CLINIC SESSION: District Finance Report Card

CLINIC SESSION: District Finance Report Card

District finance report card aims to help school leaders make informed decisions

Kentucky School Advocate
March 2015
  
By Jennifer Wohlleb
Staff Writer
 
Kentucky school board members have a new tool to help them better understand their district's finances.
 
The Kentucky Department of Education has launched the finance report card, which puts three years of a district's financial data in one spot. Similar to the school report card with accountability data that has been available for years, and found on the same Web page, the finance report card is aimed at helping district leaders make good, fact-based decisions.
 
Kay Kennedy, KDE's director of the Division of District Support, conducted several workshop sessions explaining the new tool during KSBA's annual conference last month.
 
"The point of the report card is to make sure everybody understands that the data is there," she said. "We are trying to be transparent; we want folks to have good information that they can use to make the decisions that keep our school districts running smoothly and allow for good student achievement."
 
Kennedy said the report card grew out of a need the department saw to help people understand how districts conduct their financial business.
 
"We get calls all the time at the department about, 'I'm not sure about our district's finances. I can't understand what they're telling me,'" she said. "This may come from school board members, concerned parents, concerned constituencies."
 
Three years ago, Kennedy said KDE officials did a presentation about school finance entitled, 'What happens when you are going to hit the iceberg?" She said as a student of the history of the Titanic, she had been fascinated by different accounts that revealed some people on that doomed ship knew it was going to hit the iceberg long before it ever did.
 
"So how in the world, if you knew in advance, how did it hit the iceberg?" she asked. "More than one person knew that ship was headed to the iceberg. It still hit it and it still sank. How did that happen?
 
"There are indicators, especially in the world of finance, that can tell you if your district is heading toward an iceberg. There is not a person in here, I suspect, who would want their district to hit the proverbial iceberg. How can you and your constituents keep yourselves informed so that if there are indicators that say we're not going down the right path, we might want to look at these things so we don't hit the iceberg. How do you do that?"
 
Because the finance report card provides three years of data, it makes it easier to see trends, good and bad, that allow district leaders to be proactive rather than reactive. The report card has a list of key indicators that affect the financial picture of a school district.
 
"What those key indicators do is increase the transparency of what's going on in your district," Kennedy said. "What are our revenues, where are we getting our monies from, how can we influence that, what control do we have over that, what are our expenditures, how are we spending our money?
 
"MUNIS reports can be really intimidating if you’re not sure what you’re looking for. What we've tried to do here is bring some focus to particular areas that you may want to do a deeper dive into and figure out what's going on."
 
She said school leaders can identify areas of fiscal management they may want to improve, or look to another district, maybe a neighbor or one of similar demographics, to see how they are doing in those areas.
 
"The purpose is pretty much to shine the light, 'Let's see what we can do to better manage our resources,'" she said.
 
In addition to providing key indicators, if there is an area of potential concern, that box will be highlighted in orange, so anyone looking can quickly see it.
 
Kennedy emphasized that this data has been available on KDE's website for years, just not in this format.
 
"This is nothing new, but you had to go to about 15 places to find it," she said. "But we've collected it in one place and hopefully it's easier for you to look at, to get a quick snapshot and decide, 'Maybe this is something I need to be looking at more closely,' or, 'The data looks pretty good, let's move on and worry about something else.'"
 
The data comes from MUNIS, the statewide accounting system that every district uses, as well as the Infinite Campus student information system. KDE has the districts affirm the validity of the collected data before posting it online, usually by mid-March.
 
"The timing of the finance report card is different from the assessment report card," Kennedy said. "We don't get validated financial information until your audit reports are sent to the department, and then we review them and make sure your audit report matches up with your MUNIS reports.
 
"You have to have the audits in the October-November time frame, and by the time they get to the department and we review them, typically it will be the first or second week of March before we get that reported on the finance report card. "
 
To get to the finance report card, board members must go to the Kentucky School Report Card page, and click on District Report Card. Once on that page, the finance tab at the top takes users to the Financial Summary page, which lists the financial key indicators data. Next to that financial summary tab also are pages for revenues and expenditures, SEEK, taxes and salaries. That last tab also provides a link to all superintendent contracts and salaries in the state.
 
The finance report card also includes a glossary at the top of the page that provides definitions and descriptions as well as the calculations that were used on data elements.
 
Financial Key Indicators 
SEEK average daily attendance
Average daily membership
Average daily attendance
Fund balance
4 percent or above adopted tax rate
FTE (full time equivalent) certified staff
FTE certified staff - teachers
FTE classified staff
Percent of salaries and benefits to total expenditures
View text-based website