Mil Rates & Limits
How Do Valuations Impact Counties
Timing of Tax Fund Acquisition
Concept of Carryover & What’s Healthy?
So You Are Going To Be Audited! (Are you worried?))
Using Fee Programs for WHAT?
Reading and Understanding Fiscal Reports
Questions

4. Donor Restrict Subfund
What’s in your Bucket?
Fund Accounting 101
There are 4 Sub-Funds which make up the Extension Education Fund
Tax & Other Subfund
Grant & Contract
Donor Restrict Subfund
Program Fee

5. Extension Law Taxation Caps FY 17 & 18
The Double Cap Issue:
2010 Population
Dollar Cap Increases Each Year by
Levy Rate
FY 2017
FY 2018
Less than 30,000
$6,000
0.3000
$ ,000
$ ,000
30,000 to 49,999
$7,000
0.2025
$ ,000
$ ,000
50,000 to 89,999
$9,000
0.1350
$ ,500
$ ,500
90,000 to 199,999
$15,000
$ ,000
$ ,000
More than 200,000
$25,000
0.0500
$ ,000
$ ,000

6. Tax Law – Effective Valuations:
Translates into the aggregate District Taxable Valuation needed to avoid the double cap, the Levy cap:
FY 2017
FY 2018
Less than 30,000
0.3000
$ ,000,000
$ ,000,000
30,000 to 49,999
0.2025
$ 1,343,209,877
$ 1,377,777,778
50,000 to 89,999
0.1350
$ 2,566,666,667
$ 2,633,333,333
90,000 to 199,999
$ 4,000,000,000
$ 4,111,111,111
Greater than 200,000
0.0500
$ 16,000,000,000
$ 16,500,000,000

7. How Do Valuations Effect Tax Revenue?
59 Districts currently have a single cap - $ only
41 Districts now have the “double cap” – both $ and levy cap
22 of those districts can not raise even 75% of the dollar cap
10 of those districts can not raise even 50% of the dollar cap
Another 12 Districts vulnerable to levy cap within 3 years if no significant valuation changes in their county
Almost all of the Districts with these double cap challenges are in the “below 30,000 population bracket” with majority of counties below 11,000 in population

8. Conservative Budgeting Suggests
Timing of Tax Receipts
Average
Range in %
Conservative Budgeting Suggests
July
0.6%
.3 to .8
don’t plan on any
August
0.1%
0 to .7
September
4.5%
.6 to 7.6 1%
October
39.0%
36.0 to 41.8
35%
November
6.2%
3.8 to 9.1 4%
December
2.2%
1.5 to 2.9
January
0.7%
.6 to .9
February
0.5%
.5 to .7
March
2.4%
2.1 to 2.9 2%
April
37.9%
36.0 to 38.6
36%
May
5.0%
4.0 to 7.5
June
0.8%
.7 to 1.0
balance

9. Carryover Rule: The District may carry over in the tax subfund up to 50% of that fiscal year’s tax subfund expenditures.

10. How do you determine the health of a district budget?

11. Budget Review Let’s talk .......given the following...
Balance Sheet FYE’16
Revenue & Expense Summary FYE’16
Budgeting Planning Summary FY’18
Answer the following questions.....?

12. Of the $215,675 carryover, how much of it is in the tax subfund
Of the $215,675 carryover, how much of it is in the tax subfund? (Hint-use the balance sheet)

13. For the FY ending June 30, 2016, what was the maximum carryover limit that would have been allowed? (Hint-Rev./Exp. Summary)

14. Am I within my 3-4 month “rule of thumb” for carryover?

15. Have I under or over spent my tax subfund the last 3 years?

16. Based on net tax subfund income FY14-16, what was my FY14 beginning tax subfund amount?

17. Can Program Fee revenue be used to cover wages?
Is the use of Program Fee to purchase a full time position sustainable?

18. Does this County have a carryover problem?
Using the Balance Sheet and Revenue & Expense Summary through February 28, 2017, what would you advise?

19. Summary on Tax Revenues
1/3 ---of the counties levy 100% for Extension Education fund as well as levy for either Tort, Unemployment, or both 1/3 ---of the counties levy 100% of the Extension Education fund but did not levy for Tort Liability fund or the Unemployment Compensation fund this past year 1/3 ---of the counties did not levy to their first their cap -- $600,000 left just in the Extension Education fund

20. “Tax” Expenses – Actuals FY16
District Expenses as a Percent of Tax Sub-Fund Revenue
Mean
Median
Maximum
Minimum
Standard Deviation
Personnel Expense
72.4%
71.6%
109%
44%
12.4%
Facility Expense
9.9%
8.7%
42% 0%
6.3%
General Office Expense
12.8%
12.1%
24% 7%
3.8%
Non-Fee Expense
2.9%
1.3%
23%
4.3%
Residual: Net Gain or Loss
2.0%
4.1%
-35%
10.7%
Note: Tax sub-fund includes interest, rental, resale & other revenues too

21. What about the Double-Capped Counties Rev & Exp Structure?
Hypothesis: As their taxation is limited, there would be a difference in the expenditure category mix
Nope! Percentages in each category nearly identical to the whole set
Implies good financial management – “We Make Do with What We Have”

22. New Ways – Example $ Ratios
Ending Operating Account Balance FYE 16
Mean
Median
Maximum
Minimum
Standard Deviation
As a % of Actual Tax Revenue for the Year
82.3%
75.3%
274%
30%
34.0%
As a % of all Actual Expense for the Year
54.8%
53.5%
138%
23%
20.6%

23. Time for a Financial Health Index?
Reasons For:
Could be our equivalent to the bank’s stress test
Early warning system
Objective measure to help council members
Natural next step of collected data and our financial system
Accreditation metric
Debt…
Reasons Against:
Agreeing on the criteria
Would it be used?
Do we need to know if a district is having financial issues?
Would it ultimately lead to improved performance?

24. Financial Health Categories?
“SEVERE”
Use of Warrants to pay bills -or-
Projection for year shows using warrants or-
Total Operating Account at FYE is 10% or less of budgeted expenses
Implications – Considerations:
Dissolving discussions
Merger options
MOU stipulations
Authority to offer programs revoked (4-H, PPAT, etc)
Mandatory financial SWAT team

25. Next Category of Concern
“VULNERABLE”
FYE operating account is 10-25% of projected expense -and-
Decreasing % Operating Account carryover 1-2 years and-
Decreasing % Tax Sub-Fund balance and-
Personnel expenses shows lack of sustainability
Rapidly draining Program Fee balances

26. One more level of concern…
“Watch List”
?? Double-capped taxation
-and-
?? Leveraged with debt
Decreasing FYE operating account balances 3 straight years
Other objective measures

27. AND – Other End of Spectrum!
“Under-investing notation”
Districts with good financial ability and capacity, BUT:
Do not demonstrate investing in at least 3 of the 4 program areas, either hiring their own staff or working with multiple Field Specialists
No plan to offer a comprehensive educational program plan within their financial means
Easy, objective measures such as Extension Calendar indicates a lack of educational offering against set standards

28. What is needed for an AUDIT?
Receipt books, deposit slips
All bank statements, voucher reports, invoices
Financial reports-month end (X12)
Proof of publication-hearing and year end
All year end reports
Proof of bonding
Proof of filing w/Auditor and Treasurer
Organizational minutes & certificate of organization
Fiscal policy & all minutes (signed!)
IDOM forms, budget template
Full disclosure and access to staff for questions.....

29. Summary Taxation Revenue Source – What to Monitor
Rule of Thumb: Carry 3-4 months of tax revenue in subfund
Non-Taxation Revenue Sources – Closer Examination
Can these support infrastructure needs periodically?
Expenses To Purposely Manage:
Human Resources – Increased Skill Development of our:
Educators/Associate Educators group
Front Counter (Support Staff) group
Management & Leadership group
Facilities
Continue to Improve All our Systems Impacting the Field Operation

30. Thank for attending today! Questions? mohling@iastate.edu 319-330-4681