EDLD 5342, School Finance Week 5

EDLD 5342 School Finance

Week5, Part 1

Accepting money in return for awarding a vendor a contract is an example of TAC (Texas Administrative Code) of ethics, standard 1.2. This standard states that an educator shall not knowingly misappropriate, divert, or use monies, personnel, property, or equipment committed to his or her charge for personal gain or advantage.  This type of action can result in the district not being able to hire the most cost efficient, high quality contractor to provide a needed service.  This could result in the termination of all school official involved as well as open up the district for lawsuit from vendors who competed for the job.  Additionally, all parties involved could face criminal prosecution.  To prevent this sort of behavior, have all vendors present in an open forum and establish vendor selection procedure that force all decisions to be publically noted. 

The TAC Code of Ethics Standard 1.4. states that the educator shall not use institutional or professional privileges for personal or partisan advantage.  High ranking school officials are very aware that their job security could change should the composition of their school board change.  Using school district professionals and resources (i.e. phones, manpower, office space, etc.) to elect contact community members compelling them to vote for certain members of a school board.  This action would result in an un-fair election.  If this was discovered, it could result in removal of a board member and/or district employees.  The most damaging, long-term result would be that this type of conduct results in community mis-trust of school officials.  In order to prevent this sort of action, publish the existence of a reporting hotline and allow the anonymous posting of any concerns.  Additionally, establish procedures to investigate any and all concerns. 

TAC Code of Ethics Standard 1.7. states that the educator shall comply with state regulations, written local school board policies, and other state and federal laws.  An example of this would be if campus principal was caught allowing teachers to combine classrooms in order to give certain teachers an “earned” day off without having to officially record an absence.  Board policy states that teachers should have a substitute teacher provided in their absence and that all absences are recorded through our AESOP system.  This allows all teachers to take the days allotted by either the state or the district.  The action that this principal could have taken would have compromised the education of all the students who were in those combined class rooms because there were less instructors per student.  This could have resulted in grievances filed by others teachers or parents who were upset about the instructional arrangement of their child.  The existence of an anonymous hotline would be of benefit in this instance as well. 

Two additional example of unethical behavior can come from the following misapplication of the TAC Code of Ethics that dictates ethical conduct towards professional colleagues.  A violation of standard 2.3 is when a high ranking school official hired his son to serve as a campus athletic director even though candidate did not have any teaching or coaching experience.  This resulted in an unqualified candidate filling a position.  School district official must always follow written local school board policies and state and federal laws regarding the hiring, evaluation, and dismissal of personnel.  A second example comes from TAC Code of Ethics, standard 2.6. A high ranking school district official hired a single vendor to provide a multitude of services.  After the school district official retired, it was discovered that there were many more cost-efficient ways to provide the same required services.  Additionally, the retired school district official and his spouse promptly went to work for the vendor after retiring.  School district officials shall not use coercive means or promise of special treatment in order to influence professional decisions or colleagues.  Had this been discovered during this school district officials career, he could have been terminated.    

According to the state competencies for the superintendent he/she should be able to : “exhibit understanding and implement policies and procedures that promote district personnel compliance with The Code of Ethics and Standard Practices for Texas Educators”  as well as deal with all of these situations in a fair and ethical manner.   Additionally, “the superintendent should be able to monitor and address ethical issues impacting education as well as apply laws, policies, and procedures in a fair and reasonable manner”.  Any administrator who violates a TAC Code of Ethics standard risks termination.  A superintendent should be fully aware of each of these standards and increase employee knowledge of these standards to ensure compliance.  To make an error is part of human nature but, we can make the best decisions if we are fully aware of the established standards and how they relate to day-to-day professional conduct.

Week 5, Part 2

I marked all of the Administrative competencies above as a “C’, indicating that I feel competent enough to oversee each of these standards as they occur In my district but, I did not mark any as a strength.  I do not feel I could lead my district without extensive, day-to-day practice in each of the areas.   Much of the superintendent’s role requires this leader to have an understanding of each of the School Administrative Competencies to survive in the position; however, in most medium and large districts, there are school district officials who will serve as experts to carry out the detailed functions of each position.  I still will continue to work towards gaining a deeper understanding of each of the School Administrative Competencies to ensure I am prepared to take and pass the Texas Superintendent’s certification exam as well as utilize my growing understanding for the benefit of my current organization.

Lastly, I do not want to miss mentioning that I will focus on the competencies related to managing one's own time and the time of others to enhance district operations as well as applying legal concepts, regulations, and codes as required.  These are two areas that I feel superintendents often struggle with, as indicated in one of my interviews with my school superintendent.  Additionally, mastering these competencies will also benefit me in my current position through better management of my current responsibilities as well as ensuring that my current district complies with all legal and local school board policies, especially in areas that apply to my current responsibilities.


Week 5, Part 3

This course could not come at a better point in my career.  I have had at least one other school finance course; however, the focus of this course forced the student to understand the budgeting process, examine sources of revenue for the district, develop an awareness of the various accountability measures in existence that are used to measure the financial health of a school district, and, lastly, an application of the Texas Administrative Code of Ethics regarding school finance.  This course involved members of an assigned group working together to formulate answers.  Much of the responses required were very detailed; however, working as a group we were able to divide many of the assigned tasks, work together to answer many of the complex questions, and check our understanding. 

Superintendents in medium and large sized districts will likely have a person who handles all of the financial operations of the district.  The superintendent must still have a deep understanding of the functions of this school district official to ensure that all legal and local school finance policies are followed.  I now feel that I have a much deeper understanding of how to fulfill this role.  Additionally, the knowledge I have learned will help me in my current position.  I now understand the impact of accurate PEIMS records and can now quantify the cost of inaccurate PEIMS accounting for students who would give additional weight to the ADA (Average Daily Attendance).  Presently, we have the lowest ranking/paid person on each campus serve as the PEIMS clerk.  Additionally, there is very little district level training for these individuals and thus, many PEIMS errors are a result of lack of training and inconsistent application of PEIMS recording regulations.  This course has certainly helped me form a rationale as to why additional support is needed throughout our district and it has helped me sell the need for change to my superintendent. 

EDLD 5342 Week 4 Part 5

How is the external auditor selected?

In GPISD, the first step to finding a financial auditor is to ensure that the professional chosen meets the following criteria:  TEC 44.008(a) requires a financial audit to be performed annually by a certified public accountant holding a permit from the Texas State Board of Public Accountancy” (TEA FAS guide, pg 4).  To begin the process, GPISD requests that all interested auditors first submit Request for Qualifications (RSQ).  Our district then requests letters of reference for candidates meeting the qualification criteria.  Candidates are then selected based on their ability to perform a quality external audit.   

How does the auditor conduct the audit?

TEA has three standards the auditor must adhere to:

1.          A person or persons having adequate technical training and proficiency as an auditor must perform the audit.

2.          In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors.

3.          Due professional care must be exercised in the performance of the audit and the preparation of the report (TEA FAS guide, pg  17-18).

Additionally, auditors must also follow the Government Auditing Standards as well as the Generally Accepted Accounting Principles.

The overreaching goal of the external auditing process is to describe the degree to which the district appropriately uses federal, state, and local funding.  This auditing process does not occur only at one point during the year.  It is a process which occurs continuously over the entire fiscal year.  The external auditor must provide the district with an unbiased opinion regarding where the district is spending funds appropriately and what needs to be fixed.  In meeting with the district CFO, I inquired about the general types of findings revealed in the external auditors report.  He stated that if items are found, the external auditor helps to remedy the issue by providing guidance and timelines for the resolution of the problem.    The district is then responsible for responding to the guidance. 

The auditors final report has the following components:

·   Audit procedures used

·   Items reviewed

·   Finding of audit

·   Future recommendations

This report is completed once the books are closed at the end of the fiscal year.  The report is then shared with the Board of Trustees and with TEA.  This process holds the district accountable for sound procedures when spending district funds and accounting for these expenditures.  This process works toward eliminating the misuse of district funds.

EDLD 5342 Week 4 Part 4

When meeting with my CFO, I learned about the impact that personnel salaries have on district budgeting decisions.  Presently we are experiencing less funding from the state compared with previous years.  Because of decreased state funding, and because of the fact that personnel salaries comprise the largest expenditure in the maintenance and operations budget of any district (85.5% of total expenditures), many districts throughout Texas were forced to eliminate teaching positions.  Additionally, many districts in Texas were unable to provide raises for teachers.  Providing a 5% raise would cost almost half of the amount currently present in fund balance.  Since many districts, including my own district, are dipping into fund balance to remain solvent in the face of decreased state funding, providing a 5% raise would be impossible.

EDLD 5342 Week 3, Part 4

Based upon the latest Statement of Finances released by TEA on October 31^st, 2011, Galena Park ISD has a maintenance and operations budget equaling $69,523,894, based on the compressed rate used to determine funding of this function.  Of the total revenues, 59% are from the state, 40% are local, and 1% are federal.  The monies received are allocated to fund several functions.  The largest of these functions is the regular program allotment which is used to fund regular education.  The second largest allocation is used to support the education of economically disadvantaged students, followed by an allotment to fund special education students. 

Funds allocated through Tier I (as indicated on the Summary of Finances) generally match the allowed expenditures listed on the AEIS report or district snapshot.  A few of the programs actually spend less, such as the regular allotment.  One item that shocks me is the lack of expenditures tied to fund the education of students in a bilingual or ESL program in our district.  In 2009-10 GPISD spent $1.8 million dollars to fund these programs.  By comparison, GPISD spent $17,277,899 to fund special education programs in the district.  What makes the funding between these two programs interesting is the number of students.  GPISD served approximately 6,000 students in bilingual/ESL programs while only about 9% of GPISD students are served through our special education program.