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
A. ORGANIZATION, MANAGEMENT AND STAFFING
The RISD business office staff consists of nine full-time positions including the business manager, hired in November 2001, and vacant chief financial officer, chief accountant and tax-assessor officer positions. The office also includes two bookkeepers, an accounts payable clerk, an assistant tax assessor/collector and a switchboard operator. A student accounting/PEIMS clerk (not included in RISD's organization chart for the business office) also reports to the business manager. Exhibit 6-4 shows the current organization of RISD's business office.
An efficient and effective financial system is dependent on an organizational structure with trained staff that have work assignments that allow sufficient time to complete their work in an orderly and professional manner. Management staff must be available to assist with complex financial issues and to oversee the daily operations.
Exhibit 6-4 Source: RISD business office, November 2001.
Business Office
Organizational ChartFacing a financial crisis for 2001-02 and realizing its financial operations were in trouble, the former RISD superintendent contacted the Regional Educational Service Center I (Region 1) for assistance.
In a presentation conducted by Region 1 representatives on May 30, 2001, the district was advised to execute a number of actions to include:
- Increase tax collection rate for current year and future years to 100 percent of tax levy;
- Increase tax rate for 2001-02 to maximize state aid;
- Sell bonds before August 31, 2001;
- Submit an Instructional Facilities Allotment (IFA) application by June 2001;
- Reduce the number of staff and teachers for 2001-02 to meet the minimum acceptable staff and teacher ratios;
- Create a district budget for 2001-02 within remaining projected revenue and have a built-in increase to the general fund balance.
FINDING
RISD's business office lacks public school district financial accounting training.
The business manager position remained vacant for several months until the current business manager joined the district in November 2001. The new business manager has a background in auditing but has no previous school district financial management experience. The chief financial officer left the district in October 2001 and has not been replaced. The chief accountant, the only remaining district employee with school district experience and training, retired in November 2001after more than 27 years with RISD. The district has a full-time tax assessor/collector position that is currently vacant and a full-time assistant tax collector who mails statements and collects the district's taxes. RISD does not maintain an internal audit staff and has contracted with an auditing firm in Brownsville to perform its annual external audit.
Members of the district's secretarial staff attended a workshop in Harlingen in February 2001. The business manager began taking Texas Association of School Board Officials (TASBO) business-related courses in November 2001 but those are the only employees with training in governmental accounting.
Financial management and reporting requirements for school districts are complex. Understanding the reporting and legal requirements and prohibitions are critical. The amount of state and federal funding the district receives depends on the district's ability to interpret and apply rules and regulations in an accurate and through manner.
Recommendation 45:
Obtain training for the district's business manager and other business office staff and adjust future postings to require school district experience.
The need for well-trained and experienced business office staff is essential to improving the district's financial operations.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The business manager contacts a Region I representative for advice on the appropriate business training classes and workshops to be attended by RISD business office personnel. April 2002 2. The superintendent directs the business manager to revise job descriptions to require an appropriate level of school district experience for each position in the business office. April 2002 3. The business manager requests a schedule of training classes and workshops from TASBO. May 2002 4. The business manager prepares a proposed schedule of training classes and workshops to be attended by him and other business office personnel and submits to the superintendent for approval. June 2002 5. The superintendent submits the proposed schedule of business and governmental accounting classes and workshops to the board for review and approval. July 2002 6. The business manager registers business office employees for appropriate training classes and workshops. August 2002 7. The business manager and business office employees attend training. September 2002 - Ongoing FISCAL IMPACT
Workshops for TASBO include many subjects such as the basics of governmental accounting, GASB reporting models, fundamentals of risk management, budget and financial planning, investment training, pupil projections and state aid calculation. Assuming two business office personnel register for TASBO online classes in budget and financial planning, duties of school business administrators, external auditing and risk management, the cost will be $1,600. The cost of most two-day classes is $200 per person for TASBO members. The cost estimate assumes two district personnel register for four two-day classes in each year from 2002-03 to 2006-07 ($200 x 4 x 2).
Recommendation 2002-03 2003-04 2004-05 2005-06 2006-07 Obtain training for the district's business manager and other business office staff and adjust future postings to require school district experience. ($1,600) ($1,600) ($1,600) ($1,600) ($1,600) FINDING
The current organization of the business office does not provide for an effective and efficient operation. The chief accountant, chief financial officer and tax-assessor/collector positions are vacant as of this writing. With the existing vacancies, all business office personnel report directly to and seek guidance from the business manager.
The accounts payable clerk is responsible for entering accounts payable information, processing bi-weekly payrolls, maintaining the district's teacher retirement records and preparing the weekly check register that is presented to the board.
Bookkeepers are responsible for maintaining sick leave balances, entering central office purchase order information, maintaining fixed asset records, maintaining employee insurance records, preparing insurance vendor checks and performing daily backups of the computer system. Bookkeepers also assist with the district's switchboard.
Tax office personnel receive property value information from the Willacy County Appraisal District and coordinate printing the district's tax statements, mail them out to local residents and businesses and collect tax payments.
A position that does not appear on the organization chart for the RISD business office is a clerk that handles the student attendance accounting, acts as the PEIMS coordinator and the software coordinator for the district's financial accounting system.
An effective and efficient business office requires that duties be assigned equitably between staff and staff provided with supervisory personnel who are knowledgeable and capable to provide guidance and direction. Staffing levels should be established so that required functions can be adequately performed but as the lowest cost possible.
Recommendation 46:
Reorganize the Business Office with two chief accountants who report to the business manager.
The vacant chief financial officer position should be changed to a chief accountant position, giving the district two chief accountants who report to the business manager and the vacant tax assessor/collector position should be eliminated. One chief accountant should be responsible for the formal accounting duties, including management of the general ledger, financial reporting, management of grant programs, fixed asset accounting and management of cash receipts. The second chief accountant should designated as the tax assessor- collector and be responsible for tax assessor-collector duties and duties primarily associated with accounts payable, purchasing, payroll, and PEIMS reporting. The duties of the two chief accountants should be organized to equitably distribute responsibilities and maximize internal controls. Both positions should be filled with accountants with college degrees and school finance experience.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The business manager submits the realignment plan for the business office to the superintendent for approval. April 2002 2. The business manager organizes the specific job duties of the business office under two chief accountant positions, defines the lines of authority and develops job descriptions for the revised duties and responsibilities. May 2002 3. The Human Resource Department recruits two chief accountants with college degrees and school district finance experience. May - June
20024. The business manager interviews candidates and makes recommendations to the superintendent for approval. June 2002 5. The two chief accountants report to work and the business manager implements the new organizational structure. July 2002 FISCAL IMPACT
Eliminating the tax assessor-collator position and changing the chief financial officer to a chief accountant position would save the district a total $44,534 ($38,725 salary costs and $5,809 benefit costs based on a 15 percent benefit rate) a year. Salary reductions of $38,725 are based on eliminating the tax assessor-collector position at a salary of $33,165 and the difference in salary between the chief financial officer of $45,000 and a chief accountant position of $39,440 ($33,165 + $45,000 - $39,440).
Recommendation 2002-03 2003-04 2004-05 2005-06 2006-07 Reorganize the Business Office with two chief accountants who report to the business manager. $44,534 $44,534 $44,534 $44,534 $44,534
