1. HELPING YOUR DISTRICT STAY OUT OF FISCAL OVERSIGHT OSBA / OASBO Treasurers Clinics September, 2011 Presented by Roger Hardin, Assistant Director Office of Finance Program Services

2. Who Are We? Center For Student Support and Education Options Office of Finance Program Services  Tom Gumpf, Interim Director  Twenty Area Coordinators providing direct services to districts  Roger Hardin, Assistant Director  Nine Fiscal Consultants providing direct services to districts  Two Fiscal Consultants serving as Commission Chairs  One Fiscal Consultant serving as Secretary/Monitor to Commissions 2

3. Five Year Forecast: Where It All Begins Requirements per ORC 5705.391 and OAC 3301-92-04:  Electronic submission of both projections and assumptions to ODE by October 31  All districts must update the forecast between April 1 and May 31  ODE must examine the five year forecasts and determine if a district has the potential to incur a deficit during the first three years  Closed period from August 15 to October 15 3

4. Fiscal Year 2011, Projected Districts in fiscal oversight – 35 Projected low fund balances – 28 Projected fund balance deficits - 6 4

5. Fiscal Year 2012, Projected Districts in fiscal oversight – 35 Projected low fund balances – 32 Projected fund balance deficits - 28 5

6. Fiscal Year 2013, Projected Districts in fiscal oversight – 35 Projected low fund balance – 46 Projected fund balance deficits - 135 6

7. What Do We Do? Districts are to be contacted if any of the following four flags appear:  Current Year Deficit – Direct contact from fiscal consultant  Current Year Low Fund Balance – Direct contact from fiscal consultant  Deficit in Year Two – Letter from Columbus office requesting plan to eliminate the deficit  Deficit in Year Three – Letter from Columbus office 7

8. Current Year Deficit  For October, 2011 forecast, this will be FY 12  Fiscal Consultant will contact the district Treasurer either by phone or in person  Need to determine if district can complete the fiscal year without incurring a deficit  Consultant may offer services:  Forecast review with Treasurer  Financial Analysis  Arrange Staffing Analysis with Area Coordinator  Arrange presentation for district officials and/or BOE 8

9. Current Year Low Fund Balance  For October, 2011 forecast, this will be FY 12  Fiscal Consultant will contact the district Treasurer either by phone or in person  Need to determine if district can complete the fiscal year without incurring a deficit  Consultant may offer services:  Forecast review with Treasurer  Financial Analysis  Arrange Staffing Analysis with Area Coordinator  Arrange presentation 9

10. Deficit in Year Two  For October, 2011 forecast, this will be FY 13  District will receive a letter from Columbus office requesting a plan to eliminate the projected deficit before it becomes reality  Plan due to Columbus office within sixty days of letter  Plan cannot include anything that is not yet approved  Levies  Items requiring negotiations  Advances from County Auditor 10

11. Deficit in Year Three  For October 2011 forecast, this will be FY 14  District will receive a letter from Columbus office notifying them of a projected deficit  Letter may not request a plan to be submitted, but encourages district to develop a plan to eliminate the projected deficit  District officials may contact ODE to discuss status or request services 11

12. When Is Fiscal Caution Declared Per ORC 3316.031, fiscal caution may be declared for any of the following reasons:  When ODE determines through the five year forecast that fiscal practices or budgetary conditions exist that could result in the declaration of fiscal watch or fiscal emergency  When the AOS reports those practices or conditions exist, or when the district shows a 2% – 8% deficit and decides not to place the district in fiscal watch  A district fails to submit a five year forecast or a proposed plan to eliminate a deficit upon request 12

13. Fiscal Caution Recovery Plan District: Column IColumn IIColumn III County: Projected DeficitProposal thatProposal for Date Submitted: ODE Financial - dateAddresses DeficitNext Fiscal Year REVENUES - OPERATIONAL FY11 FY12 1.010 General Property (Real Estate) 1.020 Tangible Personal Property Tax 1.030 Income Taxes 1.035 Unrestricted Grants-in-Aid/State Foundation 1.040 Restricted Grants-in-Aid 1.045 Restricted Grants-in-Aid (SFSF Fund 532) 1.050 Property Tax Allocation 1.060 All Other Operating Revenue 1.070 Total Operational Revenue $ - REVENUES - NON- OPERATIONAL 2.070 Total Non-operational Revenue 2.080 TOTAL REVENUE $ - EXPENDITURES - OPERATIONAL 3.010 Personal Services (Salaries & Wages) 3.015 Personal Services (Salaries & Wages)(SFSF Fund 532) 3.020 Fringe Benefits 3.025 Fringe Benefits (SFSF Fund 532) Sub-total -- Salaries & Benefits $ - 3.030 Purchased Services - Util., Cont. Other Ins. 3.040 Materials, Supplies & Textbooks 3.050 Capital Outlay (Equip. buses, etc.) 3.060 Intergovernmental 4.300 All Other Objects Total Operational Expenditures $ - EXPENDITURES - NON-OPERATIONAL Total Non-operational Expenditures 5.050 TOTAL EXPENDITURES $ - 7.010 General Fund Cash Balance - Beginning of FY $ - 7.020 General Fund Cash Balance - End of FY $ - 8.010 Encumbrances Unencumbered General Fund Cash Balance $ - UNEXPENDED RESERVATION OF FUNDS 9.010 Textbooks and Instructional Materials 9.020 Capital Improvements 9.030 Budget Reserve 9.070 Bus Purchase Reserve 9.08 Total Reservations $ - 10.010 Fund Balance June 30 For Certification of Appropriations $ - 13

14. Monthly Monitoring  Fiscal Consultant will provide a list of the reports necessary for the monitoring, including the SM-1 and SM-2 or similar spreadsheet  A specific time and date are established  Treasurer is expected to be present  On site monitoring may be bi-monthly if conditions allow  Consultant will review BOE minutes, financial reports, recovery plan, etc.  Monitoring report is reviewed by Columbus office to assure continued progress of the district 14

15. Services Provided by ODE  Consultation with district officials regarding the five year forecast and/or Benchmark Report  Financial Analysis  Arrange for a Staffing Analysis  Presentation to district administration, BOE, and/or community groups 15

16. What Can a District Do?  The ORC does not preclude a district from ending the fiscal year with a negative fund balance, however...  What other districts have done in the past:  Districts may request a cash advance from the County Auditor  Withhold certain payments, such as health insurance  MOU with Associations to delay payroll  Short term TAN for end of June, available for expenditure after July 1 to cover withheld payments  Ask their consultants for additional assistance and review 16

17. Final Thoughts on the Forecast  Line Item 1.045 which includes funds from Accounts 532 and 504 will soon be deleted  ODE has requested the addition of Line 1.015 to include County Auditor advances  Reminder to send in both the forecast spreadsheet and assumptions anytime a forecast is updated  Please review to ascertain the correct forecast is being submitted 17

18. ORC 3316.20 Solvency Assistance and Catastrophic Grants  Solvency Assistance Advances:  Only available to districts in fiscal emergency  Require Controlling Board approval  Based on the AOS ‘certificate of deficit’  To be repaid from Foundation payments over the next two years  HB 153 offers some minor changes 18

19. ORC 3316.20 Solvency Assistance and Catastrophic Grants  Catastrophic Grants:  Available when a district experiences an “unforeseen catastrophic event”  Grant is not repaid  ODE and OBM must request Controlling Board approval for the grant 19

20. Frequently Asked Questions Q. Can a district go into fiscal oversight without a deficit? A.Yes, if the district does not comply by submitting a forecast or recovery proposal, or if the forecast shows conditions exist that could cause the district to end up in fiscal emergency. Q.What can a district do to prevent fiscal emergency? A.Increase their revenue, decrease their expenditures, or a combination of both. Q.When should I contact ODE to discuss our financial situation? A.Anytime you have a question regarding the district’s financial status or forecast. Q.Is there any other information available, especially for a new treasurer? A.On the ODE website there is a document titled “New Chief Fiscal Officer/Treasurer’s Guide” which is intended to offer suggestions and advice for new personnel. 20

21. Your Fiscal Consultants Name:Office Phone:E-mail: Neil Allen(419) 668-2914neil.allen@ode.state.oh.usneil.allen@ode.state.oh.us Dale Burdett(330) 343-8875dale.burdett@ode.state.oh.usdale.burdett@ode.state.oh.us Bob Foss(330) 232-2835robert.foss@ode.state.oh.usrobert.foss@ode.state.oh.us Dean Horton(513) 770-4349dean.horton@ode.state.oh.usdean.horton@ode.state.oh.us Rob Miller(419) 523-5088robert.miller@ode.state.oh.usrobert.miller@ode.state.oh.us Jackie Osborne(740) 592-6622jacalyn.osborne@ode.state.oh.usjacalyn.osborne@ode.state.oh.us Doris Pearce(330) 898-2256dorpearce@aol.comdorpearce@aol.com Londa Schwierking(937) 570-0604londa.schweirking@ode.state.oh.uslonda.schweirking@ode.state.oh.us Janet Smalley(740) 947-7746janet.smalley@ode.state.oh.usjanet.smalley@ode.state.oh.us Pat Williard(740) 503-9869patricia.williard@ode.state.oh.uspatricia.williard@ode.state.oh.us Roger Hardin(614)466-5568roger.hardin@ode.state.oh.usroger.hardin@ode.state.oh.us 21