Financial Policies and Procedures Committee Minutes

FINANCIAL POLICIES AND PROCEDURES COMMITTEE MINUTES

October 12, 2012

Meeting held:

Jefferson County Education Center; Basil T Knight Center, Mesa 51 School District; Swink 33 School District; Centennial BOCES, Greeley; San Luis Valley BOCES, Alamosa

Members Present

Kathleen Askelson, Jefferson County R-1 Steven Clawson, Denver 1

Denise Pearson, Kiowa C-2Brenda Johnson, Weld Re-8

Terry Buswell, Centennial BOCES Diane Raine, Mesa County Valley 51

Shae Martinez, Mapleton 1Velva Addington, Swink 33

Karen Andrews, Dolores Re-4AStacy Sondburg, Byers 32J

Amy Lyons, Bayfield 10JT-RDonna Villamor, Littleton 6

Kurt Shugars, Telluride R-1Linda Rau, Plateau Valley 50

Christy Hamrick, Garfield Re-2Chloe Flam, Northwest BOCES

Fran Christensen, Falcon 49

Ex-Officio Members Present

Leanne Emm, CDE Wendi Chapin, CDE

Terry Christensen, CDEKirk Weber, CDE

Adam Williams, CDECrystal Dorsey, State Auditor’s Office

Alternates Present

Shelley Becker, Adams 12Anthony Whiteley, St. Vrain Valley Re-1J

Rose Belden, Garfield 16

Guests Present

Dan Domagala, CDEDavid Schneiderman, CDE

Joshua Shoemaker, Jefferson County R-1Kay Bridges, Jefferson County R-1

Lisa Anderson, Jefferson County R-1Lorri Dugan, Jefferson County R-1

Joanne Vergunst, Fountain-Ft. Carson 8Marita Vogrin, Academy 20

Angie Skalla, Widefield 3Karen Cordova, Pueblo City Schools

Jon Kvale, Englewood 1Tammy Hohn, Engelwood 1

Mark Rydberg, Summit RE-1Suzi DeYoung, Brighton 27J

Kristine Githara, Cherry Creek 5 Terry Scharg, Gilpin County Re-1

Misty Manchester, Canon City Re-1Kay Schreiber, East Central BOCES

Lynne Winchell, Adams 14Eddie Starz, Adams 14

Trisha Morris, Denver County 1Suzanne Collins, Denver County 1

Molly Janzen, Poudre R-1 Stan Rodriquez, Adams-Arapahoe 28J

Dana Thomson, Harrison 2 Willie Leslie, Clear Creek Re-1

Don Trujillo, Pueblo 70Doug Moss, East Otero R-1

Phil Onofrio, Eagle County Re-50Chelsey Gerard, Eagle County Re-50

Jane Schein, St Vrain Valley RE-1JBrian Gustafson, Woodland Park Re-2

Cassie Walgren, CSI Richard Luna, CSI

Brian Lund, Estes Park R-3Mike Lee, Fort Morgan Re-3

Tim Unrein, Eaton Re-2Steve Towne, Thompson R-2J

Nicki Schmidt, Windsor Re-4Jan Brummond, Platte Valley Re-7

Mandy Hydock, Greeley 6Karin Slater, Montrose County Re-1J

Wendy Everett, Delta County 50(J)Tinneal Gerber, Moffatt County Re-1

Barb Hazelton, Mesa County Valley 51Vi Crawford, Mesa County Valley 51

Doug Shawcroft, Mesa County Valley 51Nancy Paregien, Mesa County Valley 51

Susan Doudy, Mancos Re-6Cathy Kiser, Meeker Re-1

Janelle Urista, Meeker Re-1Mike Thomas, Fowler R4J

Dawn Chavez, Crowley County Re-1JPaula Sublett, San Juan BOCES

Laine Gibson, Durango 9-R Rhoda Getz, Alamosa Re-11J

Janell Wood, Archuleta County 50JTJerene Wilkinson, Monte Vista C-8

Cindy Squires, San Luis Valley BOCES Betty Casanova, Center 20JT

Patty Walker, San Luis Valley BOCESTricia Smith, Pinnacle Charter School

Chris Telli, BDK, LLPJustine Petrone, Clifton Larson Allen

Shawn Sonnkalb, Clifton Larson AllenBryon Manning, Griego Professional Svcs.

Kimberley Temple, Wall, Smith, Bateman, Inc.

Members and Alternates Absent

Kim Krause, Akron R-1Dale Mellor, Steamboat Springs RE-2

Brad Arnold, Cherry Creek 5Bill Sutter, Boulder Valley RE-2

Melissa Brunner, Montezuma-Cortez Re-1JTerry Kimber, Widefield 3

Dave Montoya, Poudre R1Jack Bay, Douglas County Re-1

Sharon Thompson, Holyoke Re-1JEileen Johnston, James Irwin Charter

MINUTES

FINANCIAL POLICIES AND PROCEDURES COMMITTEE

October 12, 2012

1. Call to Order and Introductions

Leanne Emm called the meeting to order at 9:30 am. Those in attendance were asked to introduce themselves and their district.

1. Presentation of Agenda

Leanne presented the agenda with amendments. Shae Martinez made a motion to approve the agenda. Kathleen Askelson 2nd the motion. Motion carried.

1. Approval of Minutes

Denise Pearson made a motion to approve the minutes from the June 22, 2012 meeting. Steven Clawson 2nd the motion. Motion carried.

1. State Longitudinal Data Systems & ADE Update

Leanne introduced Dan Domagala the Chief Information Officer at CDE. Dan stepped through the Department’s RISE project website. RISE is the acronym for “Relevant Information to Strengthen Education”. The Department is establishing a strategy around collection, connection and conveyance of data and putting it into a high level strategy. The idea is to improve instruction through the use of timely information. There are four strategic objective within RISE; Capture, Link, Provide and Perform.

Capture is the movement or efficient collection of information from school district to the state. Link is the connections of those data elements, not only with the Department but also connections with other state education agencies. Provide is the work done around providing the information back to education stakeholders. Perform is the improvement of education outcomes. Within each of these four strategic objectives there are different projects and initiatives.

Projects within the Capture objective are the Data Pipeline, State Equalization rewrite and Data Warehouse expansion.

Projects within the Link objective are:

• The Enterprise Architecture Foundation Project to connect data silos that exist.
• Teacher- Student Data Link links student data to educators to improve instruction, increase educator effectiveness and support the continuous improvement of teaching and learning.
• P-20 Data Link project will link information from the Colorado Department of Education to information at five other state agencies, including the Colorado Department of Higher Education and the Colorado Department of Human Services. The ultimate outcome of this project is aimed at ensuring students graduating from high school are ready for postsecondary education as well as workforce success.

The strategic objective of Provide is to provide timely, student-focused information to parents, students, educators, policymakers and researchers through the SchoolView portal. The Provide strategic objective is accomplished through three main projects:

• SchoolView Extension Project
• Colorado Growth Model Updates
• EdFacts Updates

Perform objective seeks to use the RISE data to drive increased student performance through personalized instructional practices, innovative learning programs and dynamic professional development.

Dan wanted to highlight the Data Pipeline project under Capture. This project will revamp the Automated Date Exchange (ADE) to be more student and educator focused rather than program focused. They are targeting the 2013-14 school year go live with collections through the Date Pipeline. Currently there are several pilot districts that are assisting in testing the system. Anyone wishing to participate in a pilot program is encouraged to contact him.

Anyone wishing to access further information on the RISE project can access it on the CDE website at:

RISE website

Adam Williams gave an overview of where School Finance is in the Data Pipeline project. He reported that currently the program contractors have taken all of the Financial December ADE edits and moved them to the Date Pipeline platform. In April 2013 pilot districts will begin testing their financial data. The submission process will be very similar to the current submission process of a flat file. Adam reported that for the Data Pipeline the standard file length will be 48 bites. He has contacted individual software vendors and they have assured him that the programming for this will not be a problem. This change will be in effect for the FY2012-13 financial data submission. Adam also reported that the Transportation CDE-40 report submitted in August is the last paper report that will be gathered. Next August the form will be submitted electronically.

1. Fiscal Health Indicators

Leanne introduced Crystal Dorsey from the Office of the State Auditor (OSA). Crystal gave highlights from the Fiscal Health Analysis of Colorado School Districts that was presented to the Legislative Audit Committee in August. For background, there are 178 school district in Colorado that received $3.2 billion in funds as the state share of total program. The Charter School Institute (CSI) provides an alternative method for authorizing charter school and CSI currently monitors the fiscal management of 22 schools. For the purposes of this report, CSI is not included. The analysis provides information on financial indicators that can be used to evaluate the financial health of Colorado school districts. The OSA ensures that all local governments, including school districts, comply with the local government audit law. Statue gives OSA the ability to authorize the county treasurer to withhold property taxes if audits are not submitted. They also have the ability to cause an audit if one is not submitted. Using the audit reports submitted to the OSA and looking at a three year period to review, ratios can be tracked over time that offer information that can provide warning indicators of potential fiscal stress. The analysis focuses on areas of highest risk, which for a school district is the General Fund. She explained the factors used to define the five ratios used in the analysis which are: asset sufficient ratio; debt burden ratio; operating reserve ratio; operating margin ration; and change in fund balance ratio. This analysis evaluated warning trends over the three year period of FY2008-09, FY009-10 and FY2010-11. Of the 178 school districts, the analysis showed 13 districts with one warning indicator and six with two warning indicators. A warning indicator does not always mean there is a problem. Planned capital expenditures and deliberate spending of reserves will generate warning indicators, however, the more warning indicators, the greater the risk of a potential problem. The six school districts with two warning indicators were asked to provide an explanation. By identifying any potential problems early allows for conversations between school districts, BOE’s and CDE to ensure steps are initiated to correct any problems.

1. September Economic Forecast

Leanne Emm spoke to the economic forecast released in September by the Governor’s Office of State Planning and Budget (OSPB) and Legislative Council. The State is three years into a lackluster recovery. The United States and Colorado are losing steam and experiencing decelerating growth. This is frustrating because fundamentals are stronger, housing is up, banks are building balance sheets, consumer debt is less, but the economy is not moving. Uncertainty is still very high. There is some movement in Europe with fiscal policies however, there is still significant risk. There is also evidence that several of the large global economies are slowing. The US Congress needs to resolve several looming issues i.e. debt ceiling, fiscal cliff – sequestration, tax increases, etc. There most likely will not be any movement on any of this until after the election.

In Colorado there is stronger employment, but it is slowing and expected to lose momentum. Both of the forecasts do not predict a recession, however they note it as a risk. Assumptions in the forecasts are that unemployment is expected to rise but housing and construction is also expected to rise. This indicates that unemployment is hitting other sectors. Farming is slowing due to the drought and they are building into their forecasts that the Euro Zone will stay intact.

For the State budget, income and sales tax revenues, capital gains and the stock market are up. This has created a surplus larger than anticipated in June. This allows for an increase in the amount of transfer available to be transferred into the State Education Fund. With this additional distribution, inflation (projected currently at 2.2%) plus growth could likely be accommodated going into FY13-14. This means that if the State were able to fund inflation plus growth with an associated increase in local share, then it is expected that the statewide average per pupil funding would also increase for FY13-14. The Governor’s budget request will be released to the Joint Budget Committee of the State Legislature November 1st.

1. School Finance Technical Advisory

The Colorado School Finance Partnership (Partnership) held a series of meetings last year that brought together stakeholders to learn about various issues in school finance. They published a report and recommendations for school finance going forward. The School Finance Technical Advisory group was formed through the recommendation of the Partnership. The group is attempting draft legislation to craft a new school finance funding model. Leanne encouraged everyone to look at the report and pay attention to the discussion going on. The meetings are held weekly and are open to the public. The next meeting is Tuesday, Oct. 16th at the Colorado History Museum from 8:00 AM to 11:00 AM. The meetings are also posted online.

1. School Finance Rule Making Hearing

Leanne reviewed the proposed State Board rule changes necessary due to statutory changes enacted last legislative session. Due to the changing of student count not being held on major religious holidays, everywhere “October 1 pupil count” was referenced in rule must be changed to “pupil enrollment count date”. This affects School Finance, Transportation and Regional Services rules. The rule changes are posted on the PSFU website and if anyone has comments they can be submitted as detailed on the website.

1. Financial Policies and Procedures Handbook

Kirk Weber walked through the major changes to the Financial Policies and Procedures Handbook. The changes were effective for FY2011-12 so the title page will note that. After discussion, Steve Clawson made a motion to remove Appendix D – Guidelines for GASB 34. Terry Buswell 2nd the motion. Motion carried. Steve Clawson made a motion to approve the handbook. Diane Raine 2nd the motion. Motion carried.

1. Chart of Account Grant Set-aside Tracking

Before beginning the discussion Leanne asked for a very clear direction to the sub-committee as to the method of collection that should be used going forward for end of year set-aside reporting (EOY). She asked if districts want to continue to submit the EOY reports in the same manner or attempt to utilize the Data Pipeline. In order to use the Data Pipeline there needs to be some structure changes to the Chart of Accounts.

Wendi Chapin reported that PSFU has reviewed the Chart of Accounts and worked to clean it up and make changes effective for FY2013-14. There is still an issue with the grant set-aside. There was a question asked if the amount of funds for reporting are significant enough to make this an issue. There is $65M in grant set-aside at the federal level that must be tracked so it is significant to make it an issue. Discussion has been held over what method would best resolve the problem of reporting the set-aside. After further discussion it was determined to charge the sub-committee with proceeding to find a solution within the Chart of Accounts to allow for grant set-aside reporting through the Data Pipeline. The sub-committee is scheduled to meet on October 29th.

1. Other Topics of Interest
2. Grant Updates

David Schneiderman reported that the Department received a letter from the Feds trying to ease the burden of reporting time and effort. He is working on guidance that should be out by the end of the month. He also reported final allocations for Title I will be posted by mid-November.

1. Single Audit

Kirk Weber reported that for FY11-12 the ADE and Single Audit issues will be addressed in one letter. This will streamline the process at both the Department and district level.

1. Administrative Rescission

Leanne had received a request to consider withholding the annual Department administrative rescission amount out of state share payments in January opposed to the current practice of withholding it in the June payment. This will allow districts with charter schools to allocate the rescission easier. Leanne explained that reason for withholding the rescission in June is that if there is a $1.5M budget and we have not expended the entire amount, we will only do a rescission for the actual. She stated that generally the differential is very small and if the rescission is withheld in January it will be for the entire budgeted amount. Any left over at the end of the year will then roll over into the Public School Fund and could be available for appropriation in the following year. After discussion it was the consensus to move the rescission to January.

1. CASE/DBO & CASBO Updates
2. CASE/DBO

Shae Martinez, CASE/DBO president elect took the opportunity to let those in attendance know how beneficial the organization can be to those in business positions. Every year they hold two major conferences, the Winter Conference will be held Jan. 30th thru Feb. 2nd at the Westin in Westminster. There is always a preconference session specifically designed for business and finance leaders. Another benefit of membership is the timely legislative updates. CASE is very centered on legislation and has a lobbyist on staff. Anyone interested in becoming a member can contact Shae or email the secretary/treasurer Diane Doney.

1. CASBO

Shelley Becker reported that CASBO just held its fall conference in September and had 100+ attendees. CASBO is an organization that reaches out to other support areas in school districts i.e. transportation, nutrition services, business services, etc. The spring conference will be in April. CASBO is associated with ASBO and Ron McCauley from Douglas County is the current ASBO vice president and will be sworn in as president at the Boston conference.