MASBO 5.5.16 Presentation LRFP FINAL - no notes or pics ... · MASBO Annual Conference May 5, 2016...

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How to create a transparent, collaborative, data-driven community process for

long-range financial planning

May 5, 2016

Patricia Magnuson, Executive Director of Finance and Operations

Kelly Benusa, Director of Business Services

Mike Hueller, Coordinator of Accounting/Payroll

Cindy Brown, Coordinator of Accounting/Payroll

Anne Ramsey, Coordinator of Purchasing and Warehouse

MASBO Annual Conference May 5, 2016 ISD 279 – Osseo Area Schools

Outcomes

◦ Understand the collaborative process used to develop the LRFP framework ◦ Learn about budget tool development and

the specific purpose of each

◦ Learn how to engage stakeholders in financial planning


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Per

cent

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20

40

60

80

100

Free or reduced lunch eligibility by site

Eligible for free or reduced lunchNot eligible


Percent

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40

60

80

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Amer Ind Hispanic Asian Black White

Racial composition by site


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}  Review historical approach to budgeting }  Research finance and budgeting practices }  Establish guiding principles }  Develop long-range financial planning model

& framework }  Design long-range financial forecasting

model


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}  Program-based budgeting system }  Traditional incremental budgeting process }  Strategic plan budgeting

}  Integrated budgeting approach


Mission/ Strategic Plan

Our model and framework is centered on accomplishment of our system's mission and strategic plan.

Legal Our work will comply with legal requirements and School Board policies.

Process We will use a data-driven, collaborative decision-making process.

Resources Our model and framework will guide the distribution of resources in priority order, based on data, research and strategic priorities.

Communication Our work will be communicated to our school community.


Mission

Staff responsibilities LRFP guiding principles CIP Budget Organizational Complement

School Board direction Strategic priorities Forecast Budget targets Feedback


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}  Long-range financial forecast model

}  Continuous improvement plan

}  Program Efficiency Abandonment and Redirection (PEAR) Narrative modeled after Montgomery County Public Schools


RevisedBudget2016 Projected2017 Projected2018 Projected2019 Projected2020

Revenueswithtactics $221,164,868 $222,583,101 $225,904,142 $228,694,954 $229,144,026Expenditureswithtactics 218,785,916 226,990,388 236,126,082 244,728,627 252,917,407

Tacticsrelatedtorevenue

Revenueassumptionbasicformulaincreaseof2.0%forFY2017(Known)and1%basicformulaincreaseforFY2018andFY2020 2,211,649 1,123,974 1,143,475

Tacticsrelatedtoexpenditures

All-daykindergartenandgradespanchangetwoyearexpenseonly(Known) (255,372)Strategicprioritiesadditionalneeds 1,500,000Enrollmentalignmentadjustment(Known) $0 1,044,889 226,602 761,636Other-reducetrendto3.25% (1,093,930) (1,137,957) (1,179,415) (1,218,879)Synergytrainingoneyearexpenseonly(Known) (150,000)Operationalreductions (5,000,000)Targetedclasssizeneeds 450,318

Baselineoperatingbalance(posttactic)FundBalance(beginningofyear) 54,732,264 57,111,216 54,314,561 45,459,663 30,378,803FundBalance(endofyear) 57,111,216 54,314,561 45,459,663 30,378,803 13,206,141Changeinfundbalance $2,378,952 ($2,796,655) ($8,854,898) ($15,080,859) ($17,172,663)

FundBalanceTargetFundBalanceasa%ofBudgeted/ProjectedExpenditure 26.10% 23.86% 19.27% 12.46% 5.34%5%ofBudgeted/ProjectedExpendituresMinimum $10,939,296 $11,379,570 $11,794,151 $12,188,791 $12,373,008

ProjectedRevenueAssumption(FY2017-FY2020) 0.00%ProjectedExpenditureAssumption(FY2017-FY2020) 3.75%


} Department Continuous Improvement Plans (CIPs) ◦  Major Function

◦  Key Essential Services

◦  Key Performance Indicators

◦  Goals based on Plan, Do, Study, Act based on Baldrige Model


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}  Business Services Example

}  Provide leadership on emerging and existing financial opportunities }  Ensure compliance for responsible areas pertaining to federal state

and local laws and guidelines

}  Provide customer service to internal and external customers in order to meet and exceed their needs based on best practices

}  Sustain and ensure the operational processes supporting data integrity

}  Provide governance to the system of management and controls exercised in the stewardship of financial resources

}  Design and deliver work processes to increase efficiencies and enhance workforce capacity

}  Utilize performance measures and indicators to identify operational, budgetary, and financial opportunities


}  Business Services Example

}  Major Function - Business Services functions are designed to plan, develop, secure, and effectively manage fiscal resources in compliance with internal and external accountability requirements, which encompass accounting, accounts payable, payroll, purchasing, and warehouse, to support the education of all students.


FY2013

FY2014

FY2015

Percentageofinvoicessuccessfullyprocessed 99.1%

99.0%

99.4%

PercentageofpayrollchecksiniAallyprocessedcorrectly 99.97% 99.96% 99.96%

PercentageofW-2scompletedaccuratelybyJanuary31st 98.98% 99.98% 99.34%

Moody’sInvestorsServicehasassignedanunderlyingraAngtothedistrict’sgeneralobligaAonbonds Aa1 Aa1 Aa1

ReceivedacleanauditofitsFY2015finances.Theindependentauditorsaidtheschooldistricthas“excellentfinancialrecordkeepingandreliablefinancialdata.”

Yes Yes Yes

OsseoSchoolDistrictwasawardedtheAssociaAonofSchoolBusinessOfficialsInternaAonal’sCerAficateofExcellenceinFinancialReporAng.

Yes Yes Yes

Budgetsummarygoalwithin2%ofamendedbudget 1.95% 1.31% 1.32%

Business Services Example


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}  PLAN: Identify the gap and the approach }  DO: Develop and Implement Action Plan }  STUDY: Analysis of data after implementing

specific steps in the action plan. }  ACT: Standardize the improvement and

establish future plans.


}  Program, Efficiency, Abandonment, and Redirection (PEAR) proposals: ◦  Instructions ◦ Narrative ◦ Worksheet ◦ LRFP Analysis

MASBO Annual Conference May 5, 2016

ISD 279 – Osseo Area Schools

}  Describes budget proposal }  Identifies productivity improvements }  Assess impact }  Requires consultation and planning across

departments }  Considers legal requirements and board

policies


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Division Dept.

I (Instructional) or N (Non-Instructional)

- insert code from key below Proposed Proposal FY 2016

FTE FY 2016 Budget

FY 2017 Proposed

Equivalent FTE change

FY 2017 Proposed

Budget change

PEAR Reference Number Impact of Proposal

Object Code

Impacted Budget Code

Bargaining Unit Affected

TBD TBD 4 Add supplies From FY 2016 Budget Worksheets $19,957 BA-01 insert answer from PEAR Narrative #4 TBD TBD ESP Class 2

TBD TBD 6 Eliminate ESP 1 FTE 10.00 From FY 2016 Budget Worksheets (1.00) ($19,957) BA-02 insert answer from PEAR Narrative #4 TBD TBD ESP Class 2

TOTAL (1.00) $0

I (Instructional) or N (Non-Instructional) Key Code Description

1 I - Instructional support and staff

2 N - administration

3 N - Athletics/co-curriculars/activities

4 N - purchased services and supplies

5 N - staff development 6 N - support 7 N - transportation


}  Develop essential services

}  Define metrics to measure effectiveness

}  Review and adjust annually

}  Initial reaction …


You want me to do what?!

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} Commitment to process

} Lack of understanding } Fear of loss } Time required


Ø Secure superintendent and board

Ø Include all management

Ø Inform and influence

Ø Be prepared


Ø Collaboration

Ø Inclusion

Ø Communication

Ø Repetition


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Ø Seek feedback

Ø Debrief

Ø Demonstrate benefits


Ø Instruct and educate budget managers

Ø Provide a single contact

Ø Create a workgroup

Ø Adhere to timeline


Ø Comprehensive understanding

Ø Data driven decisions = better results

Ø Increased trust


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Ø Demographicdata

Ø Revenuecomparisonsandassump?ons

Ø Expenditurestrend

Ø An?cipatedadjustmentsfornext2fiscalyears

Ø Fundbalancepolicy

Ø Fundbalancehealth


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RevisedBudget2016 Projected2017 Projected2018 Projected2019 Projected2020

Revenueswithtactics $221,164,868 $222,583,101 $225,904,142 $228,694,954 $229,144,026Expenditureswithtactics 218,785,916 226,990,388 236,126,082 244,728,627 252,917,407

Tacticsrelatedtorevenue

Revenueassumptionbasicformulaincreaseof2.0%forFY2017(Known)and1%basicformulaincreaseforFY2018andFY2020 2,211,649 1,123,974 1,143,475

Tacticsrelatedtoexpenditures

All-daykindergartenandgradespanchangetwoyearexpenseonly(Known) (255,372)Strategicprioritiesadditionalneeds 1,500,000Enrollmentalignmentadjustment(Known) $0 1,044,889 226,602 761,636Other-reducetrendto3.25% (1,093,930) (1,137,957) (1,179,415) (1,218,879)Synergytrainingoneyearexpenseonly(Known) (150,000)Operationalreductions (5,000,000)Targetedclasssizeneeds 450,318

Baselineoperatingbalance(posttactic)FundBalance(beginningofyear) 54,732,264 57,111,216 54,314,561 45,459,663 30,378,803FundBalance(endofyear) 57,111,216 54,314,561 45,459,663 30,378,803 13,206,141Changeinfundbalance $2,378,952 ($2,796,655) ($8,854,898) ($15,080,859) ($17,172,663)

FundBalanceTargetFundBalanceasa%ofBudgeted/ProjectedExpenditure 26.10% 23.86% 19.27% 12.46% 5.34%5%ofBudgeted/ProjectedExpendituresMinimum $10,939,296 $11,379,570 $11,794,151 $12,188,791 $12,373,008

ProjectedRevenueAssumption(FY2017-FY2020) 0.00%ProjectedExpenditureAssumption(FY2017-FY2020) 3.75%

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FY2016Budget 63% oftotalGeneralOperating/Transportationbudget$215,802,477FY2016Adjustment ofGeneralOperating/Transportationtotalnet$0adjustmentAdjustmentdetailislistedineachdepartment'sbudgetsummaryunderchangefromprioryearsection.

GeneralOperating/TransportationBudgetDivisionofLeadership,TeachingandLearning(DLTL)Departments

$135,296,577($154,000)

CIESprovidesstaffdevelopmentintheareasofcurriculum,instruction,andassessment;leadsprogramimprovementprocessestoaligncurriculum,instruction,andassessment;andensureshighqualityinstructionthatleadstoincreasedstudentlearningandequitable

DLTLOperationsisresponsiblefordeveloping,implementing,managing,andevaluatingoperationalandmanagementsupportsystemsforelementaryandsecondarysitesandsystemlevelefforts.

DLTL OperationsandSites Curriculum InstructionandEducationalStandards(CIES)

FY2016Budget FY2016Budget%ofGeneralOperating/TransportationBudget %ofGeneralOperating/TransportationBudgetPerPupilCost PerPupilCostFullTimeEquivalent(FTE) FullTimeEquivalent(FTE)

$3,806.231,104.41

FY2016Budget FY2016Budget$84,376,616

39.10%$6,043,895

64.19$272.64

2.80%

-Add$13,332fromPEAROP-01largesitesupport

-Add5.13FTEclassroomteachersformiddleschool8periodschedule

ChangeFromPriorYear ChangeFromPriorYear

-Reducestaffdevelopment/travel

-Redeploy21.3FTEclassroomteacherstoalignwithenrollment-Transferredsalarybudgetcapacityof$1,065,212forFY2016toDLTLOperationsandSites

-Transferredsalarybudgetcapacityof$1,065,212forFY2016toDLTLOperationsandSites

-Allocationandattritionbasedon51.5retireesforFY2016

-Add$391,468fromPEAROP-01largesitesupport

-Add1FTEAdministrativeEducationalSupportProfessional(AESP)positionateachhighschool

-Add4.27FTEelementaryESPpositions

-Reassign($540,000)forgradespanproject

}  FY 2014 Reducing budget capacity }  FY 2015 Enhancing budget capacity }  FY 2016 Redeploying budget capacity

}  FY 2017 Enhancing budget capacity


Strategic priorities

Continuous improvement plan, Program Efficiency,

Abandonment and Redirection planning

Feedback & board budget

planning

Approve budget

adjustments and levy

Complete budgets and monitor legislation

Final approval of

budgets

Mission

Use of the LRFP framework results in budget decisions that support strategic priorities


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} Outcomes for budget adjustments

◦ Align with mission and strategic plan

◦ Involve stakeholders

◦ Maintain required fund balance


}  Budget adjustment proposal ◦  Identify legally required and mandated essential

services and programs

◦  Formal analysis

◦  Base quality education provided

◦  Board policies considered

◦  Program Efficiency Abandonment and Redirection (PEAR) process utilized

◦  Staff and citizen input solicited and considered


Patricia Magnuson [email protected]

Kelly Benusa [email protected]

Mike Hueller [email protected]

Cindy Brown [email protected]

Anne Ramsey [email protected]


MASBO 5.5.16 Presentation LRFP FINAL - no notes or pics ... · MASBO Annual Conference May 5, 2016...

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