Michigan Department of Treasury Financial and Operational Comparison

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Michigan Department of Treasury Financial and Operational Comparison Tools for School Districts Michigan. gov/OSRFA

Michigan Department of Treasury Financial and Operational Comparison Tools for School Districts Michigan. gov/OSRFA

Background - Various Degrees of Involvement Trending Toward Deficit v Early Warning q q

Background - Various Degrees of Involvement Trending Toward Deficit v Early Warning q q Projected deficit in current or following 2 fiscal years May report directly to the Department or contract with an ISD/Authorizer for local oversight v Enhanced Deficit Elimination Plans (EDEP) q q q Preliminary review – no probable financial stress Deficit districts projecting to remain in deficit for more than 5 years May require a financial recovery agreement or consultant v Financial Emergency Districts (PA 436) q q Preliminary review – probable financial stress Governor declares financial emergency exists 2

Early Warning – Identifying Potential Fiscal Stress The Department primarily uses 2 methods of

Early Warning – Identifying Potential Fiscal Stress The Department primarily uses 2 methods of identifying potential fiscal stress (that a school district is believed to incur a deficit in the current or following 2 fiscal years). v Projection Model q Uses enrollment, revenue, expenditure and the district’s current fund balance q Projects three fiscal years to identify districts that project a deficit v Budget Reviews q Transparency laws require district budgets to be posted online within 15 days of adoption q Review 900+ districts to identify districts intending to spend a majority of their funds Potential fiscal stress will not be declared without first communicating with districts to determine whether sufficient corrective action is being occurring and to account for unique circumstances. 3

Early Warning - Department Statistics Since 2015 PA 109 -114 were passed the Department

Early Warning - Department Statistics Since 2015 PA 109 -114 were passed the Department has declared potential fiscal stress exists in 27 districts. As of October 4, 2017: 11 districts are no longer subject to EW oversight v 7 have improved and are no longer subject to early warning oversight v 3 have incurred a deficit and are reporting to MDE v 1 academy was closed by its authorizer 16 remain subject to EW oversight v 8 are contracted with an ISD or authorizer for an administrative review v 8 are reporting directly to the Department 4

Deficit Districts – DEP, EDEP, and Preliminary Review MDE remains responsible for districts that

Deficit Districts – DEP, EDEP, and Preliminary Review MDE remains responsible for districts that can eliminate their deficit within five years of submitting their initial deficit elimination plan. If a deficit elimination plan is submitted to MDE that cannot eliminate the deficit in that period, oversight is transferred to the Department of Treasury. Districts with a DEP beyond five years are subject to a preliminary review. v Emergency Loan Board determines whether probable fiscal stress exists q Probable fiscal stress -> financial emergency (PA 436) q No probable fiscal stress -> EDEP reporting v 11 districts have completed a preliminary review q 3 districts eliminated their deficit and were removed from department oversight q 8 districts were found to have no probable financial stress and are subject to EDEP reporting 5

District Outreach The department is continuously developing resources to help school districts respond to

District Outreach The department is continuously developing resources to help school districts respond to financial pressures. v Historical Analysis and Projection q Use a projection model and historical data to identify downward trends q Communicate with districts and associations across the state to identify helpful information v Peer Comparison q Uses student enrollment, district type, and other indicators to identify similar districts q Based on the administrative review requirements (staffing, wages and benefits, expenditures by function, etc) v Financial Assistance q Developing a system for districts to qualify for direct financial assistance q Reimbursement amounts will be based roughly on a per-pupil basis 6

Reviewing District Financial Information 7

Reviewing District Financial Information 7

District Outreach – Peer Comparison We can set any parameters in Free and Reduced

District Outreach – Peer Comparison We can set any parameters in Free and Reduced Lunch. EX: . 05 for a district at 25% FRL would include all districts between 20 and 30% Type in any district Code, or search districts by ISD or Authorizer Similarly, we can set any enrollment percentage we choose. For most districts between 500 and 7, 000 kids, adequate peers groups can be made with only a 5% range. 8

District Outreach – Peer Comparison We see both their numbers, and then an average

District Outreach – Peer Comparison We see both their numbers, and then an average of their peers, and a listing of peers individually (to weed outliers as needed). We then break down by individual positions. This sample district has 0. 3% more students, but 25% more teachers. 9

District Outreach – Peer Comparison Able to take a deeper dive into salary So,

District Outreach – Peer Comparison Able to take a deeper dive into salary So, while this District is 25% higher in total teachers, their teachers are making roughly 83% of their peers. 10

District Outreach – Peer Comparison 11

District Outreach – Peer Comparison 11

Data Sources – Projection Model Enrollment Data: Fall Student FTE Counts (Audited, Current Year

Data Sources – Projection Model Enrollment Data: Fall Student FTE Counts (Audited, Current Year Certified) Michigan’s Center for Educational Performance and Information (CEPI), District FTE Pupil Counts, District FTE Count. Reports available: https: //www. mischooldata. org/Other/Data. Files/Student. Counts/Historical. District. Fte. Pupil. Counts. aspx Financial Data: Total General Fund Revenue, Expenditure, Fund Balance Michigan’s Center for Educational Performance and Information (CEPI), Financial Information Database. Reports available: https: //www. mischooldata. org/Other/Data. Files/Financial. Information/Historical. Financial. Reports. asp x 12

Other Data Sources (Not Exhaustive) 13

Other Data Sources (Not Exhaustive) 13

For more information: Visit our website: Michigan. gov/ORSFA Or Contact: Outreach, School Review, and

For more information: Visit our website: Michigan. gov/ORSFA Or Contact: Outreach, School Review, and Fiscal Analysis Michigan Department of Treasury [email protected] gov Michael Wrobel, Administrative Manager Jake Brower, Financial Analyst Sarah Spitzley, Student Assistant Wrobel. [email protected] gov Brower. [email protected] gov Spitzley. S [email protected] gov 14