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TIER II TRAINING

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  1. TIER II TRAINING As required by A.C.A § 6-20-2204 Presented by Mike Mertens 2013

  2. Tier II Sanctions • Any school district or charter school that does not comply with these rules shall be identified as being in fiscal distress. • Any ESC shall be sanctioned by the State Board of Education. • Any licensed employee that provides false expenditure information may have his or her license revoked.

  3. Agenda • New Laws • Account Coding • Purchasing • Budget Management and Control • Employee Compensation • Fixed Assets • Fiscal Reporting • Audit and Ethics • Personnel Records • Issues of Local Concern

  4. New Laws of the 89th General Assembly • Unless new laws have an emergency clause or specified start date, they become law on August 16, 2013. • If they have an emergency clause, they become law on the date they are signed by the Governor.

  5. Act 8 of 2013 • Allows temporary license to be issued to spouse of an active duty military service member. • While completing the application process for full licensure.

  6. Act 75 of 2013 • Common Spring Break is not “permanent.” • 38th week of the fiscal year, which start each year with, “the first Monday after the first Sunday in July.”

  7. Act 413 of 2013 • Establishes an Accelerated Teaching Program which allows a method of obtaining a teaching license without traditional methods and includes: • Teach for America • AR Teacher Corps Program offered by UA. • Others approved by the ADE.

  8. Act 421 of 2013 • The AR State Board of Education may grant a waiver to districts for combining or embedding curriculum from two separate courses into one combined course. Ex: Oral Communications, Keyboarding. • Only applies in grades 5-12.

  9. Act 424 of 2013 • Aligns language for Kindergarten enrollment from other countries and removes obsolete language.

  10. Act 459 of 2013 • Master School Principal Program • Defines “high-need public school.” • Principals completing the Master principal Program are eligible for $25,000 salary increase for taking a principal’s job in a “high-need public school.”

  11. Act 511 of 2013 • Amends the Free Textbook Act • ADE will no longer develop an “approved” list. • Providers shall not charge AR schools a price that exceeds the lowest contracted price currently bid in another state. • Providers must sell products at some price for every school in Arkansas. • Providers must submit prices to ADE. • “Instructional materials selection committee.”

  12. Act 709 of 2013 • Amends TESS • Changes “categories” to “domains.” • Defines “evaluator” as a licensed administrator that is an employee of the school district. • Gives additional information and options for tested and non-tested areas. • Allows district-created external assessments measures including formative assessments.

  13. Act 1117 of 2013 • Extends the authority for the Athletic Trainer Task Force to meet the next 2 years. • AAEA, AREA, and AAA have representatives on this Task Force.

  14. Act 1230 of 2013 • Positive Youth Development Grant Program. $5,000,000 appropriation. Funds grants under the Positive Youth Development Program that was established by 2011 legislation.

  15. Act 1285 of 2013 • College and Career Coaches • To be administered by the ACTE in partnership with ADE and ADHE. • Enabling legislation – no funding.

  16. Act 1289 of 2013 • National Guard – students who join and are 17 while in the 11th grade. • May be granted additional absences in order to complete basic combat training, at the discretion of the superintendent.

  17. Coding –Who Cares?? • The Governor • The Legislature and the Taxpayers • Adequacy Education Subcommittee • Arkansas Department of Education • The Superintendent and Board • The Finance and Personnel Office Why? Comparisons, Transparency

  18. APSCN Data • Error rates……….required by law. • # of Journal Entries are tracked. • Code correctly………… • Check for accuracy……….

  19. Each District School Develop a Data Quality Program • Designed to: • Reduce errors. • Reduce the # of code changes. • Reduce down time and data errors. • Reduce cycle tardiness.

  20. Do We Have a Statewide Uniform System of Accounting? Yes, it is called the….. Arkansas School and Educational Cooperative Financial Accounting Manual (Handbook IIr²)

  21. Uniform System of Accounting • APSCN (AR Public School Computer Network) • www.k12.ar.us • If using a copy over 18 months old, DOWNLOAD A NEW ONE!!! • FMS listserv

  22. Basic Accounting Concepts • The basic purpose of any accounting system is to provide an organized and consistent method of managing funds. • Where do the funds come from…..and where do they go??? • Consistency is important when comparing financial data across multiple accounting periods. And……being able to identify the reasons for inconsistencies.

  23. Reasons for “Standard” Chart of Accounts • Consistent method of reporting. • Allows for valid comparisons of finances. • Improves the value of statewide financial information. • ALLOWS DISTRICTS TO IDENTIFY: TRENDS…..COMPARISONS….. and to make PROJECTIONS.

  24. REMEMBER….. • GUESSING IS NOT AN APPROVED METHOD OF DEVELOPING A BUDGET!!! and….. • The pieces have to fit!!!

  25. Indirect Cost Rate • Basically a reimbursement to local district for serving federal programs. • Budget it! Use it! (not required to use it) • ADE will tell districts what their indirect cost rate is each year through a Commissioner’s Memo.

  26. How to Help Ensure Accurate Coding of Property Taxes • To reconcile school district receipts for a calendar year to county collections for the same year, the month of January needs to be considered. • Districts receipts of property tax relief should agree, or be very close, to what the County received for the fiscal year.

  27. Reporting • Act 633 of 2011 requires county treasurers to report property tax data to ADE by January 31. • Penalty clause – 20% of reappraisal funds are withheld. • Districts are given time to review reported data for accuracy. Generally in March. • Why is accuracy important? Determines foundation funding, URT adjustment, etc.

  28. Diagram of a Budget UnitXXXX-XXXX-XXX-XXX-XX-XXXXX • Fund/Source of Funds (4) • Function (4) • Location (3) • Program (3) • Subject (2) • Object/Account (5)

  29. FUNDXXXX-XXXX-XXX-XXX-XX-XXXXX Each fund is created for a unique purpose 1000 series – Teacher Salary Fund 2000 series – Operating Fund 3000 series – Building Fund 4000 series – Debt Service Fund 5000 series – Capital Outlay/Dedicated M&O 6000 series – Federal Grants Fund 7000 series – Activity Fund 8000 series – Food Service Fund 9000 series – Fixed Assets Fund

  30. Building Fund • If part of the legal fund balance is being retained for future construction/renovation projects, it should be transferred to the Building Fund. An ADE recommendation! • School Board approval should be obtained whenever funds are transferred to or from the Building fund.

  31. Student Activity Funds • Policies relating to the establishment and maintenance of all activity funds should be in writing and should contain good cash handling and accounting procedures. • All activity fund supervisors and sponsors should receive a copy of these procedures. • YOU GET WANT YOU INSPECT NOT WHAT YOU EXPECT!!

  32. FUNCTIONXXXX-XXXX-XXX-XXX-XX-XXXXX • The Function describes the activity being performed when a service is provided or a material object is received. • 1000 series – Instruction • 1110 Kindergarten, 1120 Elementary, 1130 Middle/Junior, 1140 High School, 1150 Athletics, 1160 Activities, 1220 Resource Room, 1330 Business Education, 1360 Home Economics, 1910 GT • 2000 series – Support Service • 2122 Counselor, 2134 Health Services, 2219 Athletic Director, 2222 Library/Media Services, 2410 Office of Principal, 2580 Technology, 2600 M&O, 2700 Transportation

  33. LOCATIONXXXX-XXXX-XXX-XXX-XX-XXXXX Each campus in your district has a unique three-digit location code assigned by the ADE. Do you know yours? 000 District Wide 001 _____Elementary School 002 _____Middle School 003 _____ Primary School 004 _____ Junior High School 005 _____ High School

  34. PROGRAMXXXX-XXXX-XXX-XXX-XX-XXXXX The Program classification is a plan of activities and procedures designed to accomplish a predetermined objective or set of objectives. -200 Special Education -115 Athletics -116 Activity Funds (Extracurricular Activities) -270 Gifted/Talented -438 Alternative Education

  35. Program Codes • Any one program can involve revenues from multiple funds and source of funds and require expenditures from multiple functions. • The program code is used to track the total expenditures relating to any one program.

  36. SUBJECTXXXX-XXXX-XXX-XXX-XX-XXXXX The subject classification is used for local accounting purposes. This is not required. Can be used to identify courses (math, science, etc), sports, construction projects, mandated expenditures for elementary classrooms, etc.

  37. OBJECT (Account)XXXX-XXXX-XXX-XXX-XX-XXXXX • The object classification is used to describe the service or commodity obtained as a result of a specific expenditure. - 61000 series – Salaries (Employees Only) - 62000 series – Benefits (Employees Only) - 63000 series – Purchased Professional & Technical Services - 64000 series – Purchased Property Services - 65000 series – Other Purchased Services

  38. Requisitions • Use correct vendor. • Be thorough in description: who, what, where when. • Code correctly. • Code the expenditure for what you are buying. • Budget transfers.

  39. Purchasing/Disbursements • A Purchase Order(PO) - • is a commercial document issued by a buyer to a seller, indicating the type, quantities and agreed prices for products or services that the seller will provide to the buyer. • constitutes a legal offerto buy products or services. • specify additional conditions such as terms of payment, liability and freight responsibility, and required delivery date.

  40. Purchasing/Disbursements • A Purchase Order (PO) • is an official and bindingdocument issued to a vendor authorizing the expenditure of funds for goods and services • creates an encumbrance dedicating funds at the time the PO is originated by the purchasing department. • By using a PO, everyone involved in the purchase process can track the order by referring to the unique PO number as a standard reference.

  41. Purchasing/Disbursements A purchase order (PO) • documents what you’ll be buying from a vendor. It details what you have agreed to pay for, what the terms of the purchase are, and the amount you have agreed to pay. • is instrumental in tracking expenditures. • is a control feature in the accounts payable process

  42. Purchasing/Disbursements • Purchase orders are an internal control device. This is why it is important to execute a purchase order before the purchase is made. • A purchase order executed after the purchase is meaningless!

  43. Purchasing/Disbursements • Internal controls provided by a purchase order • Authorization to purchase • Terms under which purchase will be made (price, quantity, delivery, payment, etc.) • Designates funds to be used for payment • Evidence of compliance with purchasing laws and policies • Matched to invoice for payment approval

  44. Purchasing/Disbursements • Purchase orders are not official until signed by the authorized person. • Never alter a purchase order: You will be altering a legal document and auditors may consider this evidence of fraud. • Keep voided PO’s. • Any purchase made without a properly authorized PO, is not an obligation of the school, but is a legal obligation of the person placing the order.

  45. Purchasing/Disbursements • The billing address should be the BUSINESS OFFICE!! • This will ensure all invoices are paid in a timely manner. • Code accurately: The state is becoming more demanding and particular in its reporting requirements. Getting it right at the beginning saves a lot of work later!

  46. Purchasing/Disbursements • Getting things paid….. • Pay only on invoices, not statements • Original invoices are preferred over copies • Invoices that are not turned in on a timely basis means we cannot pay on time which means our account may be suspended and that hurts everybody!!! • Turn in all paperwork promptly to ensure that the payment is process in a timely manner. • Make sure all paperwork is submitted. Missing paperwork holds up payment

  47. Purchased Services • Always have vendor complete a W-9 prior to using their services.

  48. What are your Reimbursement Rates for….. • Mileage? (reimburse people or vehicles??) • Meals? (include tips, room service, valet parking?) • Overnight stays? (Actual cost or other?)

  49.   6-21-304. Manner of making purchases. • (a)  (1)All purchases of commodities by any school district, except those specifically exempted by § 6-21-305, shall be made as follows:  • (A)  In each instance in which the estimated purchase price shall equal or exceed ten thousand dollars ($10,000), the commodity shall be procured by soliciting bids, provided that the purchasing official may reject all bids and may purchase the commodity by negotiating a contract. If the purchasing official, after rejecting all bids, determines that the purchase should be made by negotiation, then each responsible bidder who submitted a bid shall be notified of the determination and shall be given a reasonable opportunity to negotiate; • (B) Bidder Assurance and Disclosure Forms- Now required on all solicited bids.  • (c)  Open market purchases may be made where the purchase price is less than ten thousand dollars ($10,000);

  50. Why Budget? • A budget is the financial map to achieve your district’s goals. • IT IS REQUIRED!!