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Chapter 6
FINANCIAL MANAGEMENT

This chapter discusses the financial management of Raymondville Independent School District (RISD) in three sections:

A. Organization, Management and Staffing
B. Districtwide Planning and Budgeting
C. Accounting and Internal Control

Effective financial management ensures that a school district receives all available revenue from state and federal resources, maintains a track record of sound financial decisions and makes adequate and equitable budget allocations. A well-managed financial department will issue timely, accurate and informative reports on the district's finances, maintain adequate internal controls, employ skilled personnel and maintain a consistent record of unqualified opinions by its external auditors.

Financial management in school districts requires effective planning, budgeting and ongoing evaluation of the use of district resources. Financial management is most effective when resources are used to meet district-established priorities.

BACKGROUND

Texas public school districts must meet financial management requirements established by federal and state laws, rules and regulations. Internally developed policies and procedures, Generally Accepted Accounting Principles and the Governmental Accounting Standards Board (GASB) guidelines also provide direction to a school district's financial management activities.

Texas school districts are required by Texas law to conduct school programs in accordance with the state constitution. The Texas Education Code (TEC) spells out the specific requirements that school districts must comply with and authorizes the Texas Education Agency (TEA) to establish standards for all school districts. TEA's Financial Accountability System Resource Guide (FASRG) outlines accounting and reporting requirements for Texas school districts.

The RISD business office is responsible for financial reporting, accounting, accounts payable, accounts receivable, payroll, investing and fixed assets. The business manager supervises eight employees and reports to the district superintendent. The district contracts with the Brownsville firm of Pattillo, Brown & Hill for external auditing services.

RISD's revenues steadily increased from 1997-98 to 2001-2002. Revenues from federal sources increased considerably while revenues from the state decreased. Exhibit 6-1 shows RISD's actual revenues for 1997-98 through 1999-2000 and budgeted revenues for 2000-01 and 2001-02.

Exhibit 6-1
RISD Actual and Budgeted Revenues
1997-1998 through 2001-02
Revenue
Source		 Actual
Revenues
1997- 98		 Actual Revenues
1998- 99		 Actual Revenues
1999-2000		 Budgeted Revenues
2000-01		 Budgeted Revenues
2001-02		 Percent Increase/(Decrease)
1997-98 to 2001-02
Local and intermediate revenues $4,167,692 $4,430,859 $4,539,372 $3,839,149 $4,171,437 0.1 %
State program revenues $11,778,352 $10,903,873 $10,991,788 $11,699,606 $11,613,962 (1.4%)
Federal program revenues $33,638 $1,041,859 $1,121,644 $1,138,563 $1,121,384 3,233.7%
Total adjusted revenue $15,979,682 $16,376,591 $16,652,804 $16,677,318 $16,906,783 5.8%
General Fund revenues per Student $5,631 $5,779 $6,080 $6,284 $6,553 16.4%
Source: Texas Education Agency (TEA), Public Education Information Management System (PEIMS), 1997-98 through 2000-01, and RISD business office.

RISD had the largest increase in expenditures among its peers from 1997-98 through 2000-01, as shown in Exhibit 6-2.

Exhibit 6-2
Actual and Budgeted Expenditures
All Funds
RISD and Peer Districts
1997-98 through 2000-01
District Actual Expenditures
1997-98		 Actual Expenditures
1998-99		 Actual Expenditures
1999-2000		 Budgeted Expenditures
2000-01		 Percent Increase/(Decrease)
1997-98 to 2000-01
Raymondville $15,211,782 $16,508,042 $18,437,132 $18,071,473 18.8%
Taft $9,822,133 $11,274,897 $11,518,605 $10,416,912 6.1%
West Oso $12,900,850 $17,210,270 $17,421,633 $13,064,500 1.3%
Mathis $13,626,661 $15,642,845 $17,796,027 $13,422,739 (1.5%)
Lyford $11,812,237 $11,636,217 $12,816,154 $11,618,226 (1.6%)
Source: TEA, PEIMS, 1997-98 through 2000-01.

Exhibit 6-3 presents a summary ofRISD's 2000-01 expenditures by function compared to the state average. RISD spent 51.9 percent of its total expenditures on instruction, which is slightly more than the state average for 2000-01 of 51.5 percent.

Exhibit 6-3
RISD Budgeted Expenditures by Function
As a Percentage of Total Expenditures
2000-01
Function
(Code)		 RISD
Expenditures		 Percent of Total
Expenditures
RISD State
Instruction $9,376,317 51.9% 51.3%
Instruction-Related Services $560,940 3.1% 2.6%
Instructional Leadership $261,204 1.4% 1.2%
School Leadership $992,490 5.5% 5.2%
Student Support Services $581,702 3.2% 4.0%
Student Transportation $286,116 1.6% 2.5%
Food Services $1,222,500 6.8% 4.9%
Co-curricular/Extracurricular Activities $832,444 4.6% 2.2%
Central Administration $813,546 4.5% 3.5%
Plant Maintenance and Operations $1,479,760 8.2% 9.6%
Security and Monitoring Services $54,250 0.3% 0.6%
Data Processing Services $100,756 0.5% 1.1%
Other $67,553 0.4% 0.0%
Total Operating Expenditures $16,629,578 92.0% 88.7%
Total Non-Operating Expenditures $1,441,895 8.0% 11.3%
Total Expenditures $18,071,473 100.0%* 100.0%
Source: TEA, Academic Excellence Indicator System (AEIS), 2000-01.