TIER II TRAINING

TIER II TRAINING

As required by A.C.A § 6-20-2204

Presented by

Mike Mertens

2013

Tier II Sanctions

• Any school district or charter school that does not comply with these rules shall be identified as being in fiscal distress.

• Any ESC shall be sanctioned by the State Board of Education.

• Any licensed employee that provides false expenditure information may have his or her license revoked.

Agenda

• New Laws• Account Coding• Purchasing• Budget Management and Control• Employee Compensation• Fixed Assets• Fiscal Reporting• Audit and Ethics• Personnel Records• Issues of Local Concern

New Laws of the 89th General Assembly

• Unless new laws have an emergency clause or specified start date, they become law on August 16, 2013.

• If they have an emergency clause, they become law on the date they are signed by the Governor.

Act 8 of 2013

• Allows temporary license to be issued to spouse of an active duty military service member.

• While completing the application process for full licensure.

Act 75 of 2013

• Common Spring Break is not “permanent.”

• 38th week of the fiscal year, which start each year with, “the first Monday after the first Sunday in July.”

Act 413 of 2013

• Establishes an Accelerated Teaching Program which allows a method of obtaining a teaching license without traditional methods and includes:

– Teach for America– AR Teacher Corps Program offered by UA.– Others approved by the ADE.

Act 421 of 2013

• The AR State Board of Education may grant a waiver to districts for combining or embedding curriculum from two separate courses into one combined course. Ex: Oral Communications, Keyboarding.

• Only applies in grades 5-12.

Act 424 of 2013

• Aligns language for Kindergarten enrollment from other countries and removes obsolete language.

Act 459 of 2013

• Master School Principal Program

– Defines “high-need public school.”– Principals completing the Master principal

Program are eligible for $25,000 salary increase for taking a principal’s job in a “high-need public school.”

Act 511 of 2013

• Amends the Free Textbook Act– ADE will no longer develop an “approved” list. – Providers shall not charge AR schools a price that

exceeds the lowest contracted price currently bid in another state.

– Providers must sell products at some price for every school in Arkansas.

– Providers must submit prices to ADE. – “Instructional materials selection committee.”

Act 709 of 2013

• Amends TESS– Changes “categories” to “domains.”– Defines “evaluator” as a licensed administrator

that is an employee of the school district. – Gives additional information and options for

tested and non-tested areas. – Allows district-created external assessments

measures including formative assessments.

Act 1117 of 2013

• Extends the authority for the Athletic Trainer Task Force to meet the next 2 years.

• AAEA, AREA, and AAA have representatives on this Task Force.

Act 1230 of 2013

• Positive Youth Development Grant Program.

$5,000,000 appropriation.

Funds grants under the Positive Youth Development Program that was established by 2011 legislation.

Act 1285 of 2013

• College and Career Coaches

– To be administered by the ACTE in partnership with ADE and ADHE.

– Enabling legislation – no funding.

Act 1289 of 2013

• National Guard – students who join and are 17 while in the 11th grade.

– May be granted additional absences in order to complete basic combat training, at the discretion of the superintendent.

Coding –Who Cares??• The Governor • The Legislature and the Taxpayers• Adequacy Education Subcommittee• Arkansas Department of Education• The Superintendent and Board• The Finance and Personnel Office

Why?Comparisons, Transparency

APSCN Data

• Error rates……….required by law.

• # of Journal Entries are tracked.

• Code correctly…………

• Check for accuracy……….

Each District School Develop a Data Quality Program

• Designed to:– Reduce errors. – Reduce the # of code changes. – Reduce down time and data errors. – Reduce cycle tardiness.

Do We Have a Statewide Uniform System of Accounting?

Yes, it is called the…..

Arkansas School and Educational Cooperative Financial Accounting Manual (Handbook IIr²)

Uniform System of Accounting

• APSCN (AR Public School Computer Network)

• www.k12.ar.us

• If using a copy over 18 months old, DOWNLOAD A NEW ONE!!!

• FMS listserv

http://www.k12.ar.us/

Basic Accounting Concepts

• The basic purpose of any accounting system is to provide an organized and consistent method of managing funds.

• Where do the funds come from…..and where do they go???

• Consistency is important when comparing financial data across multiple accounting periods. And……being able to identify the reasons for inconsistencies.

Reasons for “Standard” Chart of Accounts

• Consistent method of reporting. • Allows for valid comparisons of finances. • Improves the value of statewide financial

information.

• ALLOWS DISTRICTS TO IDENTIFY:TRENDS…..COMPARISONS….. and to make PROJECTIONS.

REMEMBER…..

• GUESSING IS NOT AN APPROVED METHOD OF DEVELOPING A BUDGET!!!

and…..

• The pieces haveto fit!!!

Indirect Cost Rate

• Basically a reimbursement to local district for serving federal programs.

• Budget it! Use it! (not required to use it)• ADE will tell districts what their indirect cost

rate is each year through a Commissioner’s Memo.

How to Help Ensure Accurate Coding of Property Taxes

• To reconcile school district receipts for a calendar year to county collections for the same year, the month of January needs to be considered.

• Districts receipts of property tax relief should agree, or be very close, to what the County received for the fiscal year.

Reporting

• Act 633 of 2011 requires county treasurers to report property tax data to ADE by January 31.

• Penalty clause – 20% of reappraisal funds are withheld.

• Districts are given time to review reported data for accuracy. Generally in March.

• Why is accuracy important? Determines foundation funding, URT adjustment, etc.

Diagram of a Budget UnitXXXX-XXXX-XXX-XXX-XX-XXXXX

• Fund/Source of Funds (4)• Function (4)• Location (3)• Program (3)• Subject (2)• Object/Account (5)

FUNDXXXX-XXXX-XXX-XXX-XX-XXXXX

Each fund is created for a unique purpose

1000 series – Teacher Salary Fund2000 series – Operating Fund3000 series – Building Fund4000 series – Debt Service Fund5000 series – Capital Outlay/Dedicated

M&O6000 series – Federal Grants Fund7000 series – Activity Fund8000 series – Food Service Fund9000 series – Fixed Assets Fund

Building Fund

• If part of the legal fund balance is being retained for future construction/renovation projects, it should be transferred to the Building Fund. An ADE recommendation!

• School Board approval should be obtained whenever funds are transferred to or from the Building fund.

Student Activity Funds

• Policies relating to the establishment and maintenance of all activity funds should be in writing and should contain good cash handling and accounting procedures.

• All activity fund supervisors and sponsors should receive a copy of these procedures.

• YOU GET WANT YOU INSPECT NOT WHAT YOU EXPECT!!

FUNCTIONXXXX-XXXX-XXX-XXX-XX-XXXXX

• The Function describes the activity being performed when a service is provided or a material object is received.– 1000 series – Instruction

• 1110 Kindergarten, 1120 Elementary, 1130 Middle/Junior, 1140 High School, 1150 Athletics, 1160 Activities, 1220 Resource Room, 1330 Business Education, 1360 Home Economics, 1910 GT

– 2000 series – Support Service• 2122 Counselor, 2134 Health Services, 2219 Athletic

Director, 2222 Library/Media Services, 2410 Office of Principal, 2580 Technology, 2600 M&O, 2700 Transportation

LOCATIONXXXX-XXXX-XXX-XXX-XX-XXXXX

Each campus in your district has a unique three-digit location code assigned by the ADE. Do you know yours?

000 District Wide001 _____Elementary School002 _____Middle School003 _____ Primary School004 _____ Junior High School005 _____ High School

PROGRAMXXXX-XXXX-XXX-XXX-XX-XXXXX

The Program classification is a plan of activities and procedures designed to accomplish a predetermined objective or set of objectives.

-200 Special Education-115 Athletics -116 Activity Funds (Extracurricular

Activities)-270 Gifted/Talented-438 Alternative Education

Program Codes

• Any one program can involve revenues from multiple funds and source of funds and require expenditures from multiple functions.

• The program code is used to track the total expenditures relating to

any one program.

SUBJECTXXXX-XXXX-XXX-XXX-XX-XXXXX

The subject classification is used for local accounting purposes. This is not required.

Can be used to identify courses (math, science, etc), sports, construction projects, mandated expenditures for elementary classrooms, etc.

OBJECT (Account)XXXX-XXXX-XXX-XXX-XX-XXXXX

The object classification is used to describe the service or commodity obtained as a result of a specific expenditure.

- 61000 series – Salaries (Employees Only)- 62000 series – Benefits (Employees Only)- 63000 series – Purchased Professional &

Technical Services- 64000 series – Purchased Property Services- 65000 series – Other Purchased Services

Requisitions

• Use correct vendor.• Be thorough in description: who, what, where

when. • Code correctly. • Code the expenditure for what you are

buying.• Budget transfers.

Purchasing/Disbursements A Purchase Order (PO) -

is a commercial document issued by a buyer to a seller, indicating the type, quantities and agreed prices for products or services that the seller will provide to the buyer.

constitutes a legal offer to buy products or services.

specify additional conditions such as terms of payment, liability and freight responsibility, and required delivery date.

Purchasing/Disbursements A Purchase Order (PO)

is an official and binding document issued to a vendor authorizing the expenditure of funds for goods and services

creates an encumbrance dedicating funds at the time the PO is originated by the purchasing department.

By using a PO, everyone involved in the purchase process can track the order by referring to the unique PO number as a standard reference.

Purchasing/Disbursements

A purchase order (PO)

documents what you’ll be buying from a vendor. It details what you have agreed to pay for, what the terms of the purchase are, and the amount you have agreed to pay.

is instrumental in tracking expenditures. is a control feature in the accounts payable

process


• Purchase orders are an internal control device. This is why it is important to execute a purchase order before the purchase is made.

• A purchase order executed after the purchase is meaningless!


• Internal controls provided by a purchase order– Authorization to purchase– Terms under which purchase will be made (price,

quantity, delivery, payment, etc.)– Designates funds to be used for payment– Evidence of compliance with purchasing laws and

policies– Matched to invoice for payment approval


• Purchase orders are not official until signed by the authorized person.

• Never alter a purchase order: You will be altering a legal document and auditors may consider this evidence of fraud.

• Keep voided PO’s.• Any purchase made without a properly authorized

PO, is not an obligation of the school, but is a legal obligation of the person placing the order.


The billing address should be the BUSINESS OFFICE!!This will ensure all invoices are paid in a timely

manner.

Code accurately: The state is becoming more demanding and particular in its reporting requirements. Getting it right at the beginning saves a lot of work later!


• Getting things paid…..– Pay only on invoices, not statements– Original invoices are preferred over copies– Invoices that are not turned in on a timely basis means

we cannot pay on time which means our account may be suspended and that hurts everybody!!!

– Turn in all paperwork promptly to ensure that the payment is process in a timely manner.

– Make sure all paperwork is submitted. Missing paperwork holds up payment

Purchased Services

• Always have vendor complete a W-9 prior to using their services.

What are your Reimbursement Rates for…..

• Mileage? (reimburse people or vehicles??)

• Meals? (include tips, room service, valet parking?)

• Overnight stays? (Actual cost or other?)

6-21-304. Manner of making purchases.

(a) (1)All purchases of commodities by any school district, except those specifically exempted by § 6-21-305, shall be made as follows:

(A) In each instance in which the estimated purchase price shall equal or exceed ten thousand dollars ($10,000), the commodity shall be procured by soliciting bids, provided that the purchasing official may reject all bids and may purchase the commodity by negotiating a contract. If the purchasing official, after rejecting all bids, determines that the purchase should be made by negotiation, then each responsible bidder who submitted a bid shall be notified of the determination and shall be given a reasonable opportunity to negotiate;

(B) Bidder Assurance and Disclosure Forms- Now required on all solicited bids.

(c) Open market purchases may be made where the purchase price is less than ten thousand dollars ($10,000);

Why Budget?

• A budget is the financial map to achieve your district’s goals.

• IT IS REQUIRED!!

Budget Management and Control

• A budget is required by Arkansas Code § 6-17-914

– prepare budget annually– approved by the board in a legally held meeting– electronically submitted by September 30 Cycle– State aid may be withheld

Budget Management and Control Periodic Review (usually monthly) is a good way

to find areas of concern.Monthly reports are to be sent to each principalCall the central bookkeeping office if budget and

expenditures do not appear as they shouldProvide reports to administrators and supervisors on

specific budgets. Detail Expenditure Status Reports – what you get monthly Audit Trails – shows in-depth transactions when you need them Accounts Payable Check Register – shows expenditures by each check

can be printed also

Budget Management and Control

• What happens if a budget is overspent?

– Budgets periodically reviewed – Budget oversight is a part of performance

evaluation– Transfers from other accounts– Activity funds

Certified Staff

• ACA 6-17-2403 minimum teacher salary:– Bachelor’s Degree $29,244– Master’s Degree $33,630

• Minimum number of steps 15– BA Experience Steps: $450– MA Experience Steps: $500 – BA “Minimum” Top Salary: $35,994– MA “Minimum” Top Salary: $41,130

Certified Staff• Benefits

– Health Insurance – The required state minimum is $150.00 per month.– Dental Insurance – No requirement to offer. A number of districts

offer an individual policy at no charge with the option to purchase additional family coverage.

– Sick Leave – Each teacher shall be provided sick leave at a minimum rate of one (1) day per month or major portion thereof. “Per month or major portion thereof” is defined as twelve (12) or more working days. Can accumulate up to 90 sick days according to law. District policy can allow for more. School employees can transfer accumulated sick leave if they move from one district to another.

– Personal Leave – No requirement by law but many districts provide personal leave days.

Staff

• ACA 6-17-1208 “The number of days of sick leave provided by law are minimums only, and nothing shall prohibit any district from providing more days of sick leave or from having a more liberal policy for the administration of sick leave, including the establishment of sick leave pools or banks and allowing district employees who are husband and wife to utilize the other’s accumulated sick leave.”

Teachers

• ACA 6-17-1209 “Whenever a schoolteacher is absent from his/her duties as a result of personal injury caused by either an assault or a criminal act committed against the teacher in the course of employment, the teacher shall be granted a leave of absence from school with full pay for up to one (1) year from the date of injury.” Intervening in student fights are covered by this policy.

Classified Staff

• Arkansas Minimum Wage is $6.25 (Effective 10/01/2006).

• Federal Minimum Wage is $7.25• Minimum public school hourly wage amount

for 2013-2014 is $8.15 (for 20+ hours per week). This amount is adjusted annually to match the increase in the CPI (Consumer Price Index). (ACA 6-17-2203.) FIN-13-079

• Classified salary schedules should be posted on the district website.

Classified Staff

BenefitsHealth Insurance – The required state minimum

is $150.00 per month. Dental Insurance – Most districts offer the same

policy as that offered certified employees. Sick Leave – Generally the same as certified

employees. Personal Leave – Generally the same as certified

employees.

Classified Staff

• ALL classified staff (except supervisors exempt from overtime) should maintain a daily record of work hours.

• All hours beyond the employees contract require approval from the supervisor and/or superintendent

• Time records of all classified employees will be forwarded to the business office by a date established by the business office.

Pay for Extra Duties/Overtime

• Overtime and extra duty pay MUST have prior authorization.

• Examples include tutoring, home-bound, stipends (not included in contracts), gate workers, officials.

• Do not hire temporary staff without approval!!• All employees with extra duty pay must have a

completed Temporary Work Agreement or Supplemental Contract on file before beginning their extra duty work.

Extra Duty/Overtime

• DO NOT PAY ANYONE ABOVE THEIR CONTRACT AMOUNT UNLESS YOU HAVE DOCUMENTED AUTHORIZATION TO DO SO!!!

• Numerous audit findings.

Certified and Classified Staff

Other Mandated Benefits – Approximately 23.5% of salaries

Arkansas Teacher Retirement FICAMedicareWorker’s Compensation

Fixed Assets

Inventory

DO NOT discard or destroy any item that has an inventory tag/sticker/number on it. Any item that was previously listed as a fixed asset will have an inventory tag/sticker/number. In order to remove any fixed asset you need to complete an inventory deletion form and have it approved by the superintendent/business office.

Fiscal Reporting

State, Board of Education, Public

State• Written Reports• Electronic Reports (SIS from APSCN data)

– Cycle 1 – September 30 salary, budget, revenue, expend.– Cycle 2 – October 15 equity, employee, student, HQT– Cycle 3 – November 15 bus, ADM, Attendance, Fire drill– Cycle 4 – December 15 SPED, Parent Mailing Address– Cycle 5 – February 15 bus, ADM, Smart Core, Fire drill– Cycle 6 – April 15 bus, ADM, student status, Federal – Cycle 7 – June 15 discipline, SPED, ADM, bus– Cycle 8 – July 31 FTE, professional development– Cycle 9 – August 31 AFR (Annual Financial Report)

Public• Budget published in paper prior to school

election• Finance on the website

– Budget (annually)– Contracts (annually)– Salary and benefit expenses (monthly)– Fund balances (monthly)– Revenue status (monthly)– Personnel (classified and certified) policies– Audit (annually)– Annual Statistical Report (annually)

Audit and Ethics

Ethics Guidelines State law (A.C.A. §6-24-101) requires full open

disclosure and approval before a school district employee may sell, lease, provide services, or enter into other transactions with the school district where he/she is employed.

Therefore, every district employee will be required to disclose any potential vendor relationship by completing a disclosure form provided by the district. Failure to fully disclose could result in criminal felony charges being brought against the employee.

Ethics Guidelines

Act 1599 of 2001

Applies to Board Member, Administrators, and Employees.

Act 1599 sets the guidelines for business transactions between the school district and its board, administrators and employees.

May require both local board approval and state board approval.

Refer to Arkansas Code 6-24-100 through 6-24-120 for detailed information.

Ethics Guidelines

Act 1599 of 2001

The spirit of this act is to provide for full disclosure of business activities between the local school district and its board members, administrators and employees.

Board Members and Administrators are held to higher ethical standards, since they are in a position of control.

Ethics GuidelinesAct 1381 of 2005SECTION 2. Arkansas Code § 6-24-105 is amended to read as follows:

(a) General Prohibition. Except as otherwise provided, it is a breach of the ethical standards of this chapter for a board member to contract with the public educational entity the member serves if the board member has knowledge that he or she is directly or indirectly interested in the contract.

(b)(1)(A)(i) Employment of Family Members. This chapter does not prohibit family members of board members from being employed by the public educational entity the board member serves if the board determines that the employment is in the best interest of the public educational entity A board member's family member may not be initially employed by the public educational entity the member serves during the member's tenure of service on the local board for compensation in excess of five thousand dollars ($5,000) unless the Director of the Department of Education issues a letter of exemption and approves the employment contract based on unusual and limited circumstances.

Ethics Guidelines• Act 1381 of 2005(ii) The determination of unusual and limited circumstances shall be at the sole

discretion of the Director of the Department of Education and may be further defined by rule of the State Board of Education.

(B) A family member of a school board member who was employed by the public educational entity during the school year immediately preceding the election of the board member may continue employment with the public educational entity under the same terms and conditions of the previously executed contract and any renewal of the contract under § 6-17-1506.

(C) Subject to the local board's written policy, a qualified family member of a board member may be employed as a substitute teacher, substitute cafeteria worker, or substitute bus driver for a period of time not to exceed a total of thirty (30) days per fiscal year for the public educational entity served by the board member.

Ethics Guidelines

• Act 1381 of 2005

(2)(A)(i) No employment contract that is prohibited under subsection (b) of this section is valid or enforceable by any party to the employment contract until approved in writing by the Director of the Department of Education.

(ii) The Director of the Department of Education's approval of an employment contract may include restrictions and limitations that are by this subsection incorporated as terms or conditions of the contract.

Ethics Guidelines Act 1381 of 2005

(B) Excluding any renewal of a contract under § 6-17-1506, any change in the terms or conditions of an employment contract, a promotion, or a change in employment status for a family member of a school board member employed by a public educational entity that will result in an increase in compensation of more than two thousand five hundred dollars ($2,500) must be approved in writing by the Director of the Department of Education before any change in the terms or conditions of the employment contract or promotion or changes in employment status are effective, valid, or enforceable.

Common Audit Findings• Misuse of credit cards• No receipts for activity fund transactions• Deficit cash balance in activity funds• Inappropriate travel payments• Undocumented expenditures• Overstating deposits• Not timely on payments• Non-compliance with ethics law• Not taking bids when required• Inventory mismanagement

Recent Audit Experiences

• Fundraiser proceeds not deposited timely • Cash card gifts for students • Activity receipts without individual received

from name (only organization)• Stipends paid not on board approved schedule• Corrective Actions?

Arkansas Division of Legislative Audit

Personnel Records

Personnel Records

• Does everyone understand the need and requirement for PRIVACY?

Personnel Records

• Employment records• Personnel records• Public disclosure• Application forms and process• Health records• HIPPA

Issues of Local Concern,Activity Funds, Etc.

Receipting Money

• What does your auditor say regarding receipting money?

• Who handles money? • Who is allowed to receipt money?

Receipting Money

Encourage the practice of counting money in the presence of person bringing money in for deposit ( two people count the money and two people initial the receipt). This protects both parties.

Appropriate documentation should accompany all money brought in. Make sure all teachers and sponsors have a copy of the form being used. The teacher/sponsor must complete this form (or something similar).

Date:Received From: Name of IndividualAmount:How Paid: Cash and/or CheckFor: Be specificTotal amount of money to be deposited:Signature of Teacher/Sponsor

Receipting Money

• NO MONEY IS TO BE LEFT IN CLASSROOMS OVERNIGHT!!!

Receipting MoneyMiscellaneous

Make copies of all information submitted and keep in your office for questions, audit purposes, etc.

Return Receipt Books to the business office after all receipts have been used. Do not throw them away. The auditor will request them.

All money receipted in month has to be deposited in that same month.

Please contact the Business Office if you have any questions regarding the receipting process.

Secure receipt books in safe location.

Tickets for Events

Pre-numberedShall be used to account for cash receivedIf mistakes are made in collecting or making

change, have the gate worker describe what occurred in writing

If out of balance, do not tear off more tickets to make the amount match.

Report any other irregularities and provide written account of incident

Cash Handling Procedures

• All coin, currency and checks received from any source should be counted by two people and receipted on a pre-numbered receipt the same day they are received. Both people should initial the receipt.

• The receipt shall be completed with date, source of funds (who it is received from), short explanation describing the receipt (for), the total amount received, as well as the composition of the funds (cash and checks). The person receiving the funds should sign the receipt.

Cash Handling Procedures• The individual receiving funds is responsible for those funds until

deposited in the school district bank account or until receiving a receipt from another school district employee.

• When monies change hands between school district employees, it is recommended that the funds should be counted in the presence of both employees and a receipt issued at that time. Both people initial the receipt.

• All receipts shall be deposited intact. No payments of any kind shall be made from coin, currency or checks received by the school district.

• All receipts shall be deposited at least weekly and whenever the total receipted amount on hand exceeds ( ). All receipts should be deposited before weekends or holidays, regardless of the amount.

Cash Handling Procedures

• All copies of voided receipts must be kept in receipt book. An administrator should initial all voided receipts.

• Deposit tickets shall include the receipt number or range of receipt numbers that make up the deposit.

• All monies collected for school activities shall be deposited in school accounts.

Cash in Classrooms

• The principal’s office is the only appropriate location to keep funds collected for any reason. No money (cash, checks, whatever) should be left in classrooms or other offices overnight. No school funds will be taken away from school property. Employees are responsible for any cash, money left in their room or office overnight.

Voiding Receipts

• All copies of voided receipts must be kept in receipt book. Administrator should initial all voided receipts.

Spending the Public’s Money

• If it’s paid for with the school district’s or activity fund’s check, it is public money.

• When spending, ask yourself these questions:– Is it a school purpose?– What does your gut tell you?– Would it cause an outcry if published in the

paper?

Credit Cards

• Suggestions:– Have PO in hand to sign card out.

– Return immediately – or else.

– Original receipts!!!!!

Expense & Travel Reimbursements

Original receipts must accompany all requests for reimbursement. For a receipt to be valid, it should contain the name of the issuing company, the date, specific and detailed items purchased and amounts. Credit card receipts with only the total amount shown should NOT be accepted. Require a detailed itemized receipt.

Mileage allowance shall be reimbursed at a rate established by the district.

Meals for overnight travel shall be reimbursed based on our current per diem rates.

Use the district approved Travel Reimbursement Form!!

Expense & Travel Reimbursement (Continued)

• Expenses not covered– Alcoholic beverages– Entertainment expenses– Replacement due to loss or theft– Discretionary expenses for items such as clothing or

gifts– Medical expenses– Optional or supplementary insurance obtained by the

employee for the period covered during the travel

Questions???

• Contact Information:

– AAEA website: www.theaaea.org– AAEA Twitter: The_AAEA– AAEA Facebook: Arkansas Association of

Educational Administrators – AAEA Telephone: 501-372-1691

http://www.theaaea.org/

Documents

TIER II TRAINING