School Finance Module

The Masters in Governance eGovernance program will deliver a highly effective learning opportunity in a flexible and convenient format. The school finance module is the second online course. Featured in video segments ranging in length from three to 40 minutes, board members and superintendents are taken through self-paced overviews of the roles and responsibilities of the school board as it pertains to the area of school finance.

This is a "stand-alone" course and does not fulfill the requirements of the Masters in Governance Program.

Registration fee: $150. Register today!

Lesson descriptions

Lesson 1: Board’s role in school finance
The responsibility of the board is to ensure that the beliefs, vision and priorities of the community become the basis for all budget decisions. Building board confidence in budget decisions requires an understanding of the five governance responsibilities: setting the direction, establishing structure, providing support, ensuring accountability and demonstrating community leadership. Ultimately, the board is responsible for focusing resources to accomplish district priorities and ensure the success of all students. (Time: 9 minutes 59 seconds)

Lesson 2: Budget cycles
There are four budget cycles in a school district and each cycle has its own calendar. The board needs to understand the nature of each concurrent budget cycle and how they interface. This lesson explains each of the four budget cycles in detail. The first budget cycle refers to closing out last year’s budget. The second cycle speaks to managing the current year’s budget; while the third cycle is building next year’s budget. The final or fourth cycle is planning a future budget that is two years out. (Time: 5 minutes 46 seconds)

Lesson 3: Budget process
As described in lesson two, there are four concurrent budget cycles that must be addressed. Each cycle requires a separate budget calendar for planning, development, monitoring and evaluation. This lesson defines the activities that occur in each budget cycle and how the board must carefully consider competing budget priorities from a variety of stakeholders. Further, it addresses how the board must convert priorities into measurable objectives while maintaining the fiscal health of the district. (Time: 6 minutes 33 seconds)

Lesson 4: Factors that impact the budget
Budget planning requires a clear understanding of the rationale behind the district’s budget assumptions. Furthermore, board members should understand that there is very little control over the revenue stream provided by the state. Additionally, there are several factors that influence the health of the budget. These factors include the ups and downs of the state revenue stream, the impact of enrollment projections, collective bargaining contracts, escalating health and welfare benefits and other local circumstances unique to the district. (Time: 11 minutes 41 seconds)

Lesson 5: Budget reserves
California requires all districts to have a minimum reserve level, usually between one and three percent depending on the size of the district. However, the average district in California has a budget reserve between nine or 10 percent. Boards must address what constitutes a “healthy” reserve and what are the determining factors that a district should consider when establishing its reserve. (Time: 6 minutes 31 seconds)

Lesson 6: Budget revenue
School districts are primarily supported by state taxes, local taxes and property taxes. For most districts in California, revenues are derived from five major sources: a state revenue limit calculation based on average daily attendance, lottery funds, special purpose funds, local property taxes or the federal government. This lesson reviews each funding source in detail and discusses how some revenues may be limited for specific uses. These funding streams set the budgetary parameters by which a district can develop a financial plan that reflects its goals and priorities. (Time: 4 minutes 49 seconds)

Lesson 7: Ending balance
Budgets are a combination of revenues and expenditures that result in multiple ending fund balances. This lesson illustrates how positive ending balances provide flexibility and insulate the district from unexpected changes that may occur during the fiscal year; and, how negative ending balances will have an adverse affect on the budget over time. Ending balances measure how well the district is balancing its resources and its expenditures. Boards must understand the difference between restricted or unrestricted ending balances and the possible implications on future budget planning. (Time: 3 minutes 28 seconds)

Lesson 8: The chief business official
Every district has a designated budget professional sometimes known as the chief business official. This individual is responsible, not only for the financial transactions of the district, but also the business affairs of the district. This lesson discusses the skill sets and experience needed for a CBO to successfully perform his or her role. In addition, it describes the various supervisory roles the chief business official serves from transportation, maintenance, and food services, to computer services. However, the primary function of the chief business official is to maintain the solvency of the district. (Time: 4 minutes 03 seconds)

Lesson 9: Capital budgets
Ideally, every school district should have a long-range capital plan and a facilities master plan that represents the district’s long-term capital needs. Capital budgets are important because if the district doesn’t have a capital budget, it doesn’t have a long-term funding source. This lesson explains how capital budgets work and discusses funding sources for the development of your capital plan, namely general obligation bonds, state and local deferred maintenance funds, developer fees, Mello Roos, state bonds, parcel taxes and certificates of participation. (Time: 12 minutes 46 seconds)

Lesson 10: Quality of the budget and public communication
This lesson is comprised of a panel of budget experts discussing how the board should judge the overall quality of the budget. The experts address key questions such as: What makes a good budget? Is it balanced? Are your priorities funded? Are you deficit spending? What is an adequate reserve? Is the budget user friendly? The panel will also discuss how to read the budget and the importance of communicating the budget to stakeholders. (Time: 28 minutes 17 seconds)

Lesson 11: The audit report
The audit report helps maintain transparency with the community and provides a snapshot of how well the district is utilizing its resources. The audit report is an important part of a board member’s toolkit for monitoring the district’s budgets and maintaining fiscal integrity. It is prepared by an independent certified public accounting firm and contains findings and recommendations which should be analyzed and addressed. This lesson delineates the three types of opinions a district may receive: unqualified, qualified and adverse. Furthermore, it explains how to read the audit report and discusses the role of the audit committee. (Time: 7 minutes 29 seconds)

Lesson 12: Interim report and budget monitoring
The board has two valuable budget tools available to fulfill its fiscal oversight responsibility. This lesson describes the structure of the first and second interim reports. It explains the three certification options, e.g., positive, qualified or negative. This lesson also addresses the oversight role of the county office of education as outlined in Assembly Bill 1200. It also assists the board in reading and analyzing the interim reports and formulating clarifying questions for professional staff. (Time: 7 minutes 05 seconds)

Lesson 13: Finance and negotiations
The negotiations process is one area that can pose a significant challenge for school districts. Collective bargaining isn’t only about money; it’s about working conditions, maintenance of health benefits, class sizes and retirement benefits. Changes in these areas will have an effect on the district’s bottom line. This lesson explains how to prepare for negotiations and the importance of establishing clear priorities. It further emphasizes the importance of preparing accurate financial information prior to negotiations and how to openly share this information with bargaining units and stakeholders. (Time: 10 minutes 16 seconds)

Lesson 14: Crisis indicators and common pitfalls
There are conditions that exist which may lead the district to financial distress. Joel Montero, chief executive officer, Fiscal Crisis and Management Assistance Team, discusses fiscal indicators that can lead a district into trouble. He addresses what the board should look for, including a lack of leadership, ineffective management systems, inability to assess external forces on the budget, inadequate budget development, poor position control and limited budget monitoring. (Time: 40 minutes 38 seconds)

Lesson 15: Governmental Accounting Standards Board
Funding retiree health and welfare benefits has been a major issue for many employers in both the private and public sectors. Because few employers are able to fund these benefits in advance, many, if not most, use the pay-as-you-go method. This discussion addresses Governmental Accounting Standards Board 43 and 45 and how they impact school districts. GASB directs state and local governments to account for and report other post-employment benefits that are separate from pension benefits. These reporting and accounting requirements were created to help districts realize how past negotiated retiree benefit commitments affect current and future budgets. (Time: 19 minutes 50 seconds)