Financial Management Workshop

Presentation to Providence School BoardNovember 22, 2010

Objective of Presentation

The goal of this presentation is to provide school board members with a better understanding of the financial operations of the school district, in order to assist the members in responding to the financial challenges facing the Providence School Department.

Providence School’s Financial Management Process

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Operational Results and Financial Reports inform Strategic Direction

Section I

Finance Division

Organizational Overview

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Overview of Finance Division

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Finance Division - Information

• 75 Full time Employees;

• New initiatives currently underway:

• 50% Reduction to Warehouse Space

• Continued Training on Textbook Management System (Destiny)

• Energy Source/National Grid Project

• Participation in “BuyBoard” – Superintendents

• FICA Alternative Plans

• Medicaid Reimbursement Increases

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Finance Division – Duties and Responsibilities

• Manage the seven divisions of the Finance Department, which are responsible for all financial operations in the district;

• Ensure that appropriate procedures are in place to meet federal, state and local compliance regulations and School Board policies;

• Develop the district’s operating and capital budgets and ensure the fiscal integrity of local and non-local transactions.

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Finance Division – Duties and Responsibilities

• Assist with labor and other contract negotiations

• Collaborate with Human Resources in addressing union grievances

• Research and implement financial management best practices

• Manage system-wide information technology needs

• Manage major operational, capital and inventory assets

Medicaid Office – Duties & Responsibility

• Administer approximately 50,000 Medicaid billing transactions annually for health-related costs associated with providing Special Education services to students

• Services that are reimbursable are speech therapies, occupational and physical therapies, counseling, case management, behavioral health, and personal care that are required in a students IEP

• The district’s consultant, Public Consulting Group, Inc. (PCG), provides a web-based service documentation tool, EasyTrac™ that special education service providers to document the health related services

• FY2010 results were the strongest in recent history due to improved and timely reporting.

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Medicaid Reimbursements - FY2010 Overview

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Medicaid Reimbursements - FY2010 Overview

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$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

FY04 FY05 FY06 FY07 FY08 FY09 FY10

$3.10

$3.13

$3.20

$2.52

$2.52

$2.75 $3.35

Revenue Per Yr.

Million

Controller

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Controller – Duties and Responsibilities

• Ensures adequate internal controls are in place and proactively responds and corrects internal control weaknesses

• Manages employment and post-employment benefits

• Manages the ERP System

• Prepares accurate and timely financial statements

• Assesses, designs and sets up accounting systems to ensure effective and efficient recording of accounting transactions

• Monitors adherence to established operating procedures/internal controls

• Prepares/reviews general ledger accounts to ensure the integrity and accuracy of accounts

• Coordinates activities of external auditors, receives timely annual audit and uses it to improve operations

• Prepares support schedules for year-end work papers

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Controller - Statistics

• FYE 2010– 128,117 payroll checks generated/distributed per year (75% direct

deposit);

– 16,015 checks processed per payroll staff member;

– Payroll cycles:o 10 month employees 21 biweekly, 26 biweekly, 42 weekly;o 12 month employees 26 biweekly, 52 weekly.

– 1,507 former employees receiving post retirement benefits;

– 18,084 post-employment benefit checks processed;

– 13 Active and 13 Post Employment Health Insurance Packages:

– Accounts Payable volume 9,271 checks – 1,854 per AP staff.

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Controller – Other Information

• Types of funds and their use:– General: Unrestricted school department use;

– Non-Local: Restricted use determined by the specific regulations of the grantor ( 80 grants/entitlements);

• Direct Federal

• State Direct

• Federal Through State

• Private/Local Grants

– Enterprise Fund: Self supporting fund• School Nutrition – Food Service program proceeds may only be used for

food service related activities.

– Student Activity and Other Bank Accounts

Controller – New Initatives

• New Initiatives in Progress

– Implement a position control system

– Implement an absence management system

Budget Office

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Budget Office – Duties and Responsibilities

• Lead in the planning, preparation and management of the district’s local budget

• Create and analyze reports on budget trends, budget drivers, laws and regulations affecting the School Department’s operating budget

• Proactively works with departmental and school staff during budget development process and throughout year

• Establish and maintain procedures to ensure that expenditures are not made by individual departments except as authorized in the budget

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Budget Office – Duties and Responsibilities

• Develop financial analysis as needed to support the overall financial management function

• Prepares quarterly budget reports for submission to the State Office of Municipal Affairs and materials for InSite and RIDE

• Prepares budget schedules, reports, decision items and fiscal impact statements for proposed actions

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Budget Office - Information

• Providence School Department budget is the largest municipal budget in the State of Rhode Island

• The Department’s local budget, staffing, and staff salary ranges must be approved by the Providence City Council prior to implementation

• All purchase orders and invoices requests using local funds are approved by the Budget Office prior to implementation

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Grants Management

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Grants Management – Duties and Responsibilities

• Manages grants fiscal operations

• Prepares fiscal portion of all grant funding

• Develops individual budgets for each approved grant award

• Tracks all grant activities and issue budget summary statements as a management tool

• Develops centralized information system for multiple programs and to track grant status

• Maintains systems for tracking all active grants

• Coordinates with the Grant Writer & Director of Federal Programs to prepare budgets for all grant applications

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Grants Management - Statistics

• Department currently manages approx. 80 active grants totaling approx. $64 million

• Approximately 85 schools (public & non public) and 20 District departments receive grant funding that passes through the Grants Office

• All non-public schools receiving Federal Funds must be visited by Department staff at least twice a year

• $13.1 million of Title I Funds allocated directly to schools

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Providence Public Schools Active Grants (2010/2011)

• Title I– Contact is made with 90 non-

public schools

– 29 schools have accepted participation, of which 10 are outside Providence

• Title II– Contact is made with 37 non

public schools, all of which are in Providence

– 29 of the 37 have accepted $519,000

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Title I Funding - Non-Public Schools

Outside Providence

School Location

   

Barrington Christian Academy Barrington

St. Elizabeth Ann Seton Academy Central Falls

St. Mary-Cranston Cranston

St. Paul School  Cranston

Sacred Heart East Providence

St. Rocco Johnston

St. Raphael Academy Pawtucket

West Bay Christian Academy South Kingstown

Islamic School of Rhode Island West Warwick

Mount St. Charles Academy Woonsocket

Grants Management - Information

Major Grant Programs   Funding Source Purpose   

Title IImproving the Academic Achievement of                                                                                                  Disadvantaged; Homeless Children & Youth

Title I, ARRA Accelerated Improvement & Academic Achievement

Title I, SIG A - ARRA Intensive Support & Intervention for lowest performing schools

Title II, Part A Teacher Quality/Class SizeTitle III Language AcquisitionTitle IV Safe & Drug Free SchoolsIDEA Special EducationIDEA, Part B - ARRA Special EducationIDEA, Part B - Preschool ARRA Special EducationLiteracy Improving Literacy AchievementPerkins Vocational Education

Stabilization Funds to Minimize Reductions in Educational Services

Providence School DepartmentActive Grants (2010/2011)

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Purchasing

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Purchasing – Duties and Responsibilities

• Maintains an effective purchasing function that ensures goods and services of acceptable quality and performance are acquired at prices that are fair and competitive

• Ensures adherence to all purchasing regulations

• Negotiates and recommends execution of contracts for the purchase of supplies, services and equipment

• Recommends to the CFO rules and procedures governing the purchase of supplies, services and equipment for the Department

• Keeps informed of current developments in the field of purchasing, prices, market conditions and new products

• Maintains a bidders’ list, vendors’ file, and such other records as are needed for the efficient operation of the purchasing function

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Purchasing – FY2010 Statistics

Processed 4,011 purchase orders with total value of $81.1 million

565 PO’s (96.4% of total) > $5,000 submitted to School Board and Board of Contract and Supply;

Transactions per purchasing staff member = 1,950

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FY2010 Purchase Orders

   

Amount # of PO Share $ Amount* Share

   

0-5,000        3,446  85.9% 2.9 3.6%

5,001-10,000            186  4.6% 1.3 1.6%

10,001-15,000              93  2.3% 1.1 1.4%

15,001+            286  7.1% 75.8 93.5%

Total 4,011 81.1

* Millions        

Purchasing – Other Information

• Per City Charter

– All purchases $100 - $500 require 2 bids

– All purchases greater than $500 require 3 bids

– All purchases greater than $5,000 must be approved by the City Board of Contract and Supply and are approved by the School Board

Information Technology

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Information Technology - Statistics

• Total Number of Technical Requests: 1,487• E-mails: 768

• Phone Calls: 276

• V-Mail: 209

• Walk Ins: 44

• SAF/SIRF: 190

• Total Amount of Work Orders Resolved: 1162

• Requests Resolved Remotely: 371

• Average response time; 2 business days.

• Average response time to resolution; 7 business days.

Information Technology - Statistics

• Locations Supported: 53

• Network Servers: 124 (9% Virtualized).• Network Equipment: Over 1,200 devices.• Network Users: Over 27,000 Accounts.

• Student Workstations: Approximately 6,500 • 1/4 have been purchased in the past 3 years.• 5:1 (ES), 3:1 (MS) and 3:1 (HS) Ratio of student to computers.

• Applications: 200 local and networked applications.

Mail/Warehouse

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Mail/Warehouse – Duties and Responsibilities

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• Manage the textbook inventory system (Destiny) for public and non-public schools

• Manage the distribution of 5,000 text books distributed to 50 non public schools

• Prepare USPS mail & deliver inter-office & inter-departmental mail

• Receive all school department of goods

• Deliver and transfer small equipment and furniture within the school department

• Maintain district’s warehouse and associated asset management

Mail/Warehouse - Information

• Processed in excess of 200,000 pieces of mail per year

• Coordinated the movement from items the closure of Perry Middle School and Feinstein High School

• Warehouse, located at 304 Pearl Street, is currently being reduced to 15,000 square feet

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Section II

Finance Division

FY2011 Budget

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FY2011 Budget - Review

• School board authorized district’s proposed budget on April 26, 2010

• Proposed budget was $329,436,497, which was $15,890,845 (5.07% increase)

• 93.5% ($14,863,973) of this expenditure increase was due to salary and benefits

• The proposed budget was submitted to the city with a $16.8 million budget gap, which assumed that city and state funding would remain at FY2010 levels

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FY2011 – Update

• Working with the city administration, the district has revised its original budget to bring it to balance

• The revised budget has been submitted to the City Council’s Finance Committee

• Expenditures have been reduced by $16.3 million in its revised budget

• The city assumed $7.9 million of these reductions (debt service)

• The city’s direct contribution to schools is increased by $8.3 million in FY2011

• The FY2011 city and school budget has not been approved by the City Council

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FY2011 - Update on Latest Proposed Budget

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Budget Gap

Original Budget Gap $16,861,025

Reduction to State Aid 8,074,822

Total $24,935,847

Solutions:

Expenditure Changes $16,345,720

School Revenue Increase 300,000

Direct City Aid 8,290,127

Total $24,935,847

Section III

Finance Division

How Does the District Compare?

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How Do We Compare – FY 2009 Spending

• Rhode Island school districts spent slightly more than $2.1 billion in FY 2009 – at a per pupil cost of $14,471

• Providence spent $15,305 per pupil in FY 2009 – ranking it 22nd highest

• Providence’s per pupil spending was less than 5.0% higher than the State average

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How Do We Compare – FY 2011 Teacher Salaries

• Rhode Island districts paid an average of $70,862 in salaries per teacher in FY 2011 (10th step)

• Providence paid $69,064, which ranked the district 10th highest in the State

• Providence’s 10th step teacher salary is 2.5% above the State average

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How Do We Compare – FY 2009 Allocation of Elementary and Middle School Expenditures

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How Do We Compare – FY 2009 Allocation of High School Expenditures

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Section IV

Finance Division

School Board Questions

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