EDLD5342+Week+4

The purpose of the financial accountability rating system of Texas or FIRST is to ensure that school districts are held accountable for the quality of their financial management practices. According to Chapter 109, Commissioner's Rules Concerning Financial Accountability, “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”. The system consists of five ratings ranging from Superior Achievement to Suspended- Data Quality. Overall, there are six “Critical” indicators on FIRST. However, in our opinion the three most important components are: Was there an unqualified opinion in the annual financial report, did the annual financial report not disclose any instances of material weaknesses in internal controls and finally, the examination of the general fund account. The first important component of FIRST that a Superintendent should be concerned with is whether or not there is an unqualified opinion in the annual financial report. While examining this area it tells a Superintendent if the district had any problem areas in the district’s financial statements. This would be a red flag that should be reviewed.The next critical area of FIRST is whether the annual financial report disclosed any instances of material weaknesses in internal controls? This lets the reader know if there are possible problems with the financial system that is in place at the district. If there are weaknesses in internal controls there may be problems in the future. The last final important component in our opinion is examining the general fund account. The total fund balance minus the reserved fund balance in the general fund must be greater than zero. This is extremely important because if the fund balance is zero then a district will have no cash to meet its liabilities or payroll obligations. The FIRST should be an important rating to a Superintendent. All districts should be managing their financial resources to provide the maximum allocation possible for direct instructional purposes and this rating system is used to help districts achieve improved performance in the management of their financial resources. Reflection: I am pleased to work for a district with excellent FIRST ratings and a healthy fund balance. In talking with my superintendent, it is apparent that he takes the fiscal health of the district to be of the utmost importance….now and in the future.
 * Week 4 Part 1 - FIRST **

**Part 2** While comparing the two district snapshots this week the concept of economy of scale becomes evident. Economy of scale is explained by thinking about bulk purchasing, as you buy more the cost per unit may go down. As a district becomes larger it can actually reduce infrastructure costs per student and in turn results in more instructional program revenue per student. It also allows for these efficiency savings to improve teacher salaries. Both districts had similar Total Revenue per pupil (a bit over $10,000) and Total Operational Expenditures per pupil. However, the average teacher salary in District 2 is much higher than District 1. One explanation to the differences in teacher salaries is economy of scale. Total Revenue per pupil in each district the totals are very similar. District 1 total revenue is slightly higher than District 2 at $10,529, while District 2 is at $10,316. Also, the Total Operational Expenditures per pupil are similar. District 2’s Total Operational Expenditures per pupil is only $297 more than District 1. Average teacher salary is much different in the two districts. District 2’s average teacher salary is $50,307 while District 1’s average salary is only $39,771. One explanation to the differences in the average teacher salary is economy of scale. District 2 is much more populous with over 32,000 students and 45 campuses. District 1, however, has less than 900 students over 3 campuses. Being a larger district gives District 1 an economy of scale advantage over the smaller district. Being a larger district allows cost of other expenditures to decreases making more funds available to provide a higher base salary and salary increases.

As stated in the lecture, differentiated staffing is a concept that proposes specialized use of personnel. It is similar to how the medical profession separates duties. Meeks (2011) noted that there was a rise in the interest of differentiated staffing in the 1960s to increase the cost-effectiveness of faculty dollars. The idea was a tiered-labor model ranging from educational aides to expert teachers. I have used this at both campuses I have led. I was able to hire aides to help with intervention time, save funds, and help teachers. The division of labor is accomplished with teacher’s aides, Teacher’s aides at my school help with instruction and in smaller ways with classroom management, logistics. Each grade level/subject area has intervention time and gets 5 people who come to their level/subject area for an hour each day, then rotate. The teaching team is the expert in the curriculum, coordinates lesson planning, and assigns teaching roles. Overall, the number of staff members required for a certain number of students would is less. In addition, the number of regular certified teachers would be less. However, the number aides increases. This results in a smaller budget for staff salaries and benefits. The division of labor improves job satisfaction of all staff members. They feel they are getting more done and we are seeing the results.
 * Part 3** ** Differentiated Staffing **


 * Part 4**

Mansfield ISD appears to be in good shape, in spite of the recent legislative session. The district’s total expenditures are listed at $226,376,155. Payroll for all personnel totals $194,826.314. This is broken down in the following ways: Instruction $124 million, Instructional Administration $2,095,021, School Administration $13,840,169. Other departments and salaries make up the remainder of the $194 million in expenditures. The average teacher salary in the district is $53,100. Providing an across the board pay raise of 5% in the district would result in an increase of $9,700,000 being added to the budget. In this current economic climate, an across the board raise of that magnitude would result in having to make choices to cut programs and positions. Currently our district is working on ways to deal with the loss of 13 million in revenue from the state this year and an additional 13 million next year. MISD was able to keep from laying off staff by moving people around in the district to fill openings and handle the cuts through attrition. In addition, we are moving to an 8 period day from intermediate school through high school. This allows the district to save teacher jobs and programs for kids. If we did not do this and kept the current 90 minute block schedule the district would have to pull ten million a year from the fund balance to cover the costs. Of course, pay raises are good for employees and provide a morale boost, as well as much needed support as the cost of living rises. However, a 5 percent raise would not be prudent at this time. This assignment gave me some perspective. Who wouldn’t like a raise? We all would, but looking at the enormous impact of a raise for staff helped me to see the big picture of how that action would effect the entire budget.

**Part 5** The Audit Financial Report is prepared to give the district and trustees an accurate picture of the financial condition of the district. The district has a schedule for rebidding specific types of professional services. Auditing services are not bid like products but are rather selected based on their qualifications. The district will issue a document called an RFQ (Request for Qualifications) for auditing services. The auditors will answer questions the district provides which include an estimate for external audit services. External auditors are not allowed to bid their fees.It can only be an estimate. These agreements typically span for more than one year or are obligated each year with an engagement letter. Our audit was conducted by Deloitte and Touche. In the report they describe the importance of the district’s integrity of procedures and that the audit is only as accurate as the district is honest. They conducted the audit “in accordance with auditing standards generally accepted in the United States of America”. The audit examined financial statements and found them to be free of material misstatement. They examined the internal and external controls over reporting. It also examined evidence supporting the amounts and disclosures in financial statements, examining all major funds, sources of funding, and expenditures. The audit report contains all the financial statements, a summary of the district’s assets and liabilities, a description of the district. I was able to read a bit about the recent years In Mansfield ISD and the increasing tax base associated with its growth. The audit opinion letters showed the district to be compliant with the law and regulations and in good shape financially, with a fund balance of 87 million dollars at the time of the report. Results are communicated to the board of trustees and district in the audit report and two audit opinion letters. I enjoyed working with Ms. Bowman on this assignment. She is a CFO in our district and was able to spend time discussing this with me. I found the report she gave me to be daunting and a little difficult to understand, but I did at least understand the gist of the report, that the district is compliant with the law and has appropriate procedures in place as well as healthy growth and a healthy fund balance.