This chapter addresses the financial management functions of Dallas Independent School District (DISD) in the following sections:
- A. Budget Development and Monitoring
- B. Accounting Operations
- C. Internal/External Auditing
- D. Tax Collections
- E. Public Education Information Management System (PEIMS) Reporting
A. BUDGET DEVELOPMENT AND MONITORING
A budget shows anticipated revenues and expenditures for a given period, usually a year. An effective budget links spending plans to strategic goals, priorities, and initiatives established by the governing body. The development of a school district budget is a collaborative effort requiring the participation and cooperation of various individuals across the organizational spectrum. The budget should reflect the financial stewardship of the administration, the board of trustees and the local community.
DISD's Budget Development and Control Department is responsible for compiling the district's budget. The Budget Department is headed by an executive director and has 22 positions, of which two are vacant at this writing. Exhibit 7-7 presents the Budget Department's organization.
Exhibit 7-7Source: DISD Financial Operations Division.
Budget Development and Control Department Organization
Exhibit 7-8 presents the primary responsibilities of various budget personnel.
Exhibit 7-8Source: DVID Job Descriptions and Interviews with Budget Department Personnel.
DISD Budget Department Personnel
Position Number Primary Responsibility Management Executive Director 1 Oversees operation of the entire budget department, which compiles the budget based upon board-approved long, intermediate, and short-term financial goals. Also oversees the department's role in monitoring actual performance against budget through data analysis, data management and facilitation of budget transfers and amendments. Campuses Coordinator 1 Team leader for five specialists IV. Oversees the planning, development, approval, and monitoring of campus, magnet school, and special school budgets. Budget/Central/Data Management Director 1 Team leader for four specialists IV and the data management coordinator. Oversees the planning, development, approval, and monitoring of central department budgets. Assume the duties of the executive director in the executive director's absence. Support Services Specialist 1 Oversees the work of four project liaisons responsible for supporting and coordinating the work of the Budget Department. Organizes and distributes mailouts, coordinates input of budget information into the system, and maintains departmental files, documents, and manuals. Produces computer-generated management reports and assists in the preparation of budget reports and board documents. Specialists IV 12 Report to the campuses coordinator, budget/central/data management director, or the extra district funds coordinator as assigned. Act as primary points of contact for assigned campus, central, or special revenue budget administrators as applicable. Assist budget administrators with budget planning, development, analysis, preparation, presentation, and monitoring. Assist with budget amendments and transfers. Conduct training sessions for budget administrators. Verify supplemental pay line codes. Work assigned based upon the district's area concept. Data Management Coordinator 1 Reports to the budget/central/data management director. Verifies funds for board actions and ensures that funds have been encumbered properly. Monitors and administers financial activities of the district's Edison contract. Responds to open records requests. Responds to board members' requests for budget information. Assists with strategic planning for the Budget Department and works on special projects as assigned. Primary budget contact for 29 central organizations plus the seven Edison schools. Verifies supplemental pay line codes. Project Liaisons 4 Reports to the support services specialist. Responsible for supporting and coordinating the work of the Budget Department. Organizes and distributes mail-outs, coordinates the input of budget information into the system, and maintains departmental files, documents, and manuals. Produces computer-generated management reports, and assists in the preparation of budget reports and board documents. Verifies funds for supplemental pay forms.
Budget development involves both campus and central department budgets. The process for both types of budgets consists of the following five phases:
- Formulation and submission
- Review and coordination
- Monitoring and evaluation
Central departments prepare level budgets, which are based on the previous year's amount less
one-time allocations plus new programs and other enhancements. Central department budget administrators complete a series of worksheets that are reviewed and approved by the Budget Department, superintendent, and board before departmental allocations become part of the districtwide budget. Campus budget development continues year-round and is more involved than central department budgeting.
Planning for campus budgets begins each September, when the Budget Department issues the Districtwide Needs Assessment Survey. This survey is intended to gather information about campus concerns, needs and priorities. It gives campuses an opportunity to identify and prioritize needs in the following areas:
- Administrative professional personnel
- Instructional professional personnel
- Administrative support personnel
- Instructional support personnel
- Contracted services
- Supplies and materials
- Equipment costing more than $1,000
- Safety and security
The Budget Department compiles and analyzes the data from the survey and uses it to allocate resources during the budget process. The Budget Department administered and compiled the 2001-02 survey in September/October 2000. Results of the survey showed that campuses placed a high priority on allocating resources for professional instructional and support personnel and equipment needs. The most frequently mentioned needs were additional classroom teachers, more funding for workbooks and computer software, updated technology and better playground equipment. These needs are being considered during the 2001-02 budget cycle, which began in September 2000.
After the Budget Department compiles and analyzes the Districtwide Needs Assessment Surveys, the budget development calendar is prepared and campus budget administrators, area superintendents, and central division managers suggest changes in budget allocation formulas.
The Budget Department uses allocation formulas to allocate personnel and non-personnel resources to campuses based on campus census data. For example, schools with student enrollment of 676 to 950 receive one assistant principal; schools with enrollment of 951 to 1,500 students receive two. Non-personnel allocations work in similar fashion. High schools receive $14 per student for general supplies, $3 per student for furniture that costs less than $500, and $200 per visual arts teacher for fine arts supplies.
Budget allocation formulas originate from a variety of sources. The Southern Association of Colleges and Schools (SACS) is an accreditation agency that prescribes many of the district's personnel allocation formulas. The Texas Education Code, Texas Administrative Code, district policy, federal and state mandates and DISD's court desegregation order are other sources of personnel allocation formulas. Non-personnel allocation formulas have evolved through recommendations from central and campus administrators based upon the actual costs of operating the schools. For example, copier allocations remain the same until old leases expire and new leases with different costs are signed.
The board assesses the budgetary impact of funding needs identified in the Districtwide Needs Assessment Surveys as well as the financial impact of recommended changes to allocation formulas. The Budget Department collects, compiles and presents recommended allocation formula changes to the board for review and approval. The Budget Department applies the approved formula changes to enrollment figures and other census data to determine campus budgets.
The Evaluation, Accountability and Information Department forecasts enrollment for regular and special student populations. The department surveys campuses using the previous five-year enrollment trends factoring in demographics such as student mobility and housing construction/demolition. Projected enrollment figures are adjusted in September based on actual enrollment during what is called the "campus leveling process" (discussed later in this section.)
Budget preparation manuals provide detailed instructions to both campus and central department employees responsible for budget preparation. In addition, campuses and central departments receive budget preparation packets that contain the materials and forms needed to prepare their budgets.
Campus budgets are developed by the individual schools according to the district's site-based model, School-Centered Education (SCE). This model emphasizes and encourages stakeholder involvement in budget development. Each campus has a School Community Council (SCC) that is involved in education planning and decision-making. The SCC's efforts are documented in meeting minutes that must be attached to the SCE Budget Advisory Checklist when the budget is submitted for review and approval.
After adoption of the district budget, DISD's Budget Department publishes the Principal's Blue Pages, a manual containing TEA's Academic Policies and Administrative Regulations; position control procedures; a job code table; desegregation guidelines; an accounting code list; and other information designed to assist principals in administering their schools' budgets. Each September, the district conducts a "campus leveling" process, through which enrollment projections are fine-tuned based on actual student enrollment. During campus leveling, schools that overestimated their enrollments lose positions to schools that underestimated their enrollment, so that the allocation of staff resources is "level" across the district. Campus leveling represents the end of one budget cycle and the beginning of another; it appears last on the district's budget calendar (Exhibit 7-9).
Exhibit 7-9Source: DISD Budget Calendar.
DISD Budget Development Process
Time Line Activity/Process September
- Submit budget development calendar for input.
- Distribute Districtwide Needs Assessment Survey forms.
- Distribute budget calendar.
- Discuss and obtain campus administrator, district superintendent, and central division manager budget input and allocation formula suggestions.
- Distribute student attendance zone consideration forms.
- Collect and analyze Districtwide Needs Assessment Survey forms.
- Discuss and obtain budget input from board member district constituents.
- Districtwide Needs Assessment Surveys due from campuses.
- Collect student attendance zone consideration forms.
- Review allocation formulas.
- Review student attendance zone consideration forms.
- Review enrollment projections.
- Review Districtwide Needs Assessment Survey results.
- Conduct board of education workshops to perform mid-year program review.
- Distribute budget preparation documents to campuses and central offices.
- Conduct budget workshops for central budget managers.
- Conduct budget workshops for campuses and community groups.
- Review compensation and benefits study.
- Central office budgets due in Budget Development and Control Department.
- Traditional and year-round campus budgets due in Budget Development and Control Department.
- Budget Development and Control Department and superintendent's council review and analyze budget input.
- Review proposed budgets with central division managers.
- Submit proposed budget to board for review.
- Hold public budget hearings.
- Review proposed budget for community input and board directives.
- Review and finalize proposed budget.
- Adopt budget.
- Conduct campus leveling based on actual enrollment.
- Distribute principal's Blue Pages.
DISD prepared its 2000-01 budget using Association of School Business Officials (ASBO) and Government Finance Officers Association (GFOA) guidelines and plans to seek GFOA and ASBO certification. ASBO and GFOA are two national organizations that promote excellence in the form, content and presentation of budget documents through budget award programs. The primary difference between the ASBO and the GFOA programs is that ASBO's program is specifically designed for school districts, while GFOA's program is designed for any governmental entity. These programs establish a number of criteria for exemplary budget documents and provide certification awards to governmental entities whose budget documents meet the criteria. Many school districts across the country use the criteria to apply for the award, but some use it merely to improve their budget document's content, format and presentation.
DISD prepared its fiscal 2001 budget document according to Association of School Business Officials and Government Finance Officers Association standards and is seeking to have it certified by these organizations.
DISD's budget compilation process is neither fully automated nor integrated. Many paper forms are used during budget development and budget information is compiled using a database application for budget development, a spreadsheet program for budget analysis and tracking and a mainframe system for general ledger applications. The budget development software is a stand-alone application incapable of online input from remote locations, such as campuses. Data distribution and collection also are not automated. As a result, campus and central office budget specialists must spend considerable time entering budget data into the budget development system or consolidating and reformatting information for upload into the system. This is an inefficient process considering that automated, integrated budget development solutions are available with today's technology. These solutions eliminate the need for many of the paper forms used to collect, compile and consolidate budget data.
DISD schools use a variety of forms to provide information about each campus and to realign budget resources. After reviewing their detailed budgets, principals may realign personnel and non-personnel resources to meet their school's needs as identified in their Campus Improvement Plan. The forms schools use to collect budget information and realign resources are summarized in Exhibit 7-10.
Exhibit 7-10Source: DISD School Budget Preparation Manual.
Campus Budget Preparation Forms
Type Name Description Form A Organization Overview Provides the mission, goals, and objectives of the school. Form B External Support Systems Identifies all monetary contributions from non-DISD sources. Form C Needs Assessment Budget Acknowledgment Input Form Identifies budget provisions that have been influenced by the Needs Assessment Survey conducted at the beginning of the prior year's budget process. Form D Employee Release Form Used to transfer employees from one school/organization to another. Form D-1 Position/Employee Reconciliation Form Reconciles positions budgeted with current employees. Form E Budget Allocation Trade Off Form Used to realign funds among budget line codes. For example, to move funds from supplies to personnel. Net fiscal impact must equal zero. Form F Request for Contract Validation and Consultant Funds Used to identify contract services anticipated for the year. Includes consultant services, leases, repairs and maintenance, and other professional services. Form G School Budget Planning Form Provides a series of questions designed to ensure that the school receives all allocations necessary to support the school's instructional programs. Form H School-Community Council Budget Advisory Checklist Used by School Community Council representative to document participation in the site-based planning process. SCC representatives list the topics in which they participated in an advisory capacity. Form I Budget Development Checklist Transmittal for all budget forms.
Central district departments prepare "level" budgets, meaning that they must begin with the previous year's budget and justify any increases. Department budgets are prepared using a variety of electronic spreadsheets that, after review by budget specialists, must be consolidated for uploading into the district's budget development program. In February 2001, the district redesigned these forms so that they could be uploaded into the budget system more easily. Exhibit 7-11 summarizes budget forms used to prepare central department budgets.
Exhibit 7-11Source: DISD Central Budget Preparation Manual.
Central Office Budget Preparation Forms
Type Name Description Form A Organizational Overview A general description of organizational programs, services and objectives and performance measures. Form A-1 Evaluation of Performance Measures Summarizes performance measures for previous fiscal year with an evaluation of performance for the first six months of the current fiscal year. A follow-up form is prepared at the end of the year to measure performance for the last six months of the current fiscal year. Form B Current Authorized Personnel Summarizes employees in the organization showing job code, salary and budget line code to which each salary is charged. Form BL Level Personnel Adjustments Used to make adjustments and corrections to level budget personnel figures (based on prior-year budget) for full-time, part-time, temporary positions and supplemental pay categories. Form B-1 Personnel Modifications Used to request personnel modifications for the current year budget. Form B-a Rationale for Request for Supplemental Pay Funds Used to justify supplemental funds requested for overtime, stipends and extra duty pay. Form C Non-Personnel Costs Identifies changes to the organization's level (prior-year) budget as well as requested modifications for the current year. Form G Summary of Requested Modifications Summarizes modifications made on forms B-1, C, and BL. Form H Personnel Allocation and Fixed Costs Lists prior budget year approved, prior budget year filled and current budget year requested positions by classification. Also lists fixed costs such as existing contracts, utilities, transportation, etc. Form I Grand Total Budget Summary Summarizes various totals from forms B, BL, C and B-1. Form J Department Overview Summarizes activities of the department. Shows mission statement, department goals and organizations within the department with brief description of services provided. Form M-10 Budget Reduction
Shows 10 percent reduction of budget items that will have the least impact on departmental operations. Form M-20 Budget Reduction
Shows 20 percent reduction of budget items that will have the least impact on departmental operations. Form N Central Office Budget Forms Checklist Transmittal form summarizing all budget forms in the completed budget packet.
Budget specialists say that preparing and consolidating these forms leaves little time for budget analysis or customer service. Their work is further hampered by separate systems that do not work together seamlessly. Budget administrators and budget specialists spend significant time managing a variety of forms and inputting data when they should be focusing on core competencies and customer service.
Work with the Technology Services Division to implement the automated, integrated budget development application.
The Budget Department should work with the Technology Services Division to implement the budget development module to work with the district's existing financial system more seamlessly than the existing budget development module. All of the information currently collected and compiled using various forms should be evaluated and incorporated into the design of an integrated budget development application. Information, now collected using paper forms, should be entered using computer screens in the integrated budget development package. Manual compilation of the budget will be significantly reduced once the district has this capability. Budget administrators would enter budget information on appropriate computer screens corresponding to the current budget form and the system would edit, summarize and compile the data automatically. Budget specialists would be able to review budgets online or via printout, but would not need to manually enter information into the budget development software.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The Budget director and the chief technology officer (CTO) review the Budget Department's technology needs. August 2001 2. The Budget director and CTO determine the need for a budget development module that will automate the district's budget compilation process and that will have distributed processing capability. August 2001 3. The Budget director and CTO determine if modifications can be made to the proposed system to ensure that it meets the needs of the district and the Budget Department. August 2001 4. The Budget director and CTO devise a strategy to ensure that the interests and requirements of the Budget Department are addressed as the district addresses its technology needs and develops solutions to its technology problems. August 2001 and Ongoing
This recommendation can be implemented with existing resources.
The budget document DISD prepared and submitted for ASBO and GFOA certification is not the same budget document that was made available to the public. The public document is a three-volume set of 1,366 pages consisting of an executive summary, a program budget and a general-purpose budget (Exhibit 7-12).
Exhibit 7-12Source: DISD 2000-01 Budget Document.
Overview of DISD's Published 2000-01 Budget Document
Volume Description Pages Executive Summary Summarizes changes since the previous year and current-year budget information by school. 40 Volume 1 Includes program descriptions for all central office and campus budgets. Summarizes information using four forms for each department.
- Form J: Department overview and mission statement.
- Form K: Budget modifications for the current budget year.
- Form A: Programs, objectives, and performance measures for each central office and mission, goals, and objectives of each campus.
- Form H: Approved positions and budget totals by object code.
707 Volume II Provides department and campus budgets by function and object code as well as positions. 619
These volumes contain useful information and enough detailed information to perform meaningful analyses. However, they are cumbersome and are not user-friendly. The volumes have little narrative description and no graphic presentations. The executive summary was placed on the district's Web site but the other two volumes, due to their size, were not placed on the Web site.
The document the district submitted for GFOA and ASBO certification also is full of useful information, but it is a single volume of 621 pages, including explanatory narrative as well as charts and summary tables. This document was produced along with the traditional document, since this was the first year the district applied for certification.
Make the budget document submitted for Association of School Business Officials and Government Finance Officers Association certification available to the public in both printed form and on the district's Web site.
Even if the budget document submitted to ASBO and GFOA is not certified by one or both organizations, it still should become the standard document provided to the public, since it is much more user-friendly and informative than the current three-volume set. Moreover, the district should make the document available on the district's Web site as well as the district's Intranet. Finally, the district should continue to improve its budget document as a communications device, information resource and financial guide.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The Budget director instructs the department's budget specialists to produce future budgets using the ASBO and GFOA format. August 2001 2. The budget specialists determine how many budget booklets should be produced, based on historical usage. August 2001 3. The budget specialists instruct the support service specialists to assemble the required number of budget documents. August 2001 4. The Budget director makes the newly formatted budget document available to the public. August 2001 and Ongoing 5. The Budget director coordinates with the Technology Services Division to put the budget document on the World Wide Web and the district's Intranet. September 2001
This recommendation can be implemented with existing resources.
DISD has not linked its strategic goals to its budget priorities in an effective manner. While the district clearly communicates its strategic goals in its budget materials, it has not tied specific dollars to these goals. Effective budgets establish strong, visible links between strategic goals and the resources committed to meet them. These links help stakeholders understand how much money the district has committed to achieving each of its strategic goals.
DISD's five-year strategic plan, called Vision 2003, establishes board-approved goals in seven broad areas as follows:
- School Completion
- Student Well-Being
- Parent/Community Participation
- Organization/Management System Reform
Within each of these areas, the plan establishes specific goals in the form of declarative statements. To illustrate, Exhibit 7-13 presents the specific goals for student well-being.
Exhibit 7-13Source: DISD District Strategic Plan Vision 2003.
Strategic Plan Goals-Student Well-being
- By the year 2003, positive student character traits will be demonstrated by a 50 percent reduction in truancy filings, a 25 percent reduction in disciplinary infractions and in the following four categories of behaviors as measured by the National Youth Risk Behavior Survey: substance use, violent behavior, sexual activity and behaviors that affect personal health and safety.
- By the year 2003, a 90-percent reduction in student-on-student and student-on-school personnel assaults will be evidenced.
- By the year 2003, all students will participate in student activities including clubs, organizations, athletics, or other extracurricular activities.
- By the year 2003, all secondary students will be required to participate in 50 hours of community service as part of their graduation plan.
- By the year 2003, all students will be taught a life skills curriculum that emphasizes character and life skills development.
Each strategic area is supported in this fashion by specific goals. However, the district has not linked these goals with the budget.
Link the budget to specific goals and objectives identified in DISD's strategic plan.
For example, a 90-percent reduction in student-on-student and student-on-school personal assaults might be linked to more investments in security cameras. Exhibit 7-14 uses three student well-being goals to illustrate how budget priorities and strategic plans might be linked in the budget document. Amounts and percentages are for illustrative purposes only.
Exhibit 7-14Source: DISD Strategic Plan Vision 2003 and TSPR.
Example of Student Well-Being Goals Linked to Budget
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The chief financial officer instructs the Budget executive director to develop a method for linking the budget to the district's strategic plan. August 2001 2. The chief financial officer reviews and approves the method. August 2001 3. The Budget executive director instructs the campuses and central budget coordinators to communicate the method to district budget administrators. September 2001 4. The Budget executive director instructs the campuses and central budget coordinators to implement the method during budget preparation. September 2001
This recommendation can be implemented with existing resources.