FINANCIAL MANAGEMENT
This chapter reviews the financial management functions of Morgan Independent School District (MISD) in the following sections:
School districts must practice sound financial management to maximize limited resources and plan for student needs. Effective financial management ensures that internal controls are in place and operating as intended, technology is maximized to increase productivity and that reports are prepared timely and accurately.
The share-the-wealth law, which the Legislature passed in 1993, is designed to maintain funding equity among Texas school districts. The law seeks to equalize education funding by transferring funds from property wealthy school districts to property poor ones. Before the system was installed, some school districts were able to spend thousands of dollars more per year on each student than other districts. Since the law has been passed, property poor districts report that the additional money they receive enables them to hire better teachers and significantly boost student achievement levels. Because of the number of economically disadvantaged students in the district, MISD is one of the recipients of additional state funding.
The Texas Education Agency (TEA) requires districts to manage their financial operations in conformity with the regulations and requirements established by federal and state laws, rules and regulations. TEA's Financial Accountability System Resources Guide (FASRG) outlines accounting and reporting requirements for Texas school districts. Generally Accepted Accounting Principles (GAAP) and the Governmental Accounting Standards Board guidelines also affect school district's financial management activities.
Effective purchasing processes provide school districts with supplies, materials, equipment and services to operate schools and serve education programs at the most economical prices. School districts have opportunities to cooperatively purchase goods with other jurisdictions when it is mutually beneficial to all parties involved. These purchasing cooperatives can benefit small districts that do not have much money to spend.
Texas school districts have a fiduciary responsibility to protect publicly financed assets provided to educate children. An effective asset and risk management program provides a district with investments that earn maximum interest rates available while safeguarding funds and ensuring liquidity to meet the district's fluctuating cash flow requirements. Effective asset and risk management also controls costs by protecting the district against significant losses with the lowest possible insurance premiums while providing sound and cost-effective health insurance for district employees.