Fiscal Governance Structure a first look at possibilities...May 09, 2013 · fiscal governance conversation in recorded history. 2. Consider extending an invitation to the superintendent

Fiscal Governance Structure

a first look at possibilities

Erin Cranor May 9, 2013

Reference 6.01 Page 1 of 31

Basic Questions to Ask Ourselves

• Will our strategic leadership improve with better fiscal governance?

• Is excellent fiscal governance possible within our existing governance model?

• Is excellent fiscal governance possible using structures already in existence in the organization?

• If the answers to all of the above are “Yes,” then how do we connect these dots?



Objectives of this discussion:

1. Enjoy the most fun and exciting fiscal governance conversation in recorded history.

2. Consider extending an invitation to the superintendent to put forward one of the structures listed herein (or another of his choosing), to become an EL appendix, for a trial run.



GP-2: GOVERNING STYLE

Govern lawfully with an emphasis on strategic leadership on behalf of students.

The Board, not staff, will be responsible for excellence in governing.



Analogy: Strategies for Great Health

• Hazelnut• Skim Milk• Cocoa



What we get with the wrong questions:

Q: How does this comply with my health standards?

A: Hazelnuts contain flavonoids thought to support brain health, improve circulation and control allergic reactions. Hazelnuts also contain healthy fats that are good for the heart, and B vitamins. Skim milk contains calcium and Vitamin D. Cocoa contains antioxidants that may prevent heart disease.



What we get with structure:

INGREDIENTS: SUGAR, PALM OIL, HAZELNUTS, COCOA, SKIM MILK, REDUCED MINERALS WHEY (MILK), LECITHIN AS EMULSIFIER (SOY), VANILLIN: AN ARTIFICIAL FLAVOR

Amount per 2 TBSP ServingTotal Fat 12 gSaturated Fat 4 g 20% of total Daily ValueFiber 1 gSugars 21 gProtein 2 g



Ever wonder why the structure side doesn’t face the aisle?



FACT: Fiscal governance structure is boring.

AND

FACT: Excellent fiscal governance and excellent strategic leadership go hand‐in‐hand.



Strategic leadership?

• Questions asked after the moment of decision for staff and at the moment of decision for the board?

• Questions asked with special care not to micromanage?

• Questions asked with care not to cause staff to have to do too much work to get the information?

• Strategic team development of priorities.• Clear, ongoing responsiveness to changing student needs.

• Strategic structures in place in time to filter all decisions according to agreed‐upon priorities.



Connecting the Dots• Dot 1: Policy language suited for strategic leadership. We already have it, thanks to the assistance of our Audit Advisory Committee last year.

• Dot 2: Structures that can be used for more frequent than annual monitoring

We already have them, some in use now, some in the works, thanks to CCSD’s fiscal team.

The invitation we might agree to extend today is to try one possible way of connecting these two dots.



Next few slides: Examples of the “Dots” already in place

EXISTING POLICY LANGUAGE

EXISTING* STRUCTURES

* STRUCTURES THAT ARE IN USE NOW, ARE UNDER DEVELOPMENT, AND/OR HAVE BEENUTILIZED SOMETIME OVER THE PAST 28 MONTHS.



EL‐4: TREATMENT OF STAFF

“conditions, which are inequitable … disorganized or unclear”



EL‐5: FINANCIAL PLANNING/BUDGETING

“disclosure of planning assumption”

“alignment of said spending levels … with fiscal priorities”

“detailing … progress toward… publicly stated fiscal priorities”



EL‐6: FINANCIAL CONDITION AND ACTIVITIES

“notify the Board in a timely manner when functional level expenditures exceed budgeted

appropriations”



EL‐8: ASSET PROTECTION

“any amount for which funding has not been included in the budget without specific

Board approval”



EL‐9: COMPENSATION AND BENEFITS

“jeopardy to fiscal integrity or to public image”



Quiz

1. Show me.2. Where’s the proof?3. Listen to this anecdote. [Anecdote is shared.]

Can you validate or disprove it? 4. How effectively is the Board directing,

controlling, and inspiring the organization?5. How compliant is the organization with the

Board’s broad written policies, right now?



Fiscal Governance Structure Example

NUMBERED PRIORITIES

One budget cycle, budget priorities were published in numerical order in context of current conditions. The superintendent committed to the priority order both as it applied to budget cuts and, in the reverse of the same order, to allocation of revenue increases.

Changes to budgeting priorities were, for a time, publicly disclosed, discussed and developed in consultation with the Board.

Development of one version of the FY 12 budget (the FY 12 final budget) may have been in complete alignment with publicly stated priorities.




MONTHLY RECAP

A recap of budget transfers by functional area for each fund is provided to the Board monthly instead of annually.

Currently the monthly recap is provided only by functional area, not by personnel allocation.

Currently, few or no explanations for transfers are reported in the monthly recap.




OPEN BOOK

Early versions of Open Book, CCSD’s online budget transparency tool, have already been launched.

Open Book continues to be developed and refined, using community input and feedback.

CCSD’s deputy CFO has been invited to present details of Open Book nationally.




PERSONNEL ALLOCATION

The Interim Superintendent has accelerated a project, now near completion, to account for strategic allocation of personnel.

CCSD human resources information is housed on an outdated server with few functional automated query capabilities.

An automated accounting procedure for personnel assignment type may soon be available.




ALLOCATIONS TO SCHOOLS

Budget department staff will evaluate the feasibility of allocating school appropriations based on unit or cost center rather than by budget line item.

Some schools already operate on a more modern allocation process known as the “flex budget.”

This project is being undertaken in response to an internal audit that found budget line items under or over utilized in most cases, and that found some account rate formulas outdated and / or irrelevant in today’s environment.




POSITION BUDGETING PROCESS FLOW

A process flow for position budgeting exists on paper.

Currently, the written process flow does not include formal consideration of impact on student achievement.

Currently, the written process flow does not include formal weighing of the potential student achievement impact of the position to be filled against the potential student achievement impact of other positions that remain unfilled (e.g., class size, ELL facilitator)



Quiz

1. How many of the structures currently exist and/or are fully functional?

2. How do you access the information provided via the structures that are functioning right now?

3. Are you equipped with the fiscal information needed for strategic leadership?

4. How (and how quickly) will you / the taxpayer / legislators find out if any structures go away?



Structure: Ongoing Oversight Mechanism versus

Non‐Structure: Annual Monitoring

• The CCSD Budget and the CCSD Comprehensive Annual Financial Report (CAFR) are not cross‐comparable.

• Non‐compliance can be more invisible over a year than over a monthly or semi‐monthly span.

• Shorter/ongoing monitoring periods bring some of the same governance advantages as smaller school districts.



Example 1: Fiscal Governance Structure Advantage

“It should be noted that the estimated $50,000 cost … represents only 0.002% of the District’s general operating fund budget. It is the equivalent of a person with a $50,000 salary looking for $1.”

$1,923.08 paycheck

$137.36 per day

What is my investment objective?

What am I willing to risk?

“Start investing with just $1 a day,” by Jeff Reeves. MSN Money Online, money.msn.com, August 23, 2012.



Example 2: Fiscal Governance Structure Advantage

“It should be noted that the estimated $50,000 cost … represents only 0.002% of the District’s general operating fund budget. It is the equivalent of a person with a $50,000 salary looking for $1.”

Average personnel cost of one teaching position is only 0.003%

That teacher might also be a coach or an adviser, or just “the one.”

What is my objective?

What am I willing to risk?



Bottom Line:

Strategic Leadership



How?One possible way to consider:

1. Ideas come forward from just about anywhere: Audit Advisory Committee, Superintendent, staff, members of the public, members of the Board, legislators.

2. If the Superintendent or a Board member sees potential in the idea, an agenda item can be requested to consider the idea all together.

3. Board and Superintendent openly consider the proposed structure together. We weigh its potential value to strategic leadership. We examine its potential cost in dollars and/or personnel time.

4. If the structure is adopted, it can become an appendix to an applicable governance policy or executive limitation policy.The policy on ccsd.net includes a link any online mechanism or report (e.g., Open Book) so Trustees, parents, students staff, community leaders, legislators, and all taxpayers have instant access to the fiscal governance structure.

5. Structures can be amended, further developed, and/or deleted according to dynamic strategic needs, via our normal process.



Questions?



Fiscal Governance Structure a first look at possibilities...May 09, 2013 · fiscal governance conversation in recorded history. 2. Consider extending an invitation to the superintendent

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