Final Reflections on Lessons Learned

When this course began, I knew it would be very difficult for me.  As I have stated previously, finance is a very weak area for me.  I know I will probably get many comments from this next statement, but I am going to go ahead and say it - I don’t even participate in our home finances.  My husband does all of this and if something ever happened to him, our family would be in huge trouble!  I believe that I have learned a large amount of information in this course and I feel much better about school finance.  I  rated myself as “Competent” in all areas which is a huge gain from the first self-assessment.  I believe that the weekly lectures, readings, and resources provided the support and information that I needed to complete the assignments.  The interviews helped me immensely.  I learned a large amount of information from interviewing our Superintendent and our Business Manager.  I also discussed the class with our district Curriculum Director and my campus principal - both have their Doctorate degrees.  All of these professionals helped me greatly through this process.  I found it very helpful to work in a wiki group and thought it was interesting to see the different responses that each group member came up with while collaborating on the answers each week.  It helped our answers be much more thorough and accurate.

Code of Ethics for School Leaders

Unfortunately, unethical behavior is occurring more frequently in the field of education.  Given the nature of the profession, when a school district employee engages in unethical behavior, it is always a newsworthy event.  I have several family members who are district employees and/or district leaders in several schools across the country.  I interviewed many of my family members while completing this assignment.  The following come from several different large school districts in Indiana, Florida, Louisiana and Texas.

Standard 1.3   The educator shall not submit fraudulent requests for reimbursement, expenses, or pay.  One school district did not require it’s employees to submit receipts when requesting reimbursement for travel - hotels, fuel, food, etc.  As a result, many employees were inflating the cost of their meals and gas expenses.  One employee actually submitted a request for a hotel room that they never stayed in.  All employees in that district are now required to submit a receipt when requesting reimbursement and there is a cap on all meal reimbursements.

Standard 1.5  The educator shall neither accept nor offer gratuities, gifts, or favors that impair professional judgment or to obtain special advantage.  In one of the districts, a prominent community member and his wife owned several restaurants.  The wife was an employee of the school district.  The couple would provide the Superintendent with free meals any time he visited one of their restaurants.  They would also deliver food to the Superintendent for free while he was at work.  It appeared that the wife was treated differently by the Superintendent.

Standard 1.6  The educator shall not falsify records, or direct or coerce others to do so.  One Superintendent was dating a single parent in the district.  He brought the woman’s children to school one day and they were late enough to be counted absent.  He asked the attendance clerk to mark the children present for the day, which affected the district’s funding for that day.  His rationale was that the children were with him and they talked about school things while they were driving down the road, so that counted for them being at school.

Standard 2.2  The educator shall not harm others by knowingly making false statements about a colleague or the school system.  A principal in one district was unhappy with members of the School Board because he felt they were not supporting him.  The principal proceeded to complain very vocally about the Board Members in an administrative staff meeting and discussed the drinking habits of one of the board members.

Standard 2.6  The educator shall not use coercive means or promise of special treatment in order to influence professional decisions or colleagues.  A Superintendent  (#1) was pretty close friends with the Superintendent (#2) of a neighboring school district.  The Superintendent in district #1 could not hire a potential employee because her father served on the School Board and he was a big supporter of that Superintendent.  The father was planning on stepping down so his daughter could work for the district.  The other Superintendent (#2) had a teacher in his district that he knew was interviewing for a job district #1.  Superintendent #2 really needed her to leave because of the problems she was causing on the campus she worked on.  The two Superintendents made a deal to hire the teachers.  Superintendent #1 convinced the campus principal to hire the teacher causing problems and Superintendent #2 convinced the campus principal to hire the board member’s daughter.

The consequences of the above actions is that eventually people talk and most of the time everyone finds out about the unethical behavior.  It ruins your credibility with all stakeholders in the district.  The unethical decisions made can also ruin a career that took years and a significant amount of time and money (to pay for college) to establish.  

The unethical behavior regarding fraudulent reimbursements could have been prevented by requiring receipts for all reimbursements.  This measure would have prevented everyone from submitting inflated and completely false requests.  This standard and preventive action correspond to the Superintendent Competency that states, “The Superintendent knows how to model and promote the highest standard of conduct, ethical principles, and integrity in decision making, actions and behaviors.”

The unethical behavior regarding the falsifying of attendance records could be prevented by having the children’s parent bring them to school or by not making the phone call to a secretary to make the attendance changes.  This corresponds to the Superintendent Competency that states, “The Superintendent knows how to model and promote the highest standard of conduct, ethical principles, and integrity in decision making, actions, and behaviors.”  It also corresponds to, “The Superintendent knows how to apply laws, policies, and procedures in a fair and reasonable manner.”

The unethical behavior regarding the principal who bad-mouthed the board members should be addressed by the district Superintendent.  The Superintendent should meet with the principal and discuss his unethical behavior.  This corresponds to the Superintendent Competency which states, “The Superintendent knows how to interact with district staff, students, school board, and community in a professional and ethical manner.”

Financial Audits

I interviewed the Director of Finance and the Superintendent of Orangefield ISD to learn more about the Annual External Financial Audit process.  An auditor is selected by the Board of Trustees.  The Board selects independent auditors based on proposals submitted.  Mr. Welch, the Superintendent, stated that there aren’t very many local firms that still audit school districts.  When the auditor is selected, the school district can use them as long as they want without getting proposals each year.  According to Mrs. Hickman, the Director of Finance, the auditors test various aspects of finance based on samples.  Sample size would depend on the scope of work they predetermine based on information the school district provides.  The auditors come to the district during the summer for interim work and again after the close of the fiscal year.  They review the general ledger, special programs and grants.  They spend quite a bit of time with personnel from the business office.  They also select some personnel records to review along with their payroll records.  The audit reveals any areas that need to be corrected.  Mr. Welch stated that when he became Superintendent, he hired a Finance Director that was a CPA, which was a recommendation from a previous audit.  The bookkeeper and payroll clerk previously did not have much oversight because the Assistant Superintendents did not have a finance background and were not able to adequately oversee the business department.  Mrs. Hickman stated that if we receive a clean audit opinion, which we always do, it means that they have found no material problems with our procedures.  The results of the audit are shared with the Superintendent and the Director of Finance first.  Then the auditor gives a report to the Board that is in a public meeting.  The audit is sent to TEA ad the district must publish a summary of the audit in the local newspaper.

I believe that Mrs. Hickman has been a very positive addition to our staff.  She is very knowledgeable about school finance and has helped me immensely while taking this course.  Mr. Welch is also very knowledgeable in school finance and has been very helpful.

Understanding Personnel Salaries in District Budgets

I interviewed the Director of Finance and the Superintendent of Orangefield ISD to gain their insight on the issue of personnel salaries.  Both stated that our personnel budget accounts for 73% of our total budget.  We are striving to reach the 80% mark, which is the percentage in which many school districts operate.  This year, our budget was cut in almost all areas.  Because of the low percentage earmarked for personnel, this budget was not cut.  If our personnel budget was closer to 90%, there would have been very few places to cut besides personnel.

The positive impact of raising the salaries of all personnel by 5% would be that morale would increase.  The negative impact would be that the money would have to be taken from another area that has already been cut.  This would cause stakeholders to complain that funds aren’t going to educate the students as they are supposed to.  Also,  the employees at the upper end of the pay scale would receive a larger amount, while support staff who get paid a lower salary would not receive as much.  To keep from causing an imbalance between the staff, OISD pays longevity stipends in December of each year.  This stipend rewards service to the district and is not based on a percentage of a staff member’s salary. For example, a custodian or food service employee who has been with the district for 10 years receives the same amount of money as an administrator who has been with the district for 10 years.

Analyzing OISD's M&O Fund

For this assignment, I reviewed the 2009-2010 Budgeted Financial Data for Orangefield ISD on TEA's website to gather facts.  According to the data, the Maintenance and Operations Fund (M&O) source of revenue is based on several factors that include the ADA, WADA, and local tax revenue (2005-06 funding).  31.48% (or $3,600,000) of our district's M&O fund comes from local taxes, 67.18% (or $7,681,499) from state taxes, and .16% (or $18,000) from federal taxes.  The main factor in determining the M&O is ADA and student population.  The WADA is important because each student has a weight based on their "status" and this weight can increase per pupil accounted for.  Some examples of WADA allotments are special education, compensatory education, career and technical education, bilingual education and gifted and talented education.
After reviewing the 2009-2010 Budgeted Financial Data, I found that Orangefield ISD's M&O Fund for this past year was $11,369,656.  48.95% (or $5,488,499) of these funds are appropriated for instructional purposes.  Payroll expenses account for 78.52% (or $8,927,040), other operating expenses account for 20.10% (or $2,285,016) and capital outlay accounts for 1.39% (or $157,600) of the M&O.  Currently, our district is operating in the black based on revenue versus expenditures.  For 2009-2010, the district had $11,434,949 in revenue and operating costs of $11,369,656.  This is a surplus of $65,293.
The district has been growing at a consistent rate and was budgeting for an increase in students for the current school year.  In reality, we had an unplanned shortfall when our enrollment dropped by 50 students.  These figures, which were budgeted for 50 additional students, are adjusted and monitored carefully and monthly updates are reviewed by administrative personnel and shared with all district employees.  OIDS's M&O allocations and our district expenditures are closely related.  Allocations appear to be appropriate, with very few areas to watch for overspending.  There is concern among the administration about expenditures due to the decrease in student population and this concern has been shown by cutting budgets across the board.
According to the Financial Integrity Rating System of Texas (FIRST), OISD has scored a Superior Rating for seven of the past eight years, with a rating of "Above Standard Achievement" in the 2003-2004 school year.  The main areas of concern are the State of Texas' financial issues and what impact they could have on future funding, which will affect our district.