HELPING YOUR DISTRICT STAY OUT OF FISCAL

OVERSIGHT

OSBA / OASBO Treasurers ClinicsSeptember, 2011

Presented by Roger Hardin, Assistant Director

Office of Finance Program Services

Who Are We?

Center For Student Support and Education Options

Office of Finance Program Services Tom Gumpf, Interim Director

Twenty Area Coordinators providing direct services to districts

Roger Hardin, Assistant Director

Nine Fiscal Consultants providing direct services to districts

Two Fiscal Consultants serving as Commission Chairs

One Fiscal Consultant serving as Secretary/Monitor to Commissions

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Five Year Forecast: Where It All Begins

Requirements per ORC 5705.391 and OAC 3301-92-04:

Electronic submission of both projections and assumptions to ODE by October 31

All districts must update the forecast between April 1 and May 31

ODE must examine the five year forecasts and determine if a district has the potential to incur a deficit during the first three years

Closed period from August 15 to October 15

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Fiscal Year 2011, ProjectedDistricts in fiscal oversight – 35

Projected low fund balances – 28

Projected fund balance deficits - 64

Fiscal Year 2012, ProjectedDistricts in fiscal oversight – 35

Projected low fund balances – 32

Projected fund balance deficits - 285

Fiscal Year 2013, Projected

Districts in fiscal oversight – 35Projected low fund balance – 46Projected fund balance deficits - 135

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What Do We Do?

Districts are to be contacted if any of the following four flags appear:

Current Year Deficit – Direct contact from fiscal consultant

Current Year Low Fund Balance – Direct contact from fiscal

consultant

Deficit in Year Two – Letter from Columbus office requesting

plan to eliminate the deficit

Deficit in Year Three – Letter from Columbus office

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Current Year Deficit

For October, 2011 forecast, this will be FY 12 Fiscal Consultant will contact the district Treasurer

either by phone or in person Need to determine if district can complete the fiscal

year without incurring a deficit Consultant may offer services:

Forecast review with Treasurer Financial Analysis Arrange Staffing Analysis with Area Coordinator Arrange presentation for district officials and/or BOE

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Current Year Low Fund Balance

For October, 2011 forecast, this will be FY 12 Fiscal Consultant will contact the district Treasurer

either by phone or in person Need to determine if district can complete the fiscal

year without incurring a deficit Consultant may offer services:

Forecast review with Treasurer Financial Analysis Arrange Staffing Analysis with Area Coordinator Arrange presentation

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Deficit in Year Two

For October, 2011 forecast, this will be FY 13 District will receive a letter from Columbus office

requesting a plan to eliminate the projected deficit before it becomes reality

Plan due to Columbus office within sixty days of letter Plan cannot include anything that is not yet approved

Levies Items requiring negotiations Advances from County Auditor

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Deficit in Year Three

For October 2011 forecast, this will be FY 14 District will receive a letter from Columbus office

notifying them of a projected deficit Letter may not request a plan to be submitted, but

encourages district to develop a plan to eliminate the projected deficit

District officials may contact ODE to discuss status or request services

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When Is Fiscal Caution Declared

Per ORC 3316.031, fiscal caution may be declared for any of the following reasons:

When ODE determines through the five year forecast that fiscal practices or budgetary conditions exist that could result in the declaration of fiscal watch or fiscal emergencyWhen the AOS reports those practices or conditions exist, or when the district shows a 2% – 8% deficit and decides not to place the district in fiscal watchA district fails to submit a five year forecast or a proposed plan to eliminate a deficit upon request

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Fiscal Caution Recovery PlanDistrict:   Column I Column II Column III

County:   Projected Deficit Proposal that Proposal for

Date Submitted:   ODE Financial - date Addresses Deficit Next Fiscal Year

REVENUES - OPERATIONAL   FY11   FY11   FY12  

1.010 General Property (Real Estate)            

1.020 Tangible Personal Property Tax            

1.030 Income Taxes            

1.035 Unrestricted Grants-in-Aid/State Foundation            

1.040 Restricted Grants-in-Aid            

1.045 Restricted Grants-in-Aid (SFSF Fund 532)            

1.050 Property Tax Allocation            

1.060 All Other Operating Revenue            

1.070 Total Operational Revenue $

-   $

-   $

-  

REVENUES - NON-OPERATIONAL        

2.070 Total Non-operational Revenue            

             

2.080 TOTAL REVENUE $

-   $

-   $

-  

EXPENDITURES - OPERATIONAL        

3.010 Personal Services (Salaries & Wages)            

3.015 Personal Services (Salaries & Wages)(SFSF Fund 532)            

3.020 Fringe Benefits            

3.025 Fringe Benefits (SFSF Fund 532)            

Sub-total -- Salaries & Benefits $

-   $

-   $

-  

3.030 Purchased Services - Util., Cont. Other Ins.            

3.040 Materials, Supplies & Textbooks            

3.050 Capital Outlay (Equip. buses, etc.)            

3.060 Intergovernmental            

4.300 All Other Objects            

Total Operational Expenditures $

-   $

-   $

-  

EXPENDITURES - NON-OPERATIONAL              

Total Non-operational Expenditures            

5.050 TOTAL EXPENDITURES $

-   $

-   $

-  

7.010 General Fund Cash Balance - Beginning of FY         $ -  

7.020 General Fund Cash Balance - End of FY $

-   $

-   $

-  

8.010 Encumbrances            

Unencumbered General Fund Cash Balance $

-   $

-   $

-  

UNEXPENDED RESERVATION OF FUNDS        

9.010 Textbooks and Instructional Materials            

9.020 Capital Improvements            

9.030 Budget Reserve            

9.070 Bus Purchase Reserve            

9.08 Total Reservations $

-   $

-   $

-  

10.010 Fund Balance June 30 For Certification of Appropriations $ -  

$ -  

$ -  

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Monthly Monitoring Fiscal Consultant will provide a list of the reports

necessary for the monitoring, including the SM-1 and SM-2 or similar spreadsheet

A specific time and date are established Treasurer is expected to be present On site monitoring may be bi-monthly if conditions

allow Consultant will review BOE minutes, financial reports,

recovery plan, etc. Monitoring report is reviewed by Columbus office to

assure continued progress of the district14

Services Provided by ODE

Consultation with district officials regarding the five year forecast and/or Benchmark Report

Financial Analysis

Arrange for a Staffing Analysis

Presentation to district administration, BOE, and/or community groups

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What Can a District Do?

The ORC does not preclude a district from ending the fiscal year with a negative fund balance, however . . .

What other districts have done in the past: Districts may request a cash advance from the County

Auditor Withhold certain payments, such as health insurance MOU with Associations to delay payroll Short term TAN for end of June, available for expenditure

after July 1 to cover withheld payments Ask their consultants for additional assistance and review

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Final Thoughts on the Forecast

Line Item 1.045 which includes funds from Accounts 532 and 504 will soon be deleted

ODE has requested the addition of Line 1.015 to include County Auditor advances

Reminder to send in both the forecast spreadsheet and assumptions anytime a forecast is updated

Please review to ascertain the correct forecast is being submitted

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ORC 3316.20 Solvency Assistance and Catastrophic Grants

Solvency Assistance Advances: Only available to districts in fiscal

emergency Require Controlling Board approval Based on the AOS ‘certificate of deficit’ To be repaid from Foundation payments

over the next two years HB 153 offers some minor changes

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ORC 3316.20 Solvency Assistance and Catastrophic Grants

Catastrophic Grants: Available when a district experiences an

“unforeseen catastrophic event” Grant is not repaid ODE and OBM must request Controlling

Board approval for the grant

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Frequently Asked Questions

Q. Can a district go into fiscal oversight without a deficit?

A.Yes, if the district does not comply by submitting a forecast or recovery proposal, or if the forecast shows conditions exist that could cause the district to end up in fiscal emergency.

Q.What can a district do to prevent fiscal emergency?

R.Increase their revenue, decrease their expenditures, or a combination of both.

Q.When should I contact ODE to discuss our financial situation?

R.Anytime you have a question regarding the district’s financial status or forecast.

Q.Is there any other information available, especially for a new treasurer?

R.On the ODE website there is a document titled “New Chief Fiscal

Officer/Treasurer’s Guide” which is intended to offer suggestions and advice for new

personnel.

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Your Fiscal Consultants

Name: Office Phone: E-mail:

Neil Allen (419) 668-2914 neil.allen@ode.state.oh.us

Dale Burdett (330) 343-8875 dale.burdett@ode.state.oh.us

Bob Foss (330) 232-2835 robert.foss@ode.state.oh.us

Dean Horton (513) 770-4349 dean.horton@ode.state.oh.us

Rob Miller (419) 523-5088 robert.miller@ode.state.oh.us

Jackie Osborne (740) 592-6622 jacalyn.osborne@ode.state.oh.us

Doris Pearce (330) 898-2256 dorpearce@aol.com

Londa Schwierking (937) 570-0604 londa.schweirking@ode.state.oh.us

Janet Smalley (740) 947-7746 janet.smalley@ode.state.oh.us

Pat Williard (740) 503-9869 patricia.williard@ode.state.oh.us

Roger Hardin (614)466-5568 roger.hardin@ode.state.oh.us

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