Board Financial Oversight Governing Board Online Training Module

General financial responsibilities • Responsibilities of financial oversight and monitoring of school’s finances • School’s finances include: • • • Budget development and management Accounting system development and management Financial reporting Safeguarding of assets Audits

Oversight vs. Management • The board as a whole provides financial oversight – usually through the Board Treasurer • School administration, typically defined as the principal and other lead management, is responsible for managing finances – usually through the Business Administrator

Board Treasurer and Business Administrator Responsibilities • Budget Development / Management • Board Treasurer – Work with Business Administrator to develop budget timelines; verify timelines are being followed; review budget status through regular financial reporting; assure that budget is aligned with strategic goals. • Business Administrator – Prepare, present, and execute the budget in alignment with established timelines and strategic goals.

Board Treasurer and Business Administrator Responsibilities • Accounting System Development / Management • Board Treasurer – Assure that financial controls are in place; periodically review to make sure financial controls are being followed; assure that accounting system is meeting school’s needs. • Business Administrator – Design and implement financial controls; manage accounting system and execute financial policies and procedure.

Board Treasurer and Business Administrator Responsibilities • Financial Reporting • Board Treasurer – Review and understand regular financial reports; monitor financial reports to track progress of school; ask questions of management to clarify financial activity. • Business Administrator – Prepare regular financial reports; Reconcile accounting system regularly to ensure accuracy of financial reports; Present financial reports to Board Treasurer and others as needed; Submit all required financial reports complete, on-time, and accurate to authorizer, lender, and other required parties.

Board Treasurer and Business Administrator Responsibilities • Safeguarding of Assets • Board Treasurer – Verify that the school has proper insurance coverage in place; ensure that proper financial controls and security measures for building assets are in place. • Business Administrator – Work with vendor(s) to execute proper insurance coverages are in place for the school; execute proper financial controls and implement appropriate security measures for building assets.

Board Treasurer and Business Administrator Responsibilities • Audit • Board Treasurer – Review annual audit report and compare to regular financial statements prepared by Business Administrator; read management letter and any recommendations in audit. • Business Administrator – Prepare for audit; coordinate audit and work with auditors while on-site; present audit report to the board; implement any recommendations and correct concerns from audit.

Budget Development / Management • Development • Understand sources of funding • Understand expenditures • Tie expenditure decisions to school goals • Monitoring • Regular budget vs. actual reporting • Regular update on changes to budget projections • Long-Range Planning • Plan for increasing financial health • Tie revenue and expenditure projections goals to school

Accounting System Development / Management • • • Cash management Purchasing Accounts payable Human resources Buildings operation / contract oversight Payroll • Payroll taxes • Benefits • PERA

Accounting System Development / Management • Internal controls • Segregation of duties

Financial Reporting • Management reporting • • Balance sheet Statement of revenues and expenditures vs. budget Statement of cash flows Other • Regulatory reporting • • USBE reporting FASB (Financial Accounting Standards Board) TABOR Grant reporting / Bondholder reporting / Other reporting

Safeguarding of Assets • • Proper recording and tracking of assets Maintenance of adequate insurance Security of cash on hand Security of records on hand

Audit • Annual audit required • Contract with independent CPA firm • Review annual audit report and compare with regular financial management reports • Read management letter with audit report

Source of Financial Information at Your School • Contract with authorizer • All annual financial reports, journals, ledgers, vendor ledgers, and audits • All monthly financial reports, journals, ledgers, and backup • Bond financing documents • Bylaws • Vendor contracts

Other School-Related Entities • • School Foundation School facility corporation Parent/teacher organizations Educational Service Providers (ESPs)