TSPR Mount Pleasant ISD

This chapter reviews all financial operations of the Mt. Pleasant Independent School District (MPISD) in the following areas:

A. Organization and Staffing

B. Financial Reporting

C. Financial Management Practices

D. Budgeting

E. Business Technology

F. Public Facility Corporation

G. Internal Controls

BACKGROUND
Successful financial management operations ensure that a school district receives all available revenue from the state and federal governments; maintain a track record of sound financial decisions and adequate and equitable budget allocations; issue timely, accurate, and informative reports on the district's financial position; maintain adequate internal controls; employ a skilled, well-trained staff; and maintain a consistent record of accurate accounting procedures and reports.
CURRENT SITUATION
Almost two-thirds of MPISD property value is designated as business use compared to 45.9 percent on average for other districts in Regional Education Service Center (RESC) VIII and 40.8 percent on average for the state. MPISD has much less residential property value than the state, peer district, and regional averages (Exhibit 6-1).
Exhibit 6-1
MPISD, RESC VIII, State and Peer District Property Values
by Category as a Percentage of Total Property Value
1997-98

District/
Grouping Business Residential Land Oil and Gas Other

Mt. Pleasant 62.6% 26.6% 9.5% 1.1% 0.3%

Texarkana 54.1% 40.9% 4.7% 0.0% 0.4%

Corsicana 51.6% 39.2% 8.8% 0.1% 0.3%

Greenville 50.3% 40.6% 8.8% 0.0% 0.4%

Kilgore 46.3% 36.7% 9.9% 6.6% 0.5%

RESC VIII 45.9% 33.9% 17.4% 2.2% 0.7%

Paris 44.1% 53.2% 2.7% 0.0% 0.0%

Terrell 42.8% 37.0% 18.5% 0.1% 1.7%

State 40.8% 46.7% 7.4% 4.6% 0.5%

Liberty-Eylau 39.9% 41.1% 14.0% 2.7% 2.3%

Athens 39.5% 40.6% 18.3% 0.8% 0.8%

Kaufman 21.6% 40.4% 33.8% 0.0% 4.1%
Source: Texas Education Agency, AEIS 1997-98.
In 1997-98, Texas school districts received an average of 47 percent of their funds from local property taxes and 45.2 percent from the state. In MPISD, 50.2 percent of revenues come from local property taxes and 42.6 percent from the state. The averages for the region are 37.7 and 54.4 percent, respectively (Exhibit 6-2). Other local and intermediate sources of funding include interest earnings, rental of facilities and all local sources of funding other than property taxes.
Exhibit 6-2
MPISD, RESC VIII, State, and Peer District
Sources of Budgeted Revenue as a Percentage of Total Budgeted Revenue
1997-98

District/ Grouping Local
Property
Tax Other
Local And
Intermediate State Federal

Texarkana 54.2% 3.9% 36.2% 5.6%

Mt. Pleasant 50.2% 3.8% 42.6% 3.4%

State 47.0% 4.4% 45.2% 3.3%

Greenville 43.5% 5.4% 47.1% 4.0%

Athens 42.3% 4.3% 50.5% 2.9%

Corsicana 39.1% 4.2% 52.7% 4.0%

Kilgore 38.0% 15.5% 43.7% 2.8%

RESC VIII 37.7% 4.6% 54.4% 3.4%

Terrell 34.6% 3.3% 57.7% 4.3%

Paris 33.4% 4.2% 57.7% 4.7%

Kaufman 28.4% 4.2% 64.5% 2.9%

Liberty-Eylau 26.2% 3.2% 65.6% 5.1%
Source: Texas Education Agency, AEIS 1997-98.
Over the past three years, local revenue as a source of funds for MPISD has fluctuated between 50.1 and 54.6 percent of total revenues. At the same time, state revenue has increased from 40.2 to 42.6 percent of total revenues (Exhibit 6-3).
Exhibit 6-3
MPISD Sources of Revenue as a Percentage of Total Revenue
1995-96 - 1997-98

Source of Revenue 1995-96
Actual 1996-97
Actual 1997-98
Budget

Local property tax 50.1% 54.6% 50.2%

Other local and intermediate 5.8% 3.9% 3.8%

State 40.2% 38.3% 42.6%

Federal 3.9% 3.2% 3.4%

Total 100.0% 100.0% 100.0%
Source: Texas Education Agency, AEIS 1995-96 through 1997-98.
Compared to peer districts, MPISD has the second highest tax rate and the second highest value per student (Exhibit 6-4).
Exhibit 6-4
MPISD Tax Rate and Value per Student Compared to Peer Districts
1997-98

District Tax Rate Value
per Student

Paris $1.514 $115,780

Mt. Pleasant $1.492 $168,313

Kilgore $1.485 $152,544

Greenville $1.470 $155,502

Athens $1.470 $148,059

Corsicana $1.469 $131,742

Kaufman $1.463 $93,191

Texarkana $1.449 $192,944

Terrell $1.410 $137,855

Liberty Eylau $1.323 $97,623
Source: Texas Education Agency, AEIS 1997-98.
On the expenditure side, Exhibit 6-5 shows how MPISD budgeted funds were distributed in 1997-98 compared to the region and the state averages. MPISD is similar to regional and state averages in most categories. However, MPISD's debt service costs are 8.8 percent of their total expenditures, which is higher than the state and regional averages. During the review of the financial statements for MPISD, the review team noted that the district is paying for its facilities through a Public Facility Corporation, which in essence is a loan. Most school districts in Texas finance facilities through the issuance of bonds.
Exhibit 6-5
MPISD, RESC VIII, and State Expenditures by Function
as a Percentage of Total Expenditures
1997-98

Function Mt. Pleasant Percent RESC VIII Percent State Percent

Instruction $11,833,212 52.6% $160,061,147 53.9% $11,245,811,208 51.8%

Instructional related services 536,034 2.4% $6,272,320 2.1% $562,761,247 2.6%

Instructional leadership 93,070 0.4% $2,120,054 0.7% $265,584,022 1.2%

School leadership 1,134,479 5.0% $14,943,595 5.0% $1,137,476,933 5.2%

Support services - student 497,028 2.2% $8,867,082 3.0% $849,752,434 3.9%

Student transportation 458,300 2.0% $6,351,985 2.1% $550,716,637 2.5%

Food services 1,020,700 4.5% $15,691,324 5.3% $1,088,906,943 5.0%

Co-curricular/extracurricular activities 727,220 3.2% $10,017,254 3.4% $490,126,870 2.3%

Central administration 744,800 3.3% $13,178,140 4.4% $801,049,679 3.7%

Plant maintenance and operations 1,924,900 8.6% $27,706,003 9.3% $2,183,072,112 10.1%

Security and monitoring services 49,600 0.2% $293,162 0.1% $103,877,919 0.5%

Data processing services 216,496 1.0% $2,348,724 0.8% $186,149,016 0.9%

Total operating expenditures $19,235,839 85.5% $267,850,790 90.2% $19,465,285,020 89.6%

Debt service 1,987,179 8.8% $15,829,745 5.3% $1,531,985,683 7.1%

Capital outlay 1,282,806 5.7% $13,385,538 4.5% $724,564,393 3.3%

Total non-operating expenditures $3,269,985 14.5% $29,215,283 9.8% $2,256,550,076 10.4%
Source: Texas Education Agency, AEIS 1997-98
On a per student basis over the past three years, expenditures have decreased more than five percent (Exhibit 6-6). Instruction and instructional leadership spending has decreased 7.19 percent or $208 per student. Non-operating expenditures, capital outlay and debt service, have decreased over 23 percent, or $267 per student, during this same period.
Exhibit 6-6
MPISD Expenditures Per Student
1995-96 - 1997-98

Expenditure Category 1995-96 Actual 1996-97 Actual 1997-98 Budget Percentage of Change over the Period

Instruction and instructional leadership $2,892 $2,492 $2,684 -7.19%

School leadership $208 $209 $255 22.60%

Central administration $246 $161 $168 -31.71%

Other operating $1,027 $1,077 $1,222 18.99%

Total operations $4,373 $3,939 $4,329 -1.01%

Total non-operations $959 $873 $736 -23.27%

Total per student $5,332 $4,812 $5,065 -5.01%
Source: Texas Education Agency, AEIS 1995-96 through 1997-98.

District/ Grouping	Business	Residential	Land	Oil and Gas	Other
Mt. Pleasant	62.6%	26.6%	9.5%	1.1%	0.3%
Texarkana	54.1%	40.9%	4.7%	0.0%	0.4%
Corsicana	51.6%	39.2%	8.8%	0.1%	0.3%
Greenville	50.3%	40.6%	8.8%	0.0%	0.4%
Kilgore	46.3%	36.7%	9.9%	6.6%	0.5%
RESC VIII	45.9%	33.9%	17.4%	2.2%	0.7%
Paris	44.1%	53.2%	2.7%	0.0%	0.0%
Terrell	42.8%	37.0%	18.5%	0.1%	1.7%
State	40.8%	46.7%	7.4%	4.6%	0.5%
Liberty-Eylau	39.9%	41.1%	14.0%	2.7%	2.3%
Athens	39.5%	40.6%	18.3%	0.8%	0.8%
Kaufman	21.6%	40.4%	33.8%	0.0%	4.1%

District/ Grouping	Local Property Tax	Other Local And Intermediate	State	Federal
Texarkana	54.2%	3.9%	36.2%	5.6%
Mt. Pleasant	50.2%	3.8%	42.6%	3.4%
State	47.0%	4.4%	45.2%	3.3%
Greenville	43.5%	5.4%	47.1%	4.0%
Athens	42.3%	4.3%	50.5%	2.9%
Corsicana	39.1%	4.2%	52.7%	4.0%
Kilgore	38.0%	15.5%	43.7%	2.8%
RESC VIII	37.7%	4.6%	54.4%	3.4%
Terrell	34.6%	3.3%	57.7%	4.3%
Paris	33.4%	4.2%	57.7%	4.7%
Kaufman	28.4%	4.2%	64.5%	2.9%
Liberty-Eylau	26.2%	3.2%	65.6%	5.1%

Source of Revenue	1995-96 Actual	1996-97 Actual	1997-98 Budget
Local property tax	50.1%	54.6%	50.2%
Other local and intermediate	5.8%	3.9%	3.8%
State	40.2%	38.3%	42.6%
Federal	3.9%	3.2%	3.4%
Total	100.0%	100.0%	100.0%

District	Tax Rate	Value per Student
Paris	$1.514	$115,780
Mt. Pleasant	$1.492	$168,313
Kilgore	$1.485	$152,544
Greenville	$1.470	$155,502
Athens	$1.470	$148,059
Corsicana	$1.469	$131,742
Kaufman	$1.463	$93,191
Texarkana	$1.449	$192,944
Terrell	$1.410	$137,855
Liberty Eylau	$1.323	$97,623

Function	Mt. Pleasant	Percent	RESC VIII	Percent	State	Percent
Instruction	$11,833,212	52.6%	$160,061,147	53.9%	$11,245,811,208	51.8%
Instructional related services	536,034	2.4%	$6,272,320	2.1%	$562,761,247	2.6%
Instructional leadership	93,070	0.4%	$2,120,054	0.7%	$265,584,022	1.2%
School leadership	1,134,479	5.0%	$14,943,595	5.0%	$1,137,476,933	5.2%
Support services - student	497,028	2.2%	$8,867,082	3.0%	$849,752,434	3.9%
Student transportation	458,300	2.0%	$6,351,985	2.1%	$550,716,637	2.5%
Food services	1,020,700	4.5%	$15,691,324	5.3%	$1,088,906,943	5.0%
Co-curricular/extracurricular activities	727,220	3.2%	$10,017,254	3.4%	$490,126,870	2.3%
Central administration	744,800	3.3%	$13,178,140	4.4%	$801,049,679	3.7%
Plant maintenance and operations	1,924,900	8.6%	$27,706,003	9.3%	$2,183,072,112	10.1%
Security and monitoring services	49,600	0.2%	$293,162	0.1%	$103,877,919	0.5%
Data processing services	216,496	1.0%	$2,348,724	0.8%	$186,149,016	0.9%
Total operating expenditures	$19,235,839	85.5%	$267,850,790	90.2%	$19,465,285,020	89.6%
Debt service	1,987,179	8.8%	$15,829,745	5.3%	$1,531,985,683	7.1%
Capital outlay	1,282,806	5.7%	$13,385,538	4.5%	$724,564,393	3.3%
Total non-operating expenditures	$3,269,985	14.5%	$29,215,283	9.8%	$2,256,550,076	10.4%

Expenditure Category	1995-96 Actual	1996-97 Actual	1997-98 Budget	Percentage of Change over the Period
Instruction and instructional leadership	$2,892	$2,492	$2,684	-7.19%
School leadership	$208	$209	$255	22.60%
Central administration	$246	$161	$168	-31.71%
Other operating	$1,027	$1,077	$1,222	18.99%
Total operations	$4,373	$3,939	$4,329	-1.01%
Total non-operations	$959	$873	$736	-23.27%
Total per student	$5,332	$4,812	$5,065	-5.01%