1. School Finance 101 2015-2016 Presented by School Fiscal Services at LD Northwest:

2.  Introduction  School Funding Sources  Special Policies/Procedures  Budget System & Structure  Budget Process  Budget Management  Commonly Used Budget Reports - SFE Agenda 2

3. INTRODUCTION The objective of this training is to provide an understanding of school finance. This training will provide an overview of the various budget resources available, to help you manage your schools’ budget. 3

4. SCHOOL FUNDING The two primary funding sources are:  Unrestricted Funds  Restricted Funds 4

5. Local Control Funding Formula (LCFF) – General Fund School Program – Supplemental & Concentration Grants – Add-on Grants Donations Specially Funded Programs: – Categorical Programs (Title I) – Grants Special Education Cafeteria 5 UnrestrictedRestricted School Funding Resources

6. What is Local Control Funding Formula? 6  LCFF is California's new formula for determining the level of state funding provided to districts.  Districts will receive:  Base Grant  Base Grant Adjustments  Supplemental & Concentration Grants  Transportation & Targeted Instructional Improvement Block Grant  The LCFF consolidated the majority of the categorical programs, thereby eliminating the spending restrictions.  The Local Control Accountability Plan (LCAP) is the plan on how districts are held accountable for using LCFF funds and supporting targeted youth.

7.  Base Grant by  Grade spans: K-3, 4-6, 7-8, 9-12  Base Grant Adjustments  Additional funding for K-3 class size reduction (10.4%) and Career Technology Education (CTE) for grades 9-12 (2.6%)  Supplemental Grant  Base Grant times 20% of the Unduplicated Pupil Percentage (UPP*)  Concentration Grant  Base Grant times 50% of the UPP in excess of 55%  Add-ons  Targeted Instructional Improvement Block Grant (TIIBG)  Home-To-School Transportation *UPP-Percent of unduplicated pupil count to total enrollment (average of three fiscal years) 7 Components of LCFF

8. Variable: UNDUPLICATED PUPIL COUNT /PERCENTAGE What is Unduplicated Pupil Count? FRPM (Free and Reduced-priced Meal)-eligible EL (English Learner) Foster Youth A student can only be counted once even if he/she is identified as more than one of the categories above. It is also called Targeted Student Population (TSP). What is Unduplicated Pupil Percentage (UPP)? Percent of Unduplicated Pupil Count to enrollment How do we calculate UPP for LCFF purposes? Total 3-year UPC / Total 3-year enrollment; 3-year rolling average What part does it play in the LCFF? Generates the Supplemental and Concentration Grants 8

9. Definition – The portion of LCFF revenue that is based on ADA times the rates per ADA. This funds the operational costs of the District and can be spent on ALL students, employees, benefits, books and supplies, contracts, and infrastructures/facilities. Component: BASE GRANT 9

10. Component: SUPPLEMENTAL GRANT Definition – In addition to Base Grant; this is based on the UPP and is intended to be spent on the Targeted Student Population (TSP). 10

11. Component: CONCENTRATION GRANT Definition – In addition to Base Grant; this is based on the UPP that is in excess of 55% of enrollment; intended to be spent on the Targeted Student Population (TSP) 11

12. Component: ADD–ON FUNDING 12 Funding for the Targeted Instructional Improvement Block Grant (TIIBG) and Home-to-School Transportation Constantly Funded at the 2012-13 level; no COLA applied LAUSD add-on funding – TIIBG $460.4 million – Home-to-School Transportation $77.6 million

13. 13 Base Grant Supplemental Grant Concentration Grant The District receives a Base Grant for every student. The District receives a Supplemental Grant for every high-needs student. The District receives a Concentration Grant for every high-needs student over 55% total enrollment. Add on LCFF – How the State funds Districts

14.  The District’s full LCFF revenue, including Base, Supplemental, Concentration, TIIG and Transportation funds. 14 Calculating Revenue

15.  LCFF-generated revenue is divided by the District-wide Average Daily Attendance (ADA) to determine LCFF revenue rates.  Rates are calculated by grade band for: – Base – Supplemental – Concentration – Other revenue (including TIIG and Transportation) GradeBaseSupplementalConcentrationOther Funding K to 3 $6,736$981$2,193$1,878 4 to 6 $6,156$909$2,110$1,878 7 to 8 $6,696$1,001$2,481$1,878 9 to 12 $7,807$1,200$3,476$1,878 15

16.  Donors may specify how the funds should be spent.  Donors or principals designate dollar amounts and activities to be supported when filling out the Donation Form. – They should not indicate “Principal’s Discretion” or “School Determined Needs.” See Bulletin No.5895 dated September 3, 2013 (currently being updated) 16 Unrestricted Funds - Donations

17. The District allocates resources to schools in the form of positions using staffing ratios and other dollars in the General Fund School Program -13027. Schools will use their General Fund School Program funds to build a budget that complies with the needs of the local school Instructional and Operational Program. The budget must follow State and Federal laws, court orders, consent decrees, Personnel Commission Rules, collective bargaining agreements, and Human Resources guidelines. 17 General Fund School Program Allocation

18. These are the resources that are included in the General Fund School Program: AdministratorsInterscholastic Athletic Program Assistant Principals, Library Media Teacher Secondary Counseling Services (APSCS)Library Media Teacher Differential Assistant Principals,Longevity and Salary Differentials, Elementary or Secondary Certificated and Classified Clerical SubstitutesNurses Clerical SupportPsychologists CounselorsRegistration Advisor Time Custodial Supplies Teacher Activity Differentials CustodiansTeachers Day to Day Substitutes, TeachersTemporary Personnel Account (TPA) Financial ManagersTesting Coordinator Differential General SuppliesPhysical Education Teacher Incentive Instructional Materials Account Grant (PETIP) 18 General Fund Program Resources

19. 19  During Budget Development schools may not modify a position’s group/level for the purpose of capturing salary savings.  If schools close positions that are allocated to them, these positions cannot be re-purchased from Specially Funded programs.  If a school purchases positions in excess of the District’s staffing levels, the school is responsible to fund sufficient dollars to cover all benefited absences, substitute days, longevity/differentials, and the actual costs of those positions. General Fund Program - General Guidelines

20. 20  Each fiscal year during Budget Development, the District will reset school staffing patterns to match the District’s recommended levels of staffing.  The District will allocate positions with incumbents at the employees’ actual salaries. Schools will budget vacant positions at the District’s average cost.  Some schools may receive augmentations to their school’s budget for various resources. If a school receives an augmentation for a particular resource, the school may not exercise flexibility over the same resource allocated as part of the General Fund. Augmented resources must supplement, not supplant, General Fund resources. General Fund Program - General Guidelines

21.  10183 – Targeted Student Population  10400 – TSP Per Pupil School Allocation  10405 – TSP Parent Engagement  10397 – TSP-PPS  There are other resources that schools are receiving that are centrally funded(i.e. Nurse, PSA, Restorative Justice Coordinators, etc…) 21 LCFF Supplemental, Concentration and Add-on Grants

22. 22  Schools receive an allocation based on their unduplicated count of Free and Reduced-Price Meal (FRPM) eligible students, English Learners, and Foster Youth students under Program 10183.  The resources from this program must support the needs of low-income, foster youth, re-designated fluent English proficient and English learners.  Positions, services, and programs funded with Program 10183 must be aligned to the following goals as described in the District’s Local Control and Accountability Plan (LCAP): 100% Graduation, Proficiency for All, 100% Attendance, Parent, Community and Student Engagement, and Ensure School Safety.  Expenditures in Program 10183 must directly support increased or improved services for the three populations that generated the resources.  Parents/guardians, teachers, principals, administrators, other school personnel, bargaining units of the school district, and pupils must be consulted in the development of the District’s LCAP per Education Code 52060 (g). 10183 – Targeted Student Population

23. 23  If schools close norm-based core program positions that are allocated to them in Program 13027, these positions cannot be re-purchased from the Targeted Student Population program..  If a school receives an augmentation for a particular resource, the school may not exercise flexibility over the same resource budgeted as part of the Targeted Student Population program.  If a school purchases positions in the Targeted Student Population program, the school is responsible to fund sufficient dollars to cover all benefited absences, substitute days, longevity/differentials, and the actual costs of these positions.  Schools will budget vacant positions at the District’s average cost.  Core services must be budgeted in the General Fund School Program before purchasing additional resources in the Targeted Student Population program. Program 10183 – General Guidelines

24. 24  Schools may receive an allocation based on the “equity-based” index or “student Index”.  The equity based index is calculated by the sum of English learners, low Income, foster Youth, and homeless students divided by the total number of students.  The allocation of these resources may be in the form of positions and/or instructional materials.  The resources under TSP –Per Pupil School Allocation (Program 10400) must be aligned to the following goals as described in the District’s Local Control and Accountability Plan: 100% Graduation, Proficiency for All, 100% Attendance, Parent, Community and Student Engagement, and Ensure School Safety.  Parents/guardians, teachers, principals, administrators, other school personnel, bargaining units of the school district, and pupils must be consulted in the development of the District’s LCAP per Education Code 52060 (g). 10400 – TSP Per Pupil School Allocation

25. 25  Positions budgeted in the TSP-Per Pupil School Allocation program are budgeted at the District average.  The resources in TSP-Per Pupil School Allocation program 10400 are predetermined using the student index file. Schools do not have flexibility to repurpose these funds.  Funds in this program are scheduled to carryover, however, any positive ending balance in Program Code 13027 will be used to offset the negative ending balances in program 10400. Program 10400 – General Guidelines

26.  Categorical Funds – resources allocated to supplement the core instructional program (i.e. must supplement and not supplant). Allocated based on student characteristics such as Low Income and English Language Learners.  A Grant represents funding awarded to a school. It is used to document, control and report on the results of an agreement made between a sponsor and the school for a specific use. Some examples are: Federal and State Grants Smaller Learning Community Grants California Partnership Grants 26 Restricted Funds – Specially Funded Programs

27.  Special Education Funds – resources are allocated based on student needs as indicated by Individual Education Plans (IEPs).  Cafeteria Funds – resources are allocated to operate the District’s food service program. These funds are centrally administered. 27 Restricted Funds – Specially Funded Programs

28. SPECIAL POLICIES/PROCEDURES  Special Program Policies/Procedures  Zero Basis Positions  Carryover  Pre-Norm Growth  Norm Day Settle Up  Pending PayScale Level Advances 28

29. During Budget Development, schools may use projected carryover to fund positions. Schools may utilize this process until the carryover is posted in the school’s General Fund School Program. Schools may also purchase zero-basis positions with grant and/or donation checks. Once carryover is available these positions can be funded. 29 Zero Basis Positions

30. The carryover policies may vary each year based on the District’s financial condition. Schools are encouraged to expend their entire allocations on the students that generate the dollars, without over-drafting the accounts. Any positive ending balance in program code 13027 will be used to offset the negative ending balances in other programs such as 10397, 10400, 11103, 11141, etc. Positive ending balance in program 10397 will carryover in Pending Distribution. Positive ending balances in program 10400 will carryover. 30 Carryover

31. Schools must complete and submit – a Carryover TSP 10400 School LCAP plan to describe how they will use these funds and – a manual Budget Adjustment Request (BAR) to their Local District’s Title I Coordinator. The LCAP plan template and list of allowable items were sent to principals on September 17, 2015. The deadline for the submission of the documentation is on or before November 2, 2015. The funds will remain pending distribution until a plan and a BAR are submitted. 31 Carryover - Program 10400

32. Prior to Week 4, if a school has confirmed growth, the school can use their General Fund School Program dollars in 13027 to pay for a contracted pool teacher. If this growth is later substantiated, based on Week 4 or Norm Day enrollment counts, the school will be reimbursed with a growth positions. When a school has confirmed growth but does not have sufficient funds to cover a contracted pool teacher, a growth request may be submitted. The school should submit Classification Report (s) for official capture dates and Statistical/SMASR to the Fiscal Services Manager for preliminary review. The request will be forwarded to the Local District Superintendent for approval and subsequently to Budget Services for the creation of the limited growth position. If Norm Day enrollment data substantiates the growth, the position funding with be extended to the entire fiscal year. If not, the position will be closed as of Norm Day. 32 Pre-Norm Growth

33.  By Norm Day, average daily attendance data for the 2015-16 school year will be available. The District will then update your school’s projected ADA for the 2015-16 school year using your 2015-16 norm day enrollment counts and 2014-15 ADA percentage. Using this new projected ADA, and the per pupil rate from Budget Development, the District will calculate a new Norm Day allocation for your school. This allocation will be compared to your school’s allocation from Budget Development.  In addition, your school’s projected expenditures will be updated to reflect staffing ratios and resources based on Norm Day enrollment counts. The revised expenditures will be compared to your projected expenditures from Budget Development. The District will implement increases or decreases to your school’s General Fund School Program Allocation, and your allocation in Program 10397 – TSP-PP if applicable. 33 Norm Day Settle Up

34.  The District will determine the actual costs of assignments after the Human Resources Division and Personnel Commission have processed Norm Day assignments.  Budget Services will then identify the net difference between budgeted and actual costs at the whole school site.  If the net actual cost of positions is higher than budgeted, then the District will adjust positions to their respective incumbents’ pay scale levels accordingly.  If the net actual cost of positions is less than budgeted, then the District will provide the Home Fund Center with the difference in dollars. 34 Pending Pay Scale Level Advances

35. BUDGET STRUCTURE  Budget Structure  Cost Center  SACS Fund  Functional Area  Commitment Items 35

36. For time reporting and budgeting, we use Standardized Account Code Structure (SACS) to represent school locations and specific programs in SAP. 36 Budget Structure

37. Cost Center is composed of 7 digits 1123401 : 1 - 4 digit Location Code - 01 Format: 1 - 4 digit Location Code - 01 Cost Center begins with a 1 followed by the 4-digit Location Code and ends with (2) additional digits for sub-location designation, such as magnet centers and small learning communities Magnet Cost Center - 1123402 (subsequent numbers if more than one Magnet location) 37 Cost Center

38. SACS Fund consists of 3 digit SACS Fund & 4 digit SACS Resource 010-0000 Fund Resource Fund - The fund field is used when any accounting transaction is recorded. 010 – General Fund Resource - The resource field allows LEAs to account separately for activities funded with revenues that have restrictions on how the funds are spent (e.g., NCLB, Title I). 0000 – Unrestricted; 3000 – 5999 – Federal Resources Restricted; 6000 – 7999 – State Resources Restricted; 8000 – 9999 – Local Resources Restricted 38 SACS Fund

39. Goal - first 4 digits in the functional area. It groups costs by population, setting, and/or educational mode 0000 - Undistributed 1110-Regular Education, K-12 5730-Spec Ed, Pre-School Stud Function - the middle 4 digits in the functional area. It describes activities or services performed to accomplish one or more objectives in the Goal. 1000-Instruction 2700-Adminstration Program Code - last 5 digits of the functional area General Programs start with 1, e.g., 13027=General Fund Categorical Funds and Grants start with 7, e.g., 7S046=Title I Program Functional Area is composed of 3 groups of numbers 1110-1000-13027 39 Functional Area

40. The commitment item, general ledger and the cost element are equivalent or interchangeable expenditure codes that represent all the things, whether goods or service, that may be purchased. Examples are salaries, employee benefits, supplies, contracts and equipment. Commitment Item/General Ledger Account Is composed of 6 digits 430010 40 Commitment Item/General Ledger Acct

41. 100000 - Certificated Salaries 110001-Regular Teacher Salary 110004-Supplemental Teacher Salary 190001-Other Certificated Salary 200000 - Classified and Unclassified Salaries 210001-Instructional Assistants 240001-Office Personnel Salary 300000 – Benefits 340101-Health/Welfare-Certificated 340201-Health/Welfare-Classified 41 Commitment Item/General Ledger Acct

42. 400000 – Other Expenditures/Goods 430001-General Supplies 430010 – Instructional Material (IMA) 430098 – Instructional Material Account Adj/Potential Funding Variance 430009 - Pending Distribution 430077 – Negative Allocation 42 Commitment Item/General Ledger Acct

43. 500000 – Other Expenditures/Services 520002-Travel/Conference Attendance 580012-Curricular Trips 600000 – Capital 620001-Buidings/Improvements to Buildings 700000 – Administrative Charges 731001-Indirect Support 43 Commitment Item/General Ledger Acct

44. BUDGET PROCESS  Budget Process  Overview of School Budgeting  School Budgeting - Calendar  Budget Planning & Development 44

45. During the planning and development process, school leaders and stakeholders develop budgets that reflect the needs of their students. Budget Planning & Development Budget management includes payroll (time-reporting), purchasing, monitoring, and realigning balances. Budget Management 45 Overview of School Budgeting

46. Management Planning Development JuneMarch July January Planning 46 School Budgeting Calendar

47. Analyze student achievement and school performance data Adjust goals based on data findings Develop instructional and operational strategies to achieve goals Identify resources (such as personnel, time, materials, and dollars) needed to support strategies Prioritize investments Align all budgeted funding sources, both restricted and unrestricted, to those priorities Communicate with and involve stakeholders in instructional and budgeting decisions 47 Budget Planning and Development

48.  E-Cast Enrollment Projections  Allocations are based on E-Cast projections and Board Approved Staffing Ratios  Allocations are adjusted with Norm Day Actual enrollment.  Meet with school site stakeholders  Prioritize needs  Implement budgets in SFE  Obtain all school site approvals and signatures  Meet with your Fiscal Specialist on your Budget Development appointment date 48 Budget Development Process

49.  Budget Monitoring  Budget Availability  School Spending Report  Control Sheets  Budget Adjustment Request 49 BUDGET MANAGEMENT

50.  Schools are expected to spend within their allocations. If schools end the year with negative balances, it will impact next Fiscal Year’s budget. For example: If you overspend Program 13027, the negative amount will carryover into the next fiscal year.  Control Sheets should be maintained to avoid overspending.  Other sources of budget reference: Budget Availability Report School Spending Report UNDERSPENDING OVERSPENDING Monitoring is important… 50 Budget Monitoring

51.  A resource that can be used to monitor your school’s budget.  It shows balances by program and commitment item.  Shows the school’s Funding Allocations, Commitments (Encumbrances) and Actuals (Expenditures).  Data is downloaded from SAP (overnight cycle).  Requires a single sign-on user id. 51 The Budget Availability Report

52. 1123401 52 Sample Budget Availability Report

53.  Provides schools with an easy to use report that helps them monitor and manage their spending.  Available at each school’s Portal Page.  You can search for school Portal Pages here: http://notebook.lausd.net/schoolsearch/selector.jsp http://notebook.lausd.net/schoolsearch/selector.jsp  The report is populated with data from SAP and updated nightly.  No sign-on is required. 53 The School Spending Report

54. Cost Center and school name will appear here. 1234 SCHOOL A Program and commitment items will be automatically loaded. No input is necessary. 54 Sample School Spending Report

55.  A control sheet is a tool that a school can use to keep track of expenditures and available balances.  It can be maintained manually or in an Excel (hyperlinked) spreadsheet. Balances Budget Adjustments ExpendituresAllocations 55 What is a Control Sheet?

56.  To keep track of how much is spent and how much is available to spend.  As an aid, to prevent overspending, which may lead to a reduction in next year’s budget.  To help with forecasting expenditures, which allows schools to identify unspent balances that may be used for instructional priorities.  If used correctly, control sheets are the most timely and accurate budget reference available to schools. 56 Why Are Control Sheets Used?

57. Sample Non-Salary Detail Sheet Sample Salary Detail Sheet 57 Sample Control Sheets

58. Non-Salary Control Records: Expenditures and Other Transactions  Instructional Material (IMA)  General Supplies  Imprest Charges & P-Card Expenditures  Budget Transfers & Additional Allocations  Online Shopping Cart Purchasing  Contracts (Toshiba copier, instructional services, etc.)  Conference Attendance  Curricular Trips  Alterations and Improvements (A&I) 58 Non-Salary Control Records

59. Salary Control Records: All Non-Position Salary Items  Day-to-Day Substitutes  District-Sponsored Training Rate  Teacher X and Z Time  Custodial & Clerical Overtime and Relief  Teacher Assistant and Instructional Aide Relief  Professional Development Teacher – Regular  School Supervision Aides  Community Reps 59 Salary Control Records

60. Before Submitting a Budget Adjustment Request (BAR) Stakeholder Engagement  Categorical program Budget Adjustments require School Site Council approval.  The Single Plan for Student Achievement (SPSA) may need to be updated.  General Fund School Program (13027) Budget Adjustments should also be discussed with stakeholders. Check available balances  Are there funds available to be transferred?  Use the Budget Availability Report  Control Sheets will have the most accurate balances, as long as they’ve been regularly updated. 60 Budget Adjustment Requests

61. 1. School Site Council approves changes to budget, if applicable 2. School prints School Budget Signature Form (before WIP) 3. Verify budget availability 4. School enters approved adjustments in SFE 5. Administrators submits for approval on- line 61 Budget Adjustment Request Process

62. 6. School prints School Budget Signature Form (WIP version ) 7. School submits required documents to Fiscal Specialist. (Original Signature, Justification form, SPSA or update) 8. Fiscal Specialist checks budget availability 9. Fiscal Specialist forwards documents for Local District approvals 10. Fiscal Specialist submits for final approval 62 Budget Adjustment Request Process

63. SAMPLE 63 Budget Adjustment Request Sample

64. 64 Programs Available in Schools Front End

65. 65 A manual Budget Adjustment Request (BAR) is needed for:  Program codes that are not in SFE  Restricted items that require additional approval SAMPLE Manual Budget Adjustment Request

66. Minimum Required Data for a manual Budget Adjustment Request: Non-Positions:  Fund Center Name & Cost Center  Program Code Name & Program Code  Specific Item Description  Start & End Date  Amount ($)  Reason 66 Manual Budget Adjustment Request

67. Minimum Required Data for a manual Budget Adjustment Request: Positions :  Fund Center Name & Cost Center  Program Code Name & Program Code  Specific Item Description  Start & End Date  Amount ($)  Position Status  Position Control Number (existing positions)  Basis  Hours Per Day  Days Per Week  Funding Percentage  Reason 67 Manual Budget Adjustment Request

68. SCHOOLS FRONT END (SFE) REPORTS  Commonly Used Budget Reports  Estimated Rates by Budget Item  School Discretionary Program Report  School Resource Allocation  Staffing and Resources 68

69.  Estimated Rates By Budget Item displays estimated costs for Budget Items by Program Codes.  The report has the following fields:  Budget Item Description  Budget Item  Program  Program Description  Budget Item Category  Commitment Item  Position Attributes  Cost 69 Commonly Used Budget Reports - SFE

70. SAMPLE 70 Commonly Used Budget Reports - SFE

71.  School Discretionary Programs Report displays a summary by program grouping (Categorical or Regular programs) and includes budget item description, total cost, and full time equivalent of positions for School Front End program codes. 71 Commonly Used Budget Reports - SFE

72. SAMPLE 72 School Discretionary Programs Report Commonly Used Budget Reports - SFE

73.  School Resource Allocation displays detail of the school’s allocation amount by program.  The report has the following fields:  Program  Program Description  Rate  Participants  Allocation 73 Commonly Used Budget Reports - SFE

74. SAMPLE 74 Commonly Used Budget Reports - SFE

75.  Staffing and Resource summarizes the resources a school receive.  The report has the following fields:  Header  Description  FTE  Total Cost 75 Commonly Used Budget Reports - SFE

76. SAMPLE 76 Commonly Used Budget Reports - SFE

77. Budget Services and Financial Planning website http://achieve.lausd.net/Page/431 http://achieve.lausd.net/Page/431 School Fiscal Services website http://lausd.schoolwires.net/Page/794 http://lausd.schoolwires.net/Page/794 Local District Northwest Business Services webpage http://achieve.lausd.net/Page/8506 77 Resources

78. THANK YOU! 78