EDUL 6022                                                                                       Pamela
Barnett

Managing and Budgeting
School Accounts

Review the scope of Georgia Law. See possible
limitations in activity 2: http://www.gsbaelaw.org  What is
your impression of this source?

This
source is a useful reference resource to stay abreast of Georgia school
law.  I found several topics that I
was interested in but I was unable to pursue the topic since I did not have the
username and password.  My
administrator was not aware of the website and had no clue as to what username
or password to use.

Focus on Chapter 15 in GSBA eLaw: http://www.gsbaelaw.org/chapter15.html
Select one of the four issues listed below. Describe and explain it in
detail with respect to Georgia Regulations and how it is applied in your
school system.

What is the major source of local funding for
public schools? (Resource—Georgia Department
of Education)

Funding
for Georgia
public schools comes from 3 sources: federal funds 7.40%; state funds 51.26%;
local funds 41.34%.  GSBA states: Local property taxes, or ad valorem taxes, are the largest
source of local funding for public school systems. These are taxes assessed
upon personal and real property by the district in which the property is
located, in the case of real property, or the district in which the individual
owner maintains a permanent legal residence in the case of personal
property.  Generally, property is
taxed at 40 percent of its fair market value, and the Constitution
of the State of Georgia
requires that “all taxation shall be uniform upon the same class of
subjects [property] within the territorial limits of the authority levying the
tax.”  Property taxes make up
the primary source of revenue for local school systems.  These funds are used for the operating
budget.  Special Purpose Local
Option Sales Tax (SPLOST) funds can be used for capital expenditures like buildings
and technology, but not for salaries and other operating expenses.  School systems may also call on voters
to approve the sale of bonds in a referendum to pay for capital expenditures or
technology.

Interview your mentor and discuss the school
(building level) budgeting process. Be sure to mention the question below:

How
will local boards compile all of the student and employee data required to
implement the accountability requirements of state and federal law?

Mr.
T’s has little input on the budgeting process and where funds are
allocated.  He is sent a spreadsheet
with amounts and categories that identify how much he can spend and where he
can spend it.  The information
required for funding is calculated using FTE (full time equivalent).  The FTE is figured based on the number
of students as well as other factors such as type of student (sped, regular ed).  Based on
FTE, funds are distributed to each school.

Describe and explain the objectives of budgeting
and general preparation and construction of a budget.  http://nces.ed.gov/pubs2004/h2r2?ch_3.asp
Chapter 3: Budgeting describes the objectives of budgeting and general
preparation and construction of a budget as:

A major
element of financial data activity rests in the act of budgeting. Budgeting is
the process of allocating finite resources to the prioritized needs of an
organization. In most cases, for a governmental entity, the budget represents
the legal authority to spend money. Adoption of a budget in the public sector
implies that a set of decisions has been made by the governing board and
administrators that culminates in matching a government's resources with the
entity's needs. As such, the budget is a product of the planning process.

The budget also provides an
important tool for the control and evaluation of sources and the uses of
resources. Using the accounting system to enact the will of the governing body,
administrators are able to execute and control activities that have been
authorized by the budget and to evaluate financial performance on the basis of
comparisons between budgeted and actual operations. Thus, the budget is
implicitly linked to financial accountability and relates directly to the
financial reporting objectives established by the GASB.

The planning and control
functions inherent to any organization, including schools, underscore the
importance of sound budgeting practices for the following reasons:

The type, quantity, and quality of goods and services provided by
governments often are not subject to the market forces of supply and
demand. Thus, enacting and adhering to the budget establishes restrictions
in the absence of a competitive market.

These goods and services provided by governments are generally
considered critical to the public interest and welfare.

The scope and diversity of operations in an organization make
comprehensive financial planning essential for good decisionmaking.

The financial planning process is critical to the expression of
citizen preferences and is the avenue for reaching consensus among
citizens, members of the governing board, and staff on the future
direction of the governmental unit's operations.

The
link between financial planning and budget preparation gives the budget
document a unique role in governmental organizations. Budgets in the public
arena are often considered the definitive policy document because an adopted
budget represents the financial plan used by a government to achieve its goals
and objectives. When a unit of government legally adopts a financial plan, the
budget has secured the approval of the majority of the governing board and
reflects

public choices about which goods and services the unit of
government will or will not provide,

the prioritization of activities in which the unit of government
will be involved,

the relative influence of various participants and interest groups
in the budget development process, and

the
governmental unit's plan for acquiring and using its resources.

In an educational
environment, budgeting is an invaluable tool for both planning and evaluation.
Budgeting provides a vehicle for translating educational goals and programs
into financial resource plans-that is, developing an instructional plan to meet
student performance goals should be directly linked to determining budgetary
allocations. The link between instructional goals and financial planning is
critical to effective budgeting and enhances the evaluation of budgetary and
educational accountability.

Performance evaluation
allows citizens and taxpayers to hold policymakers and administrators in
governmental organizations accountable for their actions. Because
accountability to citizens often is stated explicitly in state laws and state
constitutions, it is a cornerstone of budgeting and financial reporting. GASB
recognizes the importance of accountability with the following objectives in
GASB Concepts Statement 1, Objectives of Financial Reporting, paragraph 77.

Financial reporting should provide information to determine whether
current-year revenues were sufficient to pay for current-year services.

Financial reporting should demonstrate whether resources were
obtained and used in accordance with the entity's legally adopted budget.
It should also demonstrate compliance with other finance-related legal or
contractual requirements.

Financial reporting should provide information to assist users in
assessing the service efforts, costs, and accomplishments of the
governmental entity.

Meeting
these objectives requires budget preparation that is based on several concepts
recognizing accountability. Accountability is often established by
incorporating these objectives into legal mandates that require state and local
public sector budgets to

be balanced so that current revenues are sufficient to pay for
current services;

be prepared in accordance with all applicable federal, state, and
local laws; and

provide a basis for the evaluation of a government's service efforts,
costs, and accomplishments.

Although
some form of a balanced budget requirement is generally necessary to ensure
long-term fiscal health in any organization, variations such as the use of fund
balance reserves to pay for current services may be appropriate over a short
period. Generally, however, all departures from this fundamental objective must
be in accordance with applicable state and local laws and policies.

Given the importance of
demonstrating compliance with the approved budget, the financial reporting
system must control the use of financial resources and ensure that budgetary
appropriations and allocations are not exceeded. To demonstrate compliance,
accounting systems are usually operated on the same basis of accounting used to
prepare the approved budget. Thus, the actual financial information captured by
the accounting system is in a form comparable to the approved budget. Through
budgetary integration, the financial accounting system becomes the primary tool
to prove financial accountability.

Finally, the budget is
evaluated for its effectiveness in attaining the organization's stated goals
and objectives. Evaluation typically involves an examination of how funds were
expended, the outcomes that resulted from the expenditure of funds, and the
degree to which these outcomes achieved the stated objectives. This phase is
fundamental in developing the subsequent year's budgetary allocations. In
effect, budget preparation not only is an annual exercise to determine the
allocation of funds, but also is part of a continuous cycle of planning and
evaluation to achieve the stated goals and objectives of the organization.

What are two common methods of Accounting
according to the resources provided for this course? Which one is the most
likely to be of interest to a school principal? Why?

The two common methods of accounting are modified
accrual and accrual basis accounting.
These two methods differ only in the timing of when transactions are
credited or debited to the accounts.
The accrual method recognizes monies during the accounting period in
which they are earned whether available or not at the time.  The modified accrual basis of accounting
only denotes funds currently available during that particular accounting
period.  Principals would prefer the
accrual method so that they could “use the money” to purchase
needed material and services before the funds are actually received in their
accounts.

Go to http://techservices.doe.k12.ga.us/admin
and click on Financial Review, then Miscellaneous Procedures. Follow one
of the links and obtain information about it from your mentor or some other
school official.

Accounting
for Principal’s Accounts discusses Governmental and Student funds.  Mr. T explained how student funds are
kept and how they must be spent on the activity/club that raised the funds.   The bookkeeper explained the
student funds that are currently at our school and went over the summaries for
each organization.

Complete a self-evaluation based on what you
accomplished through the required activities, objectives, readings
provides in the links and Practicum activities. Score your achievement
based on the Levels of Performance noted in the section “From Theory
to Practice” in course readings.

This
self-evaluation was the easiest I have completed since I recognize my
weaknesses in this area.  I am at
the developing level even though I have tried to provide evidence of a higher
level.  I know that I had to
struggle to produce at this level and have targeted this area to devote time
and efforts to improve my ability to perform at a higher level.