Financial Final Reflections

In looking at the coursework I think back to a statement made in the first course of the superintendents program and in one of my meetings with Dr. Creel – the school finance class will be the hardest class you will take in the program.  I whole heartedly agree!  The assignments were challenging but also very informative and I truly feel like I have some knowledge in the world of school finance.  I can carry on a conversation about school funding and how it has changed due to the first week’s assignments that covered the history of school finance in Texas.  I stand by my response in the first assignment – I still believe that we are living in an era of education that will be studied in the near future by a new crop of Lamar students seeking certification.  I can have a conversation about how the funding formula has not kept up with the times and the districts across the state are finding themselves struggling to find ways to make ends meet.  In our district I was able to actually start a conversation with our superintendent about the fact that almost ten years ago before the lowering of the tax rates, the PISD board did not think long term and we are now missing out on funding due to the fact that they did not raise the tax rate to the maximum $1.50 allowed.  In week 2 it was eye opening to learn about a goal driven budget and to know that I was not 100% certain what the goals of the board were – making it next to impossible to have a goal driven budget.  Also the time line that is followed in the budget process helped make me aware of the time lines and the needs of the budget officer employed by our district.  My favorite assignments included the comparison of the two districts.  Being able to look at the same set of standards and seeing the differences that helped make one district financially more stable helped me to realize that as I begin the process of applying for superintendent’s jobs, I need to pay careful attention to the information provided on the TEA website – both academically and financially.  I finally understand the acronyms of ADA and WADA!  Now when I took money with the budget officer and she continues to harp on our student attendance, I understand the difference it can make in the financial health of the district.  Finally, the discussion of the differentiated staffing forced me to think outside the box and ways that we might be able to benefit from the “new” old idea.  I think we are definitely working on an example of differentiated staffing with the use of our secondary teachers as part of our elementary RTI process.  Overall, while this may have been the most difficult class, I think it is also one of my favorites and one that I feel like I really learned something that I did not feel like I had a clue about.  The journey to get more information concerning school finance will continue – but at least it has started!

Standards and Ethics

Violations to the TAC Chapter 247 have and will continue to occur due to the mindset that rules do not apply or the denial of the fact that the administrator could be caught in one of these violations.  First, an administrator who accepts a bribe or a promise of services or kickbacks when hiring for an open position would be in direct violation of Standard 1.5.  These offers of favors could potentially cloud professional judgment or make the administrator feel beholden to an individual or group.  Another example of a violation that could occur would be an administrator who forges service records that could result in that administrator being placed on a higher pay scale.  This would be a violation of Standards 1.1 and 1.6.  Finally, a violation of Standards 1. 2 and 1.3 would occur if administrators were to ask for companies to provide receipts showing fraudulent charges or misrepresented items that allow for the administrator to be reimbursed for money not spent or allows them to have those items for personal use paid for by the district’s monies. 

In Section 2, Ethical Conduct Towards Professional Colleagues, an administrator would be in violation of Standard 2.1 by divulging confidential health information about a colleague in order to better their chances at an open position or promotion.  A second violation could occur if an administrator were to pass over an applicant based on the fact that he did not believe the candidate could control disciplinary issues because the candidate was a female or did not hire a candidate that had different religious or political views.  This would be in direct violation of Standard 2.5.

If an administrator violates Standard 1.5 and is exposed for doing so will have all decisions that have previously been made called into question.  The doubt that would be in the minds of the school’s stakeholders would severely limit the administrator’s ability to lead a district.  The administrator could also face being fired due to this lapse in judgment.  The administrator should always model and promote the highest standard of conduct, ethical principles, and integrity in decision making, actions, and behaviors.  To help prevent this from happening, there should be a chain of command in the hiring process with input being provided by all the interviewers. 

Possible results to an educator violating Standards 1.2 and 1.3 could include being required to repay any money, being fired and even jail time.  Administrators should be very clear about receipts turned in and any items purchased that will be used for personal use.  To prevent this possibility from occurring, a multi-level accounting system should be in place that would have a system of checks done by more than one set of eyes. 

An administrator that is guilty of violating Standard 2.5 could open the door for former applicants to file claims of prejudice or discrimination.  He could face reprimand or even being fired.  Questionnaires and employment applications should be consistent.  Again, interviews should be done by more than one person to prevent one administrators bias from preventing quality applicants from being hired.  

Differentiated Staffing

Jay Cantrell

Differentiated staffing is a method of dividing the tasks of educating students among  two or more professionals with differing levels of education and expertise.  Teachers who performed the higher levels of education would be considered more valuable and compensated for this.  To use a sports analogy, they would be given the franchise tag – the teacher the school was building student education around.  Teachers with less education could be responsible for the more mundane tasks associated with teaching that would free up the upper level teachers to concentrate more on impacting the lives of students. 

One example of differentiated staffing that we have implemented this year on our campus is in our RTI processes.  We have two teachers who are responsible for the data disaggregation that they use to plan for RTI for the elementary students.  They will also be responsible for working with some of the students being pulled even though they are not their classroom teacher.  We are also incorporating our secondary staff members who do not have a full teaching schedule due to be an electives teacher.  When first approached with this idea the teachers told me that they were not certified in elementary and that if they wanted to work with the young students they would have chosen that teaching pathway.  My responses… first, these are OUR students.  We are responsible for the education that each one of our 216 students receive.  Second, we have asked UNCERTIFIED, NON-DEGREED para-professionals to do this for years.  (More on this later!)  Each of these teachers have had children and some even had grandchildren.  In my mind they are highly qualified to deal with helping with RTI!  So we have two teachers that are running the elementary RTI program that is staffed by 7 secondary teachers with openings in their daily schedule.

Another example of differentiated staffing concerns the use of paraprofessionals in the classroom.  We have paraprofessionals that do things for the teachers that allows the teacher more time to interact with the students.  Some of those tasks include:  running off papers, TPRI testing, 1 on 1 reading, and the all time teacher hates – cafeteria duty for breakfast and lunch.  By a paraprofessional performing these tasks, we have freed up teachers for student teaching or planning with another teacher which directly impacts the students’ education.

One other example of differentiated staffing on our campus involves our teaching of the required foreign language at the secondary level.  We do not have a certified Spanish teacher on staff.  Instead, we have contracted with a certified teacher who has produced video lessons, engages in teleconferencing, and provides all the lesson planning including daily work, projects and tests.  We have two teachers that are our class monitors who follow the lesson guides and lead discussions on day that video lessons are not used.  While they are not certified in Spanish, they are degreed and certified in another area and are providing the in person support needed for our students to have a better chance at successfully acquiring a second language.

All of these three positively impact our school environment and the success we are striving to attain.  The RTI process is a work in progress as we are just starting it this year.  It will not look the same as it does now in May is my guess as we will continue to make changes to improve the program and provide a better intervention.  By focusing on the individual needs of the students, we will eventually see students at the higher grade levels who are further along and better prepared for the challenges of a more rigorous educational system.  The paraprofessionals being used definitely provide more time for teachers and students to be working together.  The planning time also allows for the “two heads are better than one” mentality to show promising results when it comes to the lessons being used in the classroom.  Our students have just started using this new Spanish program this year.  We are already seeing improvements and more Spanish being learned in the first six weeks.  This has been a very positive change in providing our students an opportunity at their foreign language being more than a Rosetta Stone program.

Has differentiated staffing ever truly, completely died out?  My guess is no.  The trick is going to be trying to find creative ways to allow more adults to have an impact on the lives of the students.

Trevor Edgemon

There are two ideas of differentiated staffing. 

The first idea behind differentiated staffing is that different teachers should be paid differently according to how well they do their job, and the different responsibilities they complete.  This is the incentive to get teachers to do the kind of things that are necessary to be great teachers. Differentiated Staffing means different pay for different responsibilities.  The best teachers should be earmarked as a valuable resource. The ideal situation is to get these outstanding teachers to influence the lives of more kids. The old system actually works against this concept. Great teachers get the lower class size, and thus influence fewer kids. The old system also influences great teachers to go on and become administrators. We use to have this model in the career ladder.  I understand this concept is used in the business model but I am glad we do not use this type of model.  My brother has been in the private school sector his whole life and they use this model.  We do not have a big enough pool of applicants to make this work.

The 2^nd type of Differentiated staffing was in the lecture, Dr. Lu Stephens stated, “Differentiated staffing is a concept that proposes specialized use of personnel. Differentiated staffing could create greater efficiency in a school district by assigning teachers and other educators different responsibilities based on carefully prepared definitions of many teaching functions. It would analyze essential tasks and create a means to implement new educational roles for teaching the students. The results could create significant operational cost savings for a school district.”

Differentiated staffing can impact the organization of school staff based on varying levels of experience and qualification. In a differentiated staffing structure, teachers and other instructional staff are assigned different titles and sometimes different pay grades based on their experience or certifications.  Differentiated staffing models are premised on the idea that schools can improve the overall effectiveness of teaching staff by designing a staff structure that recognizes and maximizes the strengths of its best teachers. The design of most differentiated staffing models places fully licensed and credentialed teachers who demonstrate instructional success in positions as lead or master teachers. These teachers often act as mentor or coach to newer teachers or to those who have been identified as needing improvement.

An example of differentiated staffing within my district in the area of instruction would be the use of instructional aides within the classroom to provided instructional support.  We use the model from the above paragraph.  The teacher of record is the master of the content and the instructional aide can offer the focused delivery.  We have utilized this for the regular education class and the special education.  With special education we use the inclusion model.  The special education teacher, who works with the regular education teacher on curriculum, can provide content mastery and more specific instruction on a one on one basis.  This concept allows the teacher of record to cover more material within a class period allowing more learning to occur. Instructional aides at my school can also help with direct instruction, with classroom management, and logistics. In addition, the number of regular certified teachers would be less. However, the number instructional aides increase. This results in a smaller budget for staff salaries and benefits. 

All children learn, but not all learn the same way. Differentiated staffing allows the schools to look for teachers with different specialties and train teachers to better meet the needs of the students.

Shawn Clubb

Differentiated staffing is a concept that seeks to make better use of educational personnel. In the lecture Dr. Lu Stephens compared differentiated staffing to that of a doctor’s office. She explained that doctors do not take blood pressures, weight, temperature, or medical history reports. They are specialized in seeing patients and diagnosing them therefore they have someone else do the routine work. They have office people that take payments, make appointments and put medical information into the computer. They also have medical assistants that do the routine work such as taking vital signs, medical history, and giving shots. She said that just like doctor’s offices, school districts could “create greater efficiency by assigning teachers and other educators different responsibilities based on carefully prepared definitions of many of the teaching functions.”

In schools today, teachers have many responsibilities. This is especially true in the smaller districts. It is thought that differentiated staffing would alleviate some of the pressures associated with these many responsibilities.  It refers to classroom teachers at various responsibility levels and pay, subject specialists, special service personnel, and a number of sub professionals and non-professionals.

An example of differentiated staffing within my district in the area of instruction would be the use of instructional aides within the classroom to provide instructional support.  The teacher is the master of the content and presents the lesson while the instructional aide can offer the specialized delivery. The instructional aide can help make sure accommodations and modifications are being carried out in the classroom (ie. Oral testing, note taking assistance etc…). Therefore, the teacher can cover more material during a class time which allows more learning to occur. Having an instructional aide in the classroom helping some students with more specialized learning helps keep the teacher from taking learning time to provide these services.

The Audit Process

How is the external auditor selected?

Our auditor was selected for us in 2001 when the district was nearly bankrupt and had a business manager appointed.  At one point PISD actually had a NEGATIVE bank statement. Typically a board or superintendent conducts interviews and chooses the auditor that meets the specifications agreed upon. There can be a bidding process as well but not many schools use that method.

How does the auditor conduct the audit?

A team of auditors come in and ask for the district’s financial files.  We send them a pretty extensive amount of information prior to their arrival for them to look over. When they come they pull documents to verify financial expenditures. They get a list from TEA about what to look at each year and from year to year those items can be very different.

What does the audit conclude about district financial procedures and

actions?

They look for fraud or expenditures that do not follow normal accounting rules. GASB has a specific policy or set rules that are to be followed when dealing with government funds. They make sure we are following this set of rules, so the report will say that we have met the requirements.

How are the results communicated?

The auditor comes and gives a written and oral report to the board indicating actual expenditures and if we put money in fund balance or if we had to dip into the fund balance for the previous year.

Salaries

At PISD we have 24 certified teachers on staff that are responsible for educating 215 students in grades Pre-K through 12^th grade.  Our school district has allocated $1,353,953 for the salaries of these teachers.  That accounts for 57% of our $2,382,981 budget for the 2012-2013 school year.  In visiting with our superintendent, we looked at a coupe of different scenarios that could effectively result in a pay raise for these certified staff members.

First, we looked at a 5% increase across the board.  That would result in an increase in the budget of $68000 for this school year.  That raise would average out to a little over $2800 which would effectively increase the gross pay of the individual a little over $200.  Option 2 would be to pay all of the insurance of these staff members.  This would be a more costly alternative for the district in the long term.  With the mid-level insurance, it would require the same $200 monthly increase PLUS the commitment to do the same thing every time insurance companies increase the premiums which seems to be every year.

Ultimately the $200 raise due to the 5% increase would not be seen in the check of the staff member but it would prevent a lower take home pay for the teacher when compared to the year before and factoring in the increase in the premiums.  This would only be a temporary fix as the insurance premiums are likely to increase the following year.  A raise is always a welcomed announcement but it can come at a cost.  We are one of many districts that have adopted a deficit budget.  While we are hopeful that we will not actually see this come to fruition, we try to ere on the side of being prepared for it and try to be cautious in spending to prevent it.  An increase in teacher pay would not be a good thing to hear in the community where most people are low income – near poverty levels – or unemployed.  A fine line must be walked in order to present the information in a manner that shows the need for this increase when in the community are going to be experiencing the opposite financial situation.

2 District Comparison

Jay Cantrell

District 1: Student population: 830 2% African American 22% Hispanic 76% White 0% Other 43% Eco Disadvantaged 4% LEP 10% SPED District 1 highlights: Total Revenue per pupil: $10,529 Total Operational Expenditures per pupil: $8,611 Total instructional per pupil $4,619 Fund Balance: 2,552,074      39% of 2008-09 budget Average teacher salary: $39,771 Teacher average years experience 13.3 Teacher turnover rate: 16.4

District 2: Student population: 32,326 7% African American 56% Hispanic 31% White 7% Other 54% Eco Disadvantaged 33% LEP 9% SPED District 2 highlights: Total Revenue per pupil: $10,316 Total Operational Expenditures per pupil: $8,908 Total instructional per pupil $5,494 Fund Balance: 42,780,035      16% of 2008-09 budget Average teacher salary: $50,307 Teacher average years experience 11.6 Teacher turnover rate: 15.7

Looking at the data above, our group has concluded that the districts are indeed different.  When you consider the student populations, district 1 is much smaller obviously.  Looking at the percentages of the sub-populations we see that while the SPED pops are very similar in percentages, the overall number would be much higher for district 2.  District 1 would have approximately 85 SPED students compared to 2910 for District 2.  Also, district 2 has a much higher percentage of LEP students and a higher percentage of economically disadvantaged students.  District 1 would have approximately 35 LEP students and 360 economically disadvantaged students.  District 2 would have approximately 10,675 LEP students and 17,460 economically disadvantaged students.  I bring this up because we have a higher total instructional per pupil amount for district 2 at $5500 per pupil compared to $4600 for district 1.  This could be misleading as it could be assumed that district 2 is in better financial shape due to the amount spent on instructing their students.  Remember, those special populations like SPED, LEP and the economically disadvantaged all require more money to educate and allow them the best opportunity at educational success.

While the total revenue per pupil is only about $213 more in district 1, this represents a great deal less funding for district 2 because of the number of students the district serves.  When you multiply the $213 by the 32,326 students educated in district 2, it totals just under 6.9 million dollars more they would receive if the revenue per pupil matched district 1.  Additionally, it appears district 2 must have to pay their teachers a higher salary to retain quality teachers.  District 2 has the lower teacher turnover rate, but is a minimal difference, and the lower average years of teacher experience by nearly 2 years.  

Teacher salaries are likely to be highly impacted if funding is decreased for district 2 especially considering that their current fund balance is only 16% of their 2008-09 budget, compared to 39% of district 1’s budget.  Many times a smaller district may also mean a rural area and cost of living may be less.  In a bigger district you may be in a metro-plex type of area and cost of living is normally higher.  This is important due to the differences in salaries for the two schools.

Dr. Stephens stated in the lecture, “Economy of scale is a concept that indicates that increasing the size of an organization can result in a lower per unit production cost.”. Thus the larger the district, the more funding they would receive. This should be realized in a lower operating cost per student. Unfortunately, district 2 has a higher operating cost per student at $8900 compared to $8600 for district 1.  Again, I feel this can be attributed to the higher special populations and also the teacher salaries..

In conclusion, district 1 appears to be in a better financial situation with total revenue of $10,529 per student. This is $213 more revenue per student than district 2.  District 1 also has a higher percentage of their budget in the fund balance which would sustain them in the case of an emergency.  

Trevor Edgemon

Using 2009 District Snapshot data, our group has determined that the two districts are quite different.

District 1: Student population: 830 2% African American 22% Hispanic 76% White 0% Other 43% Eco Dis 4% LEP 10% SPED District 1 highlights: Total Revenue per pupil: $10,529 Total Operational Expenditures per pupil: $8,611 Total instructional per pupil $4,619 Fund Balance: 2,552,074, 39% of 2008-09 budget Average teacher salary: $39,771 Teacher average years of experience 13.3 Teacher turnover rate: 16.4

District 2: Student population: 32,326 7% African American 56% Hispanic 31% White 7% Other 54% Eco Dis 33% LEP 9% SPEDDistrict 2 highlights: Total Revenue per pupil: $10,316 Total Operational Expenditures per pupil: $8,908 Total instructional per pupil $5,494 Fund Balance: 42,780,035, 16% of 2008-09 budget Average teacher salary: $50,307 Teacher average years of experience 11.6Teacher turnover rate: 15.7

As indicated in the lecture an “economy of scale is a concept that indicates that increasing the size of an organization can result in a lower per unit production cost.” With this in mind we must consider the impact of an economy of scale on school districts and the costs associated with the education of our children. Obviously the larger the organization, or in this case the district, the more funding they would receive. This would be realized in a lower operating cost per student. To further explore this concept let’s look at two district with very different demographics.

When examining the two districts, district 2 is much larger than district 1. While the total revenue per pupil is only about $213 more in district 1, this represents a great deal less funding for district 2 because of the number of students the district serves. Additionally, district 2 must have to pay their teachers a greater salary to retain quality teachers as indicated by the higher teacher turnover rate and lower years of teacher experience in district 2, compared to district 1. This results in more revenue that must be allocated to operations and taken away from instruction. Teacher salaries are likely to be the most impacted when funding is decreased for district 2 especially considering that their current fund balance is only 16% of their 2008-09 budget, compared to 39% of district 1’s budget.  Many times a smaller district may also mean a rural area and cost of living may be less.  In a bigger district you may be in a metro-plex type of area and cost of living may be more.  I state this because of the difference in salary.

My conclusion: district 1 appears to be in a better financial situation per student with total revenue of $10,529 per student. This is $213 more revenue per student than district 2, however district 2 has a larger student base which spreads the operating cost more and results in a lower total operating cost per student.

Shawn Clubb

I have always worked in fairly small school districts and have continuously heard about the possibility of consolidation. However, I never realized the financial advantage that bigger districts have over smaller ones. This week our assignment had us analyze the contrasts between large and small districts and how economy of scale may be the root of these contrasts. In the lecture Dr. Lu Stephens explained economy of scale as “a concept that indicates that increasing the size of an organization can result in a lower per unit production cost.”  As a school district’s scale of operations becomes larger, economies of scale occur which reduce costs. By consolidating schools, costs for maintaining separate campuses would decrease.

Upon reviewing these districts I found that District 1 is a fairly small district with 830 students and 130 staff members. The average teacher salary is $39,771. The total revenue per student is $10,529 which equals a total revenue of $8,823,250. Operating expenses were $8,611 per student which equals out to $7,216,335 for its total operating expenses. Because the total operating expenditures are so great per student it reduces the amount of funds available for improvement in other areas.

District 2 is significantly larger with 32,326 students and a staff of 4,582. The average teacher salary in District 2 is $50,307. Their revenue per student is $10,316 which is a total revenue for the district of $329,638,930. The operating expenditures for the district is $8,908 per student which equates to a total of $284,664,004.

Both districts have similar revenues per pupil and similar operating expenditures per pupil. However, when you look at total revenue for the districts District 1 receives $8,823,250 and District 2 receives $329,638,930. District 2 receives a significant amount more than that of District 1. After expenditures, District 2 has a substantial amount of money left over. The lecture indicates that the savings of having a larger district can be added to teacher salaries. This would explain the difference of District 1’s teacher salaries at $39,771 and District 2’s teacher salaries at $50,307. This could also explain the difference in why District 2 has more teachers with advanced degrees.

When looking at these two districts from a financial standpoint it appears that District 2 has more to offer than District 1. They have more money so they can hire more teachers, spend more toward educating their students, etc. However, when looking at testing scores District 1 outperformed District 2. Therefore, is the concept “economy of scale” beneficial to the students?

When looking at larger districts and smaller districts it may appear that larger districts have more to offer in terms of finances. However, are larger districts really beneficial for the students? My thoughts remain the same. I feel that in smaller districts the students have a less chance of becoming “lost”. Smaller schools offer the students more of a chance to participate in extracurricular activities and keep them more involved. From looking at area schools I feel that the smaller districts have less discipline problems and safety concerns. Therefore, while larger districts can offer more specialized courses and more instructional programs, I feel that smaller districts can offer the students more in terms of positive school climates.

FIRST

Jay Cantrell

The definition of the FIRST system used by the Texas Education System in its most simple terms is the financial report card of a school district or open-enrollment charter.  Every district will be assigned a financial rating of Superior Achievement, Above Standard Achievement, Standard Achievement, Substandard Achievement or Suspended – Data Quality.  The FIRST system is also expected to encourage districts and open-enrollment charters to provide maximum financial support for instructional purposes by proper management of the district’s financial resources.  The district’s financial procedures will also be scrutinized during the FIRST evaluation process.  Just as the superintendent is responsible for the district’s educational report card, he or she is also responsible for the financial report card and must be aware of areas needing improvement and make plans to address those areas.  While there are several important components of the FIRST system, our group has determined that reserve funds, transparency, and consistent assessment of districts across Texas to be the most critical components.

In 2002 FIRST was one of two accountability systems TEA developed for the purpose of monitoring and holding districts accountable for financial decisions that were made.  A  school’s FIRST Annual Financial Management Report template consists of the following items:

Superintendent's Current Employment Contract

Reimbursements received by the Superintendent and Board Members

Outside Compensation and/or Fees Received by the Superintendent for Professional Consulting and/or Other Personal Services

Gifts Received by Executive Officers and Board Members

Business Transactions Between School District and Board Members

Summary schedule of Data Submitted under the Financial Solvency Provisions of TEC 39.0822

Additional Financial Solvency Questions

A very important part of the superintendent's job is to monitor, analyze, and develop improvements through this rating system process to help improve the district’s education of students and to make sure district resources are optimized for students’ learning and safety.

Our first component that we found to be most important was accountability.  Accountability ensures that districts have a valid, objective system in place to measure financial compliance and efficiency.  This will help to insure that a district is managing resources responsibly so that allocations to instructional practices are kept as the primary focus. 

Next we chose self-monitoring due to the fact that it develops an instrument with measureable components and weighs them in order to paint an overall picture of the financial health of the district and outlines specific objectives for districts to work on to improve financial ratings.  For example, currently districts are required to have 60 days of operating expenses available for emergency situations. Districts that have accomplished this financial goal are in better position to be able to handle changes in funding and the ever-changing economic conditions.

Finally our group decided upon public disclosure for its importance in providing an accountability rating that is accessible to the public. This allows the educational community stakeholders to view financial ratings and stay aware of any financial red flags.  This rating is based on standard indicators and gives an overall picture of the district’s finances.

Trevor Edgemon

The FIRST (Financial Integrity Rating System of Texas) is a financial accountability system that measures the degree to which school districts and open-enrollment charters the quality of their financial management practices and their ability to maximize the performance of their financial resources. This system is mandated by Texas Administrative Code (TAC), Title 19, § 109.1001. From the state’s viewpoint, the school districts in Texas maximize the use of funds when they work to provide the largest allocation possible for direct instruction purposes. The system will also disclose the quality of local management and decision-making processes that impact the allocation of financial resources in Texas public schools. There are several important components of the FIRST system. Our group has determined reserve funds, transparency, and consistent assessment of districts across Texas to be the most critical areas the FIRST system.

The” FIRST” started in 2002 and is one of two accountability systems that was started by the Texas Education Agency for the purpose of holding school districts accountable for financial resources. The School FIRST Annual Financial Management Report template consists of Superintendent's Current Employment Contract, Reimbursements received by the Superintendent and Board Members, Outside Compensation and/or Fees Received by the Superintendent for Professional Consulting and/or Other Personal Services, Gifts Received by Executive Officers and Board Members), Business Transactions Between School District and Board Members, Summary schedule of Data Submitted under the Financial Solvency Provisions of TEC 39.0822, and Additional Financial Solvency Questions). This is a very important part of the superintendent's job to monitor, analysis, and implement improvements through this rating system process to improve education and make sure resources are maximized for students learning and safety.

1. Accountability- ensures that districts have a valid, objective system to measure financial compliance and efficiency.  Managing resources responsibly so that allocations to instructional practices are kept as focus. 
2. Self-Monitoring- it develops an instrument with measureable components and weighs them in order to paint an overall financial picture while setting out specific objectives that districts can work on to improve their ratings.  Example: Currently districts are required to have 60 days of operating expenses available. Districts that have this cushion are in better position to be able to handle changes in funding and economic conditions.
3. Public Disclosure- It’s an accountability rating that is     accessible to the public. This allows stakeholders to view financial ratings.  This rating ranges from Superior Achievement down to Suspended—Data Quality. This rating is based on standard indicators and gives an overall picture of the district’s financial health.

Shawn Clubb

The School Financial Integrity Rating System of Texas, or School FIRST, is a financial accountability system for Texas school districts. “The system is designed to encourage Texas public schools to manage their financial resources better in order to provide the maximum allocation possible for direct instructional purposes” (19 TAC Chapter 109, Subchapter AA, 109.1001. Purpose of Financial Accountability Rating System).

Under School FIRST, data is collected to monitor the financial performance of school districts. It contains 22 questions, or indicators, which are designed to assess the district’s management of financial resources.

The first six questions are the Critical Indicators. They require a “yes” or “no” answer and they focus on the fund balance and annual financial reporting. To receive a Superior Rating a school district must be able to answer “yes” to these questions plus question 7.

I think Indicator 1 is one of the most important components. It asks, “Was the total fund balance less reserved fund balance greater than zero in the general fund?” This determines if the district has money set aside for emergencies, otherwise considered “savings.” It is important that the district have funds set aside for unexpected emergencies. When developing a budget it is impossible to know of all situations that may arise in the following year. Having extra money set aside will prevent using money set aside for other purposes.

Indicator 6 is also one of the most important components. “Did the annual financial report not disclose any instance(s) of material weaknesses in internal controls?” A “no” answer would mean that there are weaknesses in which a district cannot properly account for it use of public funds. Schools must accurately keep up with where money is going.

One last component in which I thought was important was Indicator 10, “Were there no disclosures in the annual audit report of material noncompliance?” This means there is no disclosure indicating the school district failed to abide by the laws, rules and regulations for a government entity.