budget procedures manual - midlandisd.net · 2019. 8. 20. · budget manual purpose and basis for...

Mission: All students will graduate prepared and ready for college or career.

MIDLAND ISD 2019 - 2020

BUDGET PROCEDURES MANUAL

615 W. Missouri Ave Midland, TX 79701 www.midlandisd.net

Mission: All students will graduate prepared and ready for college or career.

MIDLAND ISD

BUDGET PROCEDURES MANUAL

BOARD OF TRUSTEES

Rick Davis, President Tommy Bishop, Vice President

Bryan Murry, Secretary James Fuller, Trustee

Robert Marquez, Trustee John Kennedy, Trustee

John Trischitti III, Trustee

ADMINISTRATION

Orlando P. Riddick, Superintendent

Patrick Jones, Chief Academic Officer James Riggen, Chief Operating Officer

Darla Moss, Chief Financial Officer Dr. Elise Kail, Chief Transformation Officer

Woodrow Bailey, Executive Director of Human Resources Elana Ladd, Chief Communications Officer

PREPARED BY

Darla Moss, Chief Financial Officer Carla Martin, Executive Director of Financial Services

Tony Kingman, Director of Budget Heather Gattinger, Budget Specialist

Mission: All students will graduate prepared and ready for college or career. P a g e | 1

TABLE OF CONTENTS

EXECUTIVE SUMMARY ............................................................................................................. 2 Mission Statement ................................................................................................................................. 2

School Board's Student Outcome Goals ......................................................................................... 2

Budget Manual Purpose and Basis for Presentation ................................................................... 2

Financial Services Office Administrators ........................................................................................ 2

Budget Manual Sections ...................................................................................................................... 3

INTRODUCTORY SECTION ...................................................................................................... 4 Budget Definition ................................................................................................................................... 4

Midland ISD Funding ............................................................................................................................. 4

Legal Requirements .............................................................................................................................. 4

INFORMATIONAL SECTION ..................................................................................................... 6 Roles and Responsibilities in the Budgeting Process ................................................................. 6

Accounting Code Structure ................................................................................................................. 7

Basic System Code Composition ...................................................................................................... 9

BUDGET PROCESS .................................................................................................................. 15 FY2019-2020 Budget Calendar ......................................................................................................... 15

Budget Process Overview ................................................................................................................. 16

Budgeting Objectives ......................................................................................................................... 16

Budget Process .................................................................................................................................... 17


EXECUTIVE SUMMARY

Mission Statement

All students will graduate prepared and ready for college or career. School Board's Student Outcome Goals The percentage of students in kindergarten–grade 2 who are reading on or above grade level

on two measures shall increase from 50 percent to 75 percent by the end of the school year 2020.

The percentage of students in grades 3–8 who meet standards on both reading and mathematics STAAR shall increase from 52 percent to 75 percent by the end of the school year 2020.

The four-year graduation rate shall increase from 85 percent for the graduating class of 2015 (reported in November 2016) to 95 percent for the graduating class of 2020 (reported in November 2021).

Budget Manual Purpose and Basis for Presentation The MISD ISD Budget Manual contains information on budget planning as practiced by Midland ISD, budget codes used by Midland ISD and miscellaneous information for reference. We follow the Texas Education Agency’s (TEA) Financial Accountability System Resource Guide (FASRG) when it comes to budget codes. The budget provides the financial resources necessary to improve the instructional environment for all students, to continue offering a competitive salary & benefits package to employees and to operate our campuses. Additional information is available within the District’s Board Policies, Additional Manuals, Administrative Procedures, or other web resources, such as TEA’s Financial Accountability System Resource Guide (FASRG). If assistance is needed in any area of our business operations, please contact any of the staff members listed below. Financial Services Office Administrators The Financial Services Department Administrators shall perform multiple roles; however, adequate controls of separation of duties shall be maintained at all times. The staff consists of:

Darla Moss Chief Financial Officer Extension 1018

Carla Martin Executive Director of Finance Extension 1903

Tony Kingman Director of Budget Extension 1978


Budget Manual Sections Midland ISD’s budget is organized into three major sections: Introductory, Informational, and Budget Process. All sections assist the reader in understanding all areas that determine the annual budget of Midland Independent School District. The INTRODUCTORY SECTION provides an overview of the entire budget manual and the legal requirement that the District is required to follow when preparing its budget. The INFORMATIONAL SECTION provides details about Accounting Code Structure and explain each Budget Codes. The BUDGET PROCESS SECTION is the final section of the budget manual. The purpose of this section is to describe the budgeting cycle used by Midland Independent School District (MISD) in a fiscal year.


INTRODUCTORY SECTION Budget Definition A process of allocating resources to prioritized needs of a campus and/or district A product of the campus and district planning process A valuable tool in the planning and evaluation process The link between instruction and financial planning

Budget Year Midland ISD’s fiscal year - 07/01- 06/30

Midland ISD Funding Two major revenue sources

o Local property taxes o State funding

Funding based on: o Student attendance o Enrollment in specialized programs

State Funding o Based on local tax effort (as property values increase, state funding decreases) o Limited based on property wealth

Legal Requirements According to MISD Board Policy- CE (Local) & CE (Legal), MISD’s budget shall be in compliance with the following legal requirement: State Law – Texas Education Code (TEC) 44.002 through 44.006 Superintendent (or designee) shall prepare budget President of Board must call public hearing Notice of the public hearing must be published in a daily, weekly or bi-weekly newspaper

published in the district (not earlier than 30th day or later than the 10th day before the date of the hearing)

No funds must be expended until adoption of the budget Budget must be prepared in accordance with GAAP (accounting practices) Budget must be adopted before the tax rate Public funds of a district may not be spent in any manner other than as provided for in the

budget adopted by the board, but the board may amend a budget or adopt a supplementary emergency budget to cover necessary unforeseen expenses.

State Law – TEC 29.081(b-1) A district that is required to provide accelerated instruction under TEC 29.081 (b-1) shall

separately budget sufficient funds, including funds under Education Code 42.152, for that purpose.

A district may not budget funds received under Education Code 42.152 for any other purpose until the district adopts a budget to support additional accelerated instruction. Education Code


29.081(b-2) State Law – TEC 44.0041 The district shall post a summary of the proposed budget on the school district’s Internet

website or, if the district has not Internet website, in the district’s central administrative office.

State Law – TEC 44.0051 On final approval of the budget by the Board, the district shall post on the district’s Internet

website a copy of the budget adopted by the Board. (Note. The budget must remain posted on the website until the 3rd anniversary of the date the budget was adopted.

State Law – Local Government Code 140.0045 The proposed budget of a district must include a line item indicating expenditures for notices

required by law to be published in a newspaper by the district or a representative of the district that allows as clear a comparison as practicable between those expenditures in the proposed budget and actual expenditures for the same purpose in the preceding year.

TEA Requirements Budget must be adopted by Board by June 30th Minutes must reflect all Budget adjustments At a minimum, the General Fund, Food Service Fund and Debt Service Fund must be adopted Budget must be filed with TEA through PEIMS Budget must be amended before exceeding any function

Types of budget method used at Midland ISD Zero-based Budgeting Budget starts from zero each year. No reference to previous year’s budget, and each budget

inclusion must be justified. Budget prepared by dividing operations into decision units. Individual units then aggregated to decision packages on basis of program activities, goals, organizational units, etc.

Student Allocation Budgeting Student Allocation is a formula used to equally distribute local budget funds to schools within

the district based upon the number of students we serve as well as the needs and characteristics of those students.


INFORMATIONAL SECTION

Roles and Responsibilities in the Budgeting Process District-wide Must comply with federal/state laws and local board policies Must ensure that all resources are reflected in the District/Campus Improvement Plans Must ensure that all students are served Must ensure that all students in special programs are served in accordance with TEC Campus Principal and Department Director Acts as budget manager for the school/department Finalizes the campus budget and submits to the Financial Services Office and the

Superintendent Financial Services Office Administrators Prepare and review of staffing needs (Human Resources & Chief Financial Officer) Review of special program compliance (Executive Director State and Federal Program) Review of Campus Plan and budgets to ensure compliance with District Plan (Chief Academic

Officer & Executive Academic Directors) Review of budgets to ensure fiscal compliance (Chief Financial Officer) Superintendent Conducts final review of campus and department budgets Submits proposed budgets to the School Board School Board Reviews the District’s budget & goals for the upcoming fiscal year Conducts budget public hearings Adopts the official budget


Accounting Code Structure

The Financial Accounting & Reporting Module of the Financial Accountability System Resource Guide (FASRG) contains the required accounting code structure. Use of the appropriate accounting code structure is mandatory. The code structure is available on the TEA website at www.tea.state.tx.us.

A major purpose of the following accounting code structure is to establish the standard

school district fiscal accounting system required by law. Although certain codes within the overview may be used at local option, the sequence of the codes within the structure, and the funds and chart of accounts, are to be uniformly used by all school districts in accordance with generally accepted accounting principles.

Exhibit #1 (FAR: 1.4.1 Overview of Account Codes)


The Midland ISD Chart of Accounts is illustrated below:


Basic System Code Composition

As discussed earlier, the account code structure is comprised of twenty digit codes that are divided into nine sections.

The Account Code Structure The FAR Module contains a description of all parts of the 20-digit account code:

1 Fund A mandatory 3 digit code is to be used to identify the fund group or specific group

2 Function

A mandatory 2 digit code that identify the purpose of the transaction

3

Object

A mandatory 4 digit code that identifies the nature of the transaction or source

4

Sub-Object

A 2 digit code for optional use to provide special accountability at the local

5

Organization

A mandatory 3 digit code that identifies the organization (campus or department)

6

Fiscal Year

A mandatory 1 digit code that identifies the fiscal year of project year of the expense

7

Program Intent

A mandatory 2 digit code that designates the intent of a program provided to students

8

Optional Codes

A 3 digit code for optional use to further describe a transaction

To simplify the understanding of the code structure, this manual will provide a definition and an example of each section as it applies to MISD.

FUND CODE A mandatory 3-digit code (number 1 in the Code Structure) is to be used for all financial transactions to identify the fund group and specific fund. The first digit refers to the fund group, and the second and third digits specify the fund.


Budget Code Example

FUNCTION CODE

A function code (number 2 in the Code Structure) represents a general operational area in a school district and groups together related activities. Most school districts use all of the functions in the process of educating students or organizing the resources to educate students. A mandatory 2-digit code applied to expenditures/expenses that identifies the purpose of the transaction. The first digit identifies the major class and the second digit refers to the specific function within the area. For example, in order to provide the appropriate atmosphere for learning, school districts transport students to school, teach students, feed students and provide health services. Each of these activities is a function. Budget Code Example

Major Functions Function Codes are grouped according to related activities in the following major areas/classes: 10 Instruction and Instructional-Related Services 20 Instructional and School Leadership 30 Support Services – Student (Pupil) 40 Administrative Support Services 50 Support Services – Non-Student Based 60 Ancillary Services 70 Debt Service 80 Capital Outlay 90 Intergovernmental Charges Each of these major areas is further defined by detail function codes. The code is required for PEIMS reporting purposes if such costs are applicable to the school district. Please refer to “Financial Accountability System Resource Guide” (FASRG) for a complete list of Function Codes.

Code Description: Local Maintenance Fund (199) Instructional Supplies at Lee High School

00 11 002 00 6399 11

Local Local Option Option

Program Intent

Code Description: Local Maintenance Fund Social Work Services Supplies at Lee High School

00 99 002 00 6399 199


Program Intent

Fund Function Exp/Object Sub‐ Org/Dept Fiscal Object Year



OBJECT CODE

Expenditures/expenses should be classified by the major object classes according to the types of items purchased or services obtained. An expenditure/expense account identifies the nature and object of an account, or a transaction. The school district’s accounting records are to reflect expenditures/expenses at the most detail level, as depicted in the chart of accounts (4 digits, number 3 in the Code Structure) for accounting and Public Education Information Management System (PEIMS) reporting (Budget and Actual data) purposes. If a school district needs to use codes in addition to the mandatory codes for managerial purposes, the optional codes provided for local use in the code structure should be used. These codes are distinguished from other types of object codes as they always begin with the digit “6”. A mandatory 4-digit code identifying the nature and object of an account, a transaction or a source. The first of the four digits identifies the type of account or transaction, the second digit identifies the major area, and the third and fourth digits provide further sub-classifications. Expenses are debited in the accounting period in which they are incurred.

Budget Code Example

There are six major expenditure classifications. They are as follows:

Major Object Code

Expenditure Classification

6100 Payroll Costs

6200 Professional & Contracted Services

6300 Supplies & Materials

6400 Other Operating Costs

6500 Debt Service

6600 Capital Outlay

Please refer to “Financial Accountability System Resource Guide” (FASRG) for a complete list of Object Code.

Code Description: Local Maintenance Fund Instructional Supplies at Lee High School

00 11 002 00 ➔6399 11 199

Local Local Option Option Intent Year

Fiscal Program Org/Dept

Sub‐ Object

Fund Function Exp/Object


SUB-OBJECT CODE

A school district may use the optional codes 1 and 2 (number 4 in the Code Structure) if there is a need to account for information not otherwise provided in the mandatory chart of accounts. If a school district uses these optional codes, a locally devised chart of account is to be uniformly used in the accounting system. Sub-Objects are used at the discretion of the District to distinguish between different types of expenditures where separate accounting is desired. A 2-digit code for optional use to provide special accountability at the local level. Budget Code Example

ORGANIZATION CODES

An organization (number 5 in the Code Structure) is a group of employees who are obligated to complete a specific responsibility. Usually, an organization has an identifiable leader or an individual who is accountable for the overall completion of the responsibility. There are two (2) distinct types of organizational units: (1) A campus organization (school) and (2) administrative or other unit which performs specific support responsibilities. Campus organization codes as defined in the Texas School Directory are to be used for all costs clearly attributable to a specific organization.

A mandatory 3-digit code identifying the organization, i.e., High School, Middle School, Elementary School, Superintendent’s Office, etc. An organization code does not necessarily correspond with a physical location. The activity, not the location, defines the organization. Campuses are examples of organization codes and are specified for each school district in the Texas School Directory. Budget Code Example

Expenditures for Brackenridge High School must be classified as 002. This is a campus organization code that is defined in the Texas School Directory for that high school.

Code Description: Local Maintenance Fund, Instructional Supplies at Lee High School.

00 11 002 ➔00 6399 11 199


Program Intent


Code Description: Instructional Supplies at Lee High School

00 11 ➔002 00 6399 11 199



Sub‐ Object



Midland ISD’s Organization Code:


FISCAL YEAR CODE A mandatory 1-digit code that identifies the fiscal year of project year of the expense Budget Code Example

PROGRAM INTENT CODE A mandatory 2-digit code that designates the intent of a program provided to students. Used to account for the cost of instruction and other services that are directly toward a particular need of a specific set of students. Budget Code Example

Code Description: Instructional Supplies at Lee High School for 2018‐2019 Fiscal Year

00 11 002 00 6399 11 199



Sub‐ Object


Code Description: Instructional Supplies at Lee High School for Basic Education Program

00 ➔11 002 00 6399 11 199



Sub‐ Object


➔9


BUDGET PROCESS FY2019-2020 Budget Calendar

Description Date Responsible Dept.1 18-19 Fiscal Year Begins July 2018 District

2 Midland Central Appraisal District (MCAD) provides Certified Appraisal Values toDistrict for 18-19 tax year

July 25, 2018 MCAD

3 Payroll Review to ensure projections are in line and appropriately coded. Preparebudget amendment as needed

July-September,2018

Budget Office

4 Adoption of Ordinance Setting the Tax Rate for 19-20 Budget August 13, 2018 Board of TrusteesAction Item

5 1st Quarter (Jul-Sep): Budget Amendments due (cross-functions) to the Budget Office September 28,2018

Budget Office

6 1st Quarter (Jul-Sep): Quarterly FY 2018-19 Budget Amendment October 8, 2018 Board of TrusteesConsent Item

7 Development of Campus, Department, and Program Detailed Spending Plans for FY2019-20. Discussions on Budget Priorities, Student Needs, Options to Address

November-December, 2018

Campus, Departments, and Program Managers

8 2nd Quarter (Oct-Dec): Budget Amendments due (cross-functions) to the BudgetOffice

January 14, 2019 Budget Office

9 Board Budget Workshop #1: Initiation of the budget process with a discussion of theFY 2019-20 Budget Development Calendar

January 15,2019 Board of TrusteesWorkshop

10 Begin Student Enrollment & Staffing Projections for FY 2019-20 January, 2019 Budget Committee

11 2nd Quarter (Oct-Dec):Quarterly FY 2018-19 Budget Amendment January 22, 2019 Board of Trustees

12 First Draft of FY 2019-20 Budgets are Submitted January 25, 2019 District Wide

13 Determination of Projected Revenue and Expenditures. Determination of Maintenanceof Effort. Analysis Provided to Cabinet

February, 2019 Budget Office

14 Evaluate/Review Student Enrollment Projections February, 2019 Budget Office

15 Review and Approval of Campus, Departmental and Program Budgets February 8, 2019 Executive Directors

16 Preliminary Review and Approval of Campus, Department, and Program Budgets February 15, 2019 Cabinet

17 2nd Quarter Finance Committee Meeting to discuss FY 2018-19 Update and FY 2019-20 Budget Progress

February 26, 2019 Finance Committee ofthe Board

18 Preliminary Review and Approval of Campus, Department, and Program Budgets March 1, 2019 Superintendent

19 Review and Proposal of edits to align Expenditures with Revenue, Board andSuperintendent's Priorities

March, 2019 Superintendent's Cabinet

20 Board Budget Workshop #2: FY 2019-20 Forecast. Includes revenue projections, pupilprojections, compensation plan, health care costs, and discussion of Board Priorities

April 16, 2019 Board of TrusteesWorkshop

21 MCAD provides Preliminary Appraisal Values to District for 2019 tax year April 30, 2019 MCAD

22 3rd Quarter (Jan-Mar): Budget Amendments due (cross-functions) to the Budget Office March 29, 2019 Budget Office

23 3rd Quarter (Jan-Mar):Quarterly FY 2018-19 Budget Amendment April 8, 2019 Board of TrusteesConsent Item

24 Adopt FY 2019-20 Compensation Plan April 18 , 2019 Board of TrusteesAction Item

25 Board Budget Workshop #3: FY 2019-20 Forecast. Projections for historical exemptionand approval of budget public meeting information

May 29, 2019 Board of TrusteesWorkshop

26 Post Budget Summary on Website, Publish Budget and Tax Rate Advertisement ofPublic Hearing in Newspaper

June 14, 2019 Financial Services

27 Public Hearing on Budget and Tax Rate June 24, 2019 Board of TrusteesPublic Hearing

28 Adopt FY 2019-20 Budget ( Must be adopted by June 30, 2020) June 24, 2019 Board of TrusteesAction Item

29 4th Quarter (Apr-Jun):Quarterly FY 2018-19 Final Budget Amendment June 24, 2019 Board of TrusteesConsent Item

30 Adopt Tax Rates for FY 2019-2020 August, 2019 Board of TrusteesAction Item

31 Approval of Final Tax Roll October, 2019 Board of TrusteesAction Item


Budget Process Overview The purpose of this section is to describe the budgeting cycle used by Midland Independent School District (MISD) in a fiscal year. The budgeting process is comprised of four steps: Preparation, Board Approval, Execution and Reporting & Auditing.

Budgeting Objectives Determining if revenues are sufficient to cover expenses Controlling Resources Providing transparency into organization’s performance Ensuring Accountability Evaluating the performance of managers Motivating managers to strive to achieve budget goals Assisting stakeholders in assessing the service efforts, costs, and accomplishments of the

District

Preparation

-Identify Objectives and Goals

-Determine Revenue & Chapter 49 Payment

-Creation of Campus & Department Budgets

-Budgeting of Salary & Benefits

Board Approval

-Hold annual public hearing

-Adopt Budget

-Amend Final Budget prior to June 30

Execution

-Budget Transfers

-Budget Amendments

-Budget Monitor

Reporting & Auditing


Legal Requirements Relating to Budget Education Code: Proposed budget must be prepared on or before June 19 Proposed budget must be adopted by June 30 Post a summary of the budget on the District’s website in prescribed manner Public meeting must be held for the purpose of adopting budget Notice in newspaper required to be published not earlier than the 30th day or later than the

10th day prior to the public meeting

Official District Budget – General Operating Fund, Food Service Fund, and Debt Service Fund Must be adopted at the fund and function level May approve budgets for other funds and in greater detail Adopted budget must be filed with the Texas Education Agency Handled through the fall submission of PEIMS (Public Education Information Management

System) Required Newspaper Publication of Notices by School Districts https://www.tasb.org/services/legal-services/tasb-school-law-esource/business/documents/required-newspaper-publication-notices-by-school-districts.pdf Budget Process Preparation In this step, the District defines the goals and objectives of campuses and departments. Once these goals and plans have been established, budgetary resource allocations are made to support them. Determine the District Revenue and Chapter 49 Payment Budget Department will create the district’s revenue budget and Chapter 49 Budget based on the latest estimated taxable value and the historical Average Daily Attendance (ADA). The estimated taxable value will be provided to the Budget Department by the Midland Appraisal District. The historical ADA will be provided to the Budget Department by Midland ISD’s Student Services Department. Midland ISD’s Revenue and Chapter 49 Budget are created based on Region 12 Woody Template, TASB Revenue Template and Region 13 Omar Template. Creation of Individual Budgets Budget Managers were selected according to their level of influence and control over expenses in each campus and department of MISD. For the campuses, the principals were chosen as the department managers. For the departments, the department heads were chosen as the budget managers. From the first quarter of each fiscal year, it is essential that the Financial Services Office Administrators meet with all of the Budget Managers. The purpose of these meetings is to explain the budget creation process, which consists of showing the budget managers the following items: the current budget and actual expenses, a timeline of expected submissions and a quick overview over the account numbering system used by MISD. The budget manager is responsible


to ensure that the campus/department’s plan and the campus/department’s proposed budget are aligned with each other, i.e. all new items listed on the campus/department’s plan should be included in the proposed budget. It is also the budget manager’s responsibility to ensure that special program funds are budgeted for all special populations represented on the campus. During this step, budget managers are recommended to come to the Business office to resolve budgeting questions or receive training about uploading their individual budgets to the accounting system (Skyward). Of note, campus and department staff are also recommended to monitor their respective budget on a regular basis. All budget managers must submit their preliminary budget to the Budget Department, by the end of the second quarter of each fiscal year. By the second week of the third quarter of each fiscal year, all individual budgets must be submitted in Skyward. During the third quarter of each fiscal year, the Superintendent and/or the Chief Financial Officer will meet with all budget managers to review the submitted budgets and make adjustments. Financial Services Office Administrators’ Duties Determine the staffing needs for the upcoming fiscal year Review all individual budgets to ensure that they are reasonable and follow all legal

requirements. Prepare and submit a prioritized list of major projects – to include costs associated with

proposed new programs, building renovations, fixed assets (equipment with a unit cost > $5000,) and technology projects

Determine Chapter 49 Recapture Payment Determine the District’s revenue and tax rate for the upcoming fiscal year based on inputs

from MCAD, local economy and other relevant sources Budgeting for Staff Salaries should be budgeted based on the employee’s position, employee’s assigned location, and the purpose of the position. The budget plan should be based on the compensation plan presented by MISD’s Human Resources Department. The number of teachers also need to be based on the number of students per teacher ratio. Worth noting, the current ratio according to the District’s plan is 22 students per teacher. Budgeting for campus/department may be determined by roles and responsibilities of staff. For example, transportation staff shall be based on the total bus routes for regular, special education, and special programs. Food Service staff shall be based on the meals per labor hour at each campus The PEIMS Staff Data profiles (submitted in the Fall PEIMS submission) should be checked carefully to ensure that the payroll and responsibility data match. Budgeting for Federal Funds, State Funds & Chapter 49 Financial Services Office Administrators are recommended to utilize Region 13- Omar Garcia’s most updated template to calculate Federal Funds & Chapter 49 Payments. The budget for


federal funds is following the grand award period. State Funding is calculated as follow: Tier 1 - provides school districts a basic level of funding with allotments for regular education;

special education; compensatory education, including Pregnancy Related Services; career and technical education; bilingual / English as a Second Language education; gifted and talented education; and public education grants

Tier 2 - supplements the basic funding provided by Tier I. Tier II guarantees a specific amount of funding per student in weighted average daily attendance (WADA) for each penny of a school district’s tax effort above a specified level. The funding provided by this additional tax effort is also referred to as enrichment.

Additional State Aid for Tax Reduction (ASATR) – ELIMINATED IN 2017-18 (does not affect Midland ISD)

Helpful website: TEA Grant Resources: http://tea.texas.gov/Finance_and_Grants/Grants/ Omar Garcia Template: http://www4.esc13.net/finance/ Board Approval The board of trustees will hold an annual public hearing on June 18 and approve the proposed budget. The budget must be adopted before adoption of tax rate. If adopted at the same board meeting, agenda item for adoption of budget must be considered first. Worth noting, the official tax rate dictates the influx of revenue through the major revenue stream Midland Independent School District (MISD) possesses, which is Local Property Taxes. As a Chapter 49 designated school district, approval must be received from the Texas Education Agency (TEA) before the tax rate can be set. Budget amendments are mandated by the state when funds are moved from one functional area to another – these amendments require board approval. The board of trustees will approve the cross-function transfers once every quarter. The Final Amended Budget shall be approved by the School Board prior to June 30th for the current fiscal year. Execution Budget Transfers If during the year a budget manager needs to transfer money within their budget, the manager will request a budget transfer. Budget transfers (within functional areas) – may be initiated by a campus principal or director as the need arises. The Director of Finance/Budget Coordinator will approve and record budget transfers on a timely basis. To keep budget transfers to a minimum, each budget manager should review his/her budget on at least a monthly basis to determine if any budget transfers are necessary. Budget Amendments A budget amendment is a transfer of funds across different functions. For example: a budget amendment would result if instructional funds (function 11) were requested to be transferred to


the library (function 12). Budget amendments must be approved by the school board. If a purchase order is pending the outcome of a budget amendment, the purchase order will not be processed until after the Board has approved the request. Budget Monitor During the year the budget managers of each campus and department are recommended to monitor their expenses in all of their accounts on a regular basis. The budget managers will obtain a report of their budget and their campus/department actual expenses monthly sending out by the Financial Services Office. If a purchase order surpasses the available balance within a particular account, the requester of the purchase order will get a notice of insufficient funds. The report will help the budget managers understand if they can spend additional funds during the year. Reporting & Auditing GASB 34 requires that governments present their budget-to-actual comparisons on a budgetary basis and include a schedule that reconciles the budgetary and GAAP amounts. These reports are presented in the Annual Financial Report of MISD. MISD will prepare closing entries to close the fiscal year and use these amounts to compare against the budgeted amounts. The persons in charge of reviewing all journal entries before closing the books are the Controller, the Director of Finance and the Chief Finance Officer.

budget procedures manual - midlandisd.net · 2019. 8. 20. · budget manual purpose and basis for...

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