FINANCIAL MANAGEMENT
This chapter reviews Grape Creek Independent School District's (GCISD) financial management in the following sections:
- A. Accounting and Financial Management
- B. Budget Process
- C. Asset and Risk Management
- D. Shared Service Opportunities
D. SHARED SERVICE OPPORTUNITIES
The position of the school district business manager has evolved into a profession that is separate and distinct from that of the superintendent or principal. As a result, superintendents and principals in small school districts, who have been involved in school district operations, are finding it increasingly difficult to keep up with the rapidly changing requirements.
In addition, small school districts are unable to match the salaries of large school districts for highly trained and experienced business office personnel. Thus, these districts have more problems adjusting to changes in school finance and budgeting laws and in maintaining efficient business operations.
There are increasing reports of mistakes made by small district personnel that cause the district extreme hardships. A simple PEIMS reporting mistake can impact a district's funding for a number of years.
All school districts are required to perform an array of business services. In some manner, the business services listed in Exhibit 3-14 must be performed by all school districts.
Exhibit 3-14 Source: TSPR.
Business Services Performed in Most School Districts
- Accounting
- Preparation of Financial Report
- Purchasing
- Investment of School District Funds
- Invoice Processing
- Cash Flow Analysis
- Bank Reconciliations
- Food Service Accounting
- Fixed Asset Management
- PEIMS Reporting
- Purchasing
- Board Reporting
- Payroll Processing and Benefits Reporting
- State Aid Calculations
- Grant Reporting
- Student Enrollment Projections
- Budgeting
- Student Activity Fund Accounting
- Personnel Reporting
- Long Range Budgeting
- Managing and Supervision
- Tax Assessing/Collecting
How well districts are able to accomplish these complicated tasks depends on the knowledge and expertise of the personnel that districts are having increasing difficulty hiring.
FINDING
Each of the five small districts in Tom Green County are uniquely challenged to provide the wide array of business services required of school districts in Texas.
In GCISD, the director of Business and Finance and the superintendent jointly have ultimate responsibility for many of the financial aspects of the district's operations. Supporting the director of Business and Finance are the finance clerk and the payroll clerk.
In June 1999, Regional Education Service Center XI (Region 11) in Fort Worth submitted a proposal to TEA for "Improving Texas School District Financial Management." One component of the proposal was the development of a model business support services cooperative to help smaller school districts and charter schools to perform any and all business functions. As part of this effort, Region 11 researched the use of cooperative financial services in and outside of Texas.
After reviewing and analyzing the various models from various states, Region 11 found six workable models for providing business services in small school districts and charter schools in Texas, which are summarized below:
Model I - Business Services Provided by School Districts or Charter Schools
- School districts or charter schools maintain their own business services departments.
- The Regional Education Service Center (RESC) in the area perform business services as needed using RESC staff, retirees or other contracted groups or individuals.
Model II - Business Services Provided by Each RESC
- School districts or charter schools contract with the RESC to perform all business services.
- Business services provided by the RESC are full time, part time, interim, or "as needed."
- RESC staff, qualified retirees, or the use of an incubator to directly train school district employees performs business services.
Model III - Business Services Provided on a Multi-Regional Basis
- School districts or charter schools contract with the RESC to perform business services.
- This model assumes that four "Mega-RESC's" will be appropriately staffed to fully perform all business services.
- Each multi-regional RESC will provide services to four other RESCs. These smaller RESCs may also provide some business services or may provide interface services for school districts or charter schools in their regions.
- Business services provided by the RESC are full time, part time, interim or "as needed."
- The RESC staff, qualified retirees, or the use of an incubator to directly train school district employees perform business services.
- This model tracks the original Multi-Regional Processing Centers that provided data processing services in the early 70s.
Model IV - Business Services Provided by Shared Personnel
- School districts or charter schools co-op business services between and/or among each other.
- These school districts or charter schools approve an inter-local governmental agreement, which specifies the responsibilities of the cooperative and the responsibilities of each of the school districts with the cooperative.
- The RESC can provide technical assistance to the cooperative including development of the agreement, housing and incubator, hosting and assisting with the cooperative board meeting, etc.
- A fiscal agent would be appointed (this could be one of the member school districts or the RESC), and the cooperative's employees would become employees of the fiscal agent.
- The incubator could be provided by the RESC or by the cooperative.
Model V - Business Services Provided by Shared Personnel (Minimum Enrollment Required by the State)
- School districts or charter schools co-op business services between and/or among each other in order to reach the minimum enrollment required by the state.
- The RESC could provide technical assistance, incubator training, or perform fiscal agent duties.
- This model is the same as Model IV; however, it requires a certain minimum aggregate enrollment for the participating school districts or charter schools.
Model VI - Privatized Business Services
- School districts or charter schools purchase business services from a private company.
- The RESC could provide technical assistance and/or incubator services in order to train school district employees.
Clearly the scenarios can be "mixed and matched" in any combination or format desirable to school districts, charter schools and service centers. The use of these models, in conjunction with business services provided by RESCs throughout the state, could be a viable option for school districts and charter schools to procure professional business services in a cost-efficient manner.
Recommendation 20:
Form a committee of superintendents, Regional Education Service Center representatives and representatives from the Texas Education Agency to explore the opportunities for shared financial services.
While this recommendation is directed toward districts in Tom Green County, other neighboring districts that could benefit from a shared services arrangement should also be invited to participate. Further, districts may find that they will benefit from some combination of scenarios and may wish to break off to work in smaller groups of two or three districts, rather than in a larger cooperative. All of these options should be thoroughly explored to ensure that the best interests of the districts are fully understood and protected.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The superintendent contacts Region 15 to set up a superintendent meeting with any interested districts in the Region, RESC staff and staff from TEA. October 2001 2. The superintendent attends the meeting and discusses a plan to fully explore the various options for cooperative financial services within Region 15.
November 2001 3. The committee researches all of the options, with each superintendent regularly providing information and input about their respective district's operations, needs and board concerns. December 2001 - March 2002 4. The superintendent shares the various options with the board for final consideration and review. April 2002 5. The board reviews the options and determines the best course of action for the district in the coming year, approving any needed budget or staffing adjustments for the coming year. May - June 2002 6. The superintendent works with fellow superintendents and regional staff to implement the plan. June - August 2002 7. The district implements the new approach and closely monitors the district's participation to ensure the success of the plan. August 2002 and Ongoing FISCAL IMPACT
This recommendation can be implemented with existing resources.