FINANCIAL MANAGEMENT
This chapter reviews financial management in the Veribest Independent School District (VISD) and includes the following sections:
Texas school districts must perform effective financial management in a highly regulated environment, meeting many requirements set by federal and state laws, rules and regulations. Districts must conduct school programs in accordance with the state constitution; the Texas Education Code (TEC) spells out the requirements for doing so. The code also authorizes the Texas Education Agency (TEA) to set standards for all school districts. TEA's Financial Accountability System Resource Guide (FASRG) outlines accounting and reporting requirements for Texas school districts.
BACKGROUND
VISD's Board of Trustees sets the district's property tax rate after the district budget has been adopted. The Tom Green County tax appraiser sets property values, certifies tax rolls,collects property taxes, submits tax revenues to the district and pursues delinquent taxes.
Local property taxes provide almost 34 percent of VISD's total revenue for all funds combined. In August 2000, the VISD Board of Education increased its property tax rate by 8.7 percent, from $1.38 to $1.50 per $100 of assessed value for 2000-01. The school board voted for the increase to satisfy requirements for obtaining facilities construction funding through the Instructional Facilities Allotment (IFA) program.
Exhibit 3-1 shows VISD property tax rates for the past seven years. As the exhibit shows, the property tax rate for maintenance and operations (M&O) has increased steadily from $1.29 per $100 of assessed value in 1995 to the current $1.50, while VISD has not levied a tax for debt service for the last seven years.
Exhibit 3-1 Source: Financial report of VISD, August 31, 2000.
VISD Property Tax Rates Per $100 of Assessed Value
1995 to 2001
Year M&O
RateDebt
Service RateTotal
Tax RatePercent Increase/
(Decrease) from Prior Year1995 $1.29000 $0.00 $1.29000 0.0% 1996 $1.30177 $0.00 $1.30177 0.9% 1997 $1.30177 $0.00 $1.30177 0.0% 1998 $1.38177 $0.00 $1.38177 6.1% 1999 $1.38000 $0.00 $1.38000 -0.1% 2000 $1.38000 $0.00 $1.38000 0.0% 2001 $1.50000 $0.00 $1.50000 8.7% Exhibit 3-2 compares tax rates per $100 of assessed value and property value per pupil for VISD and its peer districts. As the exhibit shows, VISD is about average compared to its peers in overall tax rate and has the second highest total property value (only Water Valley's property value is highter). VISD's property value per student of $186,363 is below the state average of $215,121.
Exhibit 3-2 Source: Comptroller of Public Accounts, Property Tax Division 2000.
Comparison of Tax Rates and Property Values for
Veribest ISD and Peer Districts
District
NameTotal Tax Rate
Per $100 of
Assessed ValueTotal
Property
ValueTotal
Property Value
per PupilCoolidge $1.696 $19,581,996 $78,016 Novice $1.500 $23,715,523 $241,995 Water Valley $1.500 $57,262,240 $181,785 Veribest $1.500 $50,690,743 $186,363 Panther Creek $1.260 $44,204,122 $203,706 State $1.474 $875,849,350,741 $215,121 VISD maintains several funds to track its financial operations. Each fund is considered a separate financial reporting entity and is accounted for individually. There are three primary funds: (1) the general fund, used to account for resources that finance fundamental district operations, (2) a special revenue fund, used to account for the proceeds of specific revenue that is legally restricted to expenditures for specific purposes, and (3) an agency fund, used to account for activities of student groups.
In addition to these funds, the district also uses account groups to reflect activities related to general fixed assets and general long-term debt.
VISD uses a financial management system provided by the Regional Education Service Center XV (Region 15). The software, called Regional Service Center Computer Cooperative (RSCCC), is a networked, Windows-based system for both financial and student management needs. RSCCC handles:
- Budget preparation;
- Budget amendment;
- Financial accounting;
- Purchase order processing;
- Payroll;
- Student registration;
- Grade-reporting;
- Discipline-tracking;
- Attendance;
- Scheduling; and
- Health services.
Exhibit 3-3 shows the balance of accounts in each of the district funds and account groups for the fiscal year ending August 31, 2000. Total assets for the general fund amounted to $292,960.
Exhibit 3-3 Source: Financial report of VISD, for the year ending August 31, 2000.
VISD's Balance Sheet as of
August 31, 2000
Description General
FundSpecial
Revenue FundsTrust and
Agency FundsGeneral
Fixed AssetsGeneral Long-
Term DebtTOTALS ASSETS Cash and Temporary Investments (market) $88,137 $14,977 $22,555 $0 $0 $125,669 Property Taxes - Delinquent 38,806 - - - - $38,806 Allowance for Uncollectible Taxes (credit) (10,609) - - - - $(10,609) Due from Other Governments 122,955 6,058 - - - $129,013 Accrued Interest 3,682 - - - - $3,682 Due from Other Funds 46,666 33,017 98,808 - - $178,491 Other Receivables 3,323 - - - - $3,323 Land - - - 45,817 - $45,817 Buildings and Improvements - - - 1,179,794 - $1,179,794 Furniture and Equipment - - - 267,818 - $267,818 Leased Property under Capital Leases - - - 24,522 - $24,522 Amounts to be Provided - - - - 402,409 $402,409 Total Assets $292,960 $54,052 $121,363 $1,517,951 $402,409 $2,388,735 LIABILITIES Accounts Payable $34,782 $3,640 $0 $0 $0 $38,422 Bonds and Loans Payable - Current Year - - - - 64,859 $64,859 Capital Leases Payable - Current Year - - - - 8,050 $8,050 Accrued Wages Payable - - 101,304 - - $101,304 Due to Other Funds 126,065 41,711 10,715 - - $178,491 Due to Other Governments - 8,201 - - - $8,201 Due to Student Groups - - 9,344 - - $9,344 Deferred Revenues 28,197 - - - - $28,197 Loans Payable - Long Term - - - - 320,978 $320,978 Other Long-Term Debt Payable - - - - 8,522 $8,522 Total Liabilities $189,044 $53,552 $121,363 $0 $402,409 $766,368 FUND EQUITY AND OTHER CREDITS Investments in Fixed Assets $0 $0 $0 $1,517,951 $0 $1,517,951 Unreserved, Undesignated Fund Balance 103,916 500 - - - $104,416 Total Fund Equity and Other Credits $103,916 $500 $0 $1,517,951 $0 $1,622,367 Total Liabilities, Fund Equity, and Other Credits $292,960 $54,052 $121,363 $1,517,951 $402,409 $2,388,735 Exhibit 3-4 summarizes revenue and expenses for all VISD funds. As the exhibit shows, total revenue from all funds amounted to $2,012,216 in fiscal 2000. Total expenditures for all funds exceeded revenues by $47,214, effectively decreasing the district's fund balance from $151,630 as of September 1999 to $104,416 as of August 2000.
Exhibit 3-4 Source: Financial report of VISD, for the year ending August 31, 2000.
VISD Total Revenues for all Funds
August 31, 2000
Description General Fund Special Revenue Funds Total REVENUES Local and Intermediate Sources: Investment Income $9,476 $9,476 Other Local and Intermediate Sources 694,076 30,146 $724,222 Total Local and Intermediate Sources 703,552 30,146 $733,698 State Program Revenues 1,110,249 62,513 $1,172,762 Federal Program Revenues 5,714 100,042 $105,756 Total Revenues $1,819,515 $192,701 $2,012,216 EXPENDITURES Instruction and Instructional-Related Services $1,041,001 $120,123 $1,161,124 Instruction and School Leadership 56,667 - $56,667 Support Services - Student 197,281 89,604 $286,885 Administrative Support Services 136,223 - $136,223 Support Services - Nonstudent Based 242,954 3,000 $245,954 Debt Service 96,654 - $96,654 Capital Outlay 5,336 - $5,336 Intergovernmental Charges 95,164 - $95,164 Total Expenditures $1,871,280 $212,727 $2,084,007 Excess (Deficiency) of Revenues Over (Under) Expenditures (51,765) (20,026) ($71,791) Other Resources 24,577 17,526 $42,103 Other (Uses) (17,526) - ($17,526) Excess (Deficiency) of Revenues & Other Resources Over (Under) Expenditures and Other Uses (44,714) (2,500) ($47,214) Fund Balance - September 1 $148,630 $3,000 $151,630 Fund Balance - August 31 $103,916 $500 $104,416 The majority of VISD's revenue comes from state program revenue, as shown in Exhibit 3-5.
Exhibit 3-5 Source: Financial report of VISD, for the year ending August 31, 2000.
VISD Sources of Revenue
All Funds as of August 31, 2000
State revenue makes up 59 percent of VISD's revenue from all funds, while local sources make up 36 percent and federal sources make up 5 percent of all revenue.