Preparing Your Budget to Meet the ASBO Meritorious Budget Award Criteria Illinois ASBO Annual Conference May 20, 2010
Presenters • Barrington CUSD 220 – 847-842-3500 • Gary Frisch CPA – Chief Financial Officer • MBA Reviewer – ASBO • George Lingel • PMA Financial Network, Inc. 630-657-6400 • Vladimir Dragosavljevic
MBA Program • What is the MBA? • Best Standards in the Industry • Feedback from Reviewers – Experts • MBA Improves Community Perceptions • Toot Your Own Horn
What’s in it for the Business Official • Build Solid Skills • Developing and Analyzing Budgets • Preparing Budgets using State of the Art Criteria • Feedback – Continuous Improvement • Recognition • Community • Board • Superintendent • Marketability
What is in the MBA? • Four Sections • Introductory Section • Organizational Section • Financial Section • Informational Section • Six Page Criteria Checklist: http://www.asbointl.org/index.asp?bid=4415 • Criteria • What does an outstanding presentation need to have?
The MBA Criteria • Makes it relevant • Uses the best standards in the industry • Shows relevance to the classroom • Uses narrative, charts, graphs and tables • Accommodates different levels of interest • Executive Summary to Greater levels of Detail
Introductory Section • Is an executive summary of the organizational, financial and information sections. • It is meant to be a stand alone document which tells the complete story • It tells the story in narrative, numerical and graphical forms.
Organizational Section • Information about your school district • Significant Financial and Budgetary Policies • Goals and Objectives of the Organization • Description of the Budget Process and the management of the Budget
Financial Section • Presentation of all governmental funds • Use a Pyramid Approach • Describe significant revenue sources and significant expenditure categories • Describe District Goals and Objectives that are not met
Financial Section • A pyramid approach should be used: a summary of all funds, followed by the presentation of individual funds • Optional: The presentation may be followed by program, location, and/or administrative unit budgets
Informational Section • Information on taxes and assessed valuation • The Budget’s effect on the individual taxpayer • Three years of financial forecasts • Student enrollment • Personnel resource allocation • Student performance measures
Benefits of the MBA • Business Manager’s Perspective • You will become more informed on all aspects of your Organization including instructional performance • You will be ready for any question from the public • You will have one document that contains everything from financial forecasts to enrollment projections to staffing allocations • You will have earned credibility with your Board and Community • Recognition by ASBO and your peers
Benefits of an MBA • Positively viewed by ratings agencies • Standard and Poor’s Financial Management Assessment (FMA) areas of analysis • Revenue and Expenditure Assumptions • Budget Amendments and Updates • Long-term Financial Planning • Long-term Capital Planning • Investment Management Policies • Debt Management Policies • Reserve and Liquidity Policies
Invest in Yourself • Your Document is Reviewed by a Certified MBA Reviewer • What does an MBA Reviewer look for? • Introductory section – An Executive Summary “liftable” • Organization section – Significant Board Policies • Financial section – Pyramid Approach • Information Section – Tax Information & Projections • Feedback – Constructive Criticism - meant to improve your budget for next year!
Next Year Submittal • You must address the changes listed in the MBA review letter from last year in a separate letter. • New reviewer will look at the MBA document to see if the suggested changes have been made or reasons why a change cannot be made. • A reviewer will not be allowed to evaluate budgets from within their own state.
Common Pitfalls • The Introductory section is not complete – It should tell the budget story without the need for the reader to look at the other sections. • Financial Section does not use the pyramid approach. • Beginning and Ending Fund Balances are missing.
Reviewer Tips • Use the MBA Criteria Checklist and the Corresponding MBA Criteria Narrative to ensure you have met all the required criteria • Use a separate letter to explain why one or more of the criteria could not be met • Proof read your document • Use the same font through-out the document
Improve Community Perceptions • Demonstrating a Comprehensive Fiscal Perspective • Demonstrating Transparency • Demonstrating Long Range Planning
Benefits from a Financial Perspective • Given the current limited market for bond insurance, underlying credit ratings have become much more important for districts issuing debt • High Credit Scores can be linked to the same criteria listed in the MBA. • Strong Board Policies and Five Year Forecasting
Final Thoughts • Strive for Excellence • Invest in Yourself • Improve Community Perceptions
Application Process • Submissions are due 90 days after budget adoption • Electronic or paper copies of the budget • Application Form • Criteria Checklist • Fee – ASBO member discounts, sliding scale based upon district size
Application Mentors • Gary Frisch - 847-842-3514 email@example.com • George Lingel -847-833-7899 firstname.lastname@example.org • Vlad Dragosavljevic -630-657-6400 x 6410 email@example.com
Questions And Discussion