MONITORING REPORT

POLICY 2.4: FINANCIAL PLANNING & BUDGETING

This is my report on your Executive Limitation policy and is presented in accordance with your monitoring schedule. I certify the information contained in this report is true.

 

_______________________________                                  ________________________
Superintendent                                                              Date
The Superintendent shall not cause or allow financial planning for any fiscal year or the remaining part of any fiscal year to deviate materially from the board’s Ends priorities, risk financial jeopardy, or fail to be derived from a multiyear plan.
Further, without limiting the scope of the foregoing by this enumeration, there will be no financial plans that:

Provision # 1: Risk incurring those situations or conditions described as unacceptable in the board policy “Financial Condition and Activities”
Interpretation:  I interpret this to mean that the adopted budget that shall not cause or allow the development of financial jeopardy or material deviation of actual expenditures from board priorities established in Ends policies. Moreover, the adopted budget will provide for the following conditions:

Rationale: The rationale for this provision is clearly laid out in the conditions of Policy 2.3: Financial Condition and Activities.
Evidence: I certify the Audited Financial Statements and all budget information documents from July 1, 2011 to June 30, 2012 demonstrated compliance with these requirements. Additional evidences to support these requirements are reflected in Executive Limitations Policy 2.3: Financial Condition and Activities.
I report compliance.
Provision # 2: Omit credible projection of revenues and expenses, separation of capital and operational items, cash flow, and disclosure of planning assumptions
Interpretation: I interpret this to mean that the adopted budget must be based on reliable planning assumptions. Cash-flow must be appropriately managed for timely response to District needs and the integrity of capital and operational budgets must be maintained.
Rationale: The development of a budget must be based on explicit parameters, accurate revenue and expenditure projections, and directed toward the achievement of school district Ends. This provision specifically speaks to the importance of using long-term financial data combined with conservative revenue and expenditure projections. If time and expertise are not utilized to garner accurate predictors of revenues and expenditures, the likelihood of fiscal jeopardy is considerably increased (note: this includes maintaining awareness of political and legal developments in the field of education).
Evidence: The budget development process contains numerous systems to guarantee reliable revenue/expenditure projections and communicates these to the public. The following documents and procedures fulfill this requirement in annual cycles. Projected/actual dates are noted:

I report compliance.
Provision # 3: Provide less for board prerogatives during the year than is set forth in the Governance Investment Policy
Interpretation: I interpret this to mean that the approved budget will encompass Board directed prerogatives.
Rationale: The rationale for this interpretation is self-evident.
Evidence: In October and November of each year, the Board discusses its needs and informs the Superintendent of required resources. Within the written budget parameters, the Board informed the Superintendent of the following prerogatives that were included in adopted budgets:

I report compliance.

Provision # 4: Omit disclosure of anticipated impact(s) on proposed and adopted budgets.
Interpretation: I interpret this to mean that all anticipated impacts on proposed and adopted budgets will be fully disclosed to the Board, through monthly Superintendent reports and monthly meeting discussions, and that proposed budgets will reflect all anticipated impacts.
Rationale: There are always significant factors that must be identified in order to accurately predict anticipated revenues and expenditures. Moreover, a stringent monitoring system, both internal (operational) and external (Boards), must be implemented in order to ensure the fiscal integrity of the school district.
Evidence: I certify that all adopted budgets in 2011 included these anticipated impacts:

I report compliance.
Provision # 5: Omit to allow budgeting that is not in a summary format understandable to the Board and public and presented in a manner that allows the Board to understand the relationship between the budget and the Ends priorities for the year.
Interpretation: I interpret this to mean that the budget document for any fiscal year will be summarized for ease of understanding and will demonstrate support for the Boards’ Ends.
Rationale: A prime responsibility of School Boards rests in the fiduciary arena. As such, transparency becomes a necessity of the budgetary process. In other words, the “Owners” of the school district must be able to easily read and understand the budget document. Additionally, detailed information must be made available, in a timely manner, upon request.
Evidence: Along with the 2012/2013 adopted annual budgets, the administration provided detailed supporting documents, including:

I report compliance
Policy Wording: The Superintendent shall not cause or allow financial planning for any fiscal year or the remaining part of any fiscal year to deviate materially from the board’s Ends priorities, risk financial jeopardy, or fail to be derived from a multiyear plan.
Interpretation: I interpret “financial planning” to mean a Board adopted budget that is derived from:

I interpret “deviate materially” to mean funds shall not be directed away from the achievement of Boards Ends. I further interpret “financial Jeopardy” to mean any condition which would require the redirection of significant resources from their intended purposes due to an unseen, predictable budget factor.
Finally, I interpret compliance with the overall policy to mean that all five provisions are in compliance.
Rationale: Completing the fiscal year in the “black” does not fulfill the requirements of this policy. Rather, the Superintendent must take adequate actions to ensure a comprehensive budget plan is developed and followed. For example, if a budgetary factor was not considered accurately or ignored (say the budgeting of anticipated Federal grants), a revenue shortfall would be created. To compensate for the revenue shortfall, the Superintendent could reduce expenditures mid-year and end the fiscal year in budget. In this scenario, the fiscal year would look healthy, but the attainment of Board Ends would have, in all likelihood, been significantly jeopardized.
I report compliance.