03/02/2015 – Financial Report

January 2015 Financial Report

03/02/2015 Work Session
eboard link icon  Agenda Item – Approval of Monthly Financial Report

Q:  Does this budget report reflect the mid year adjustments.
A:  No it does not.  This Report is as of Jan. 31, 2015. The next months’ report will include those adjustments made on Feb. 2, 2015.

Video and Transcript

Dr. Michael Bell (Chief Financial Officer)
This report is for the month of January going through January 31st.

Page 1
Trends are maintaining.  Still ahead of expected revenues by $37 million.  This report doesn’t include last month’s mid year adjustments.

Page 3
We are way ahead on local revenue collections and slightly ahead on state revenue.

Page 41
We are projected to be at $560 million in revenue, but we are $32.7 ahead in collections.  We are behind in expenditures.

Marshall Orson (Board Member)
Can we get an update on the DeKalb Police theft investigation?

Michael Thurmond (Superintendent)
Yes.  Our own police department is also continuing their investigation.  Mr. Smith reported that we have no additional theft.

Michael Erwin (Board Member)
Is there a comparability assessment update?

Bell
We had a meeting on the 24th with the state.

Thurmond
There were quite a few people at the meeting dealing with Title I and Special Ed.  We made significant progress resolving this issue.  Our commitment to providing education and training opportunities to the special needs kids in the least restrictive environment was the at the crux of the disparity of the imbalance as it relates to those schools that serve a high percentage of special needs kids and those that do not.

Debbie Gay leads the special needs effort at the state.  She worked in DeKalb for 30 years.  She laid the foundation and built the preeminent special needs program.  She validated that our commitment to spending and investing not just what is required, but at a level beyond that.  That set the tone to move forward in a positive way.

Erwin
Are we still set at a $2.1 million dollar fine?

Thurmond
That is still being negotiated.

Jim McMahan (School Board Vice Chair)
I want to commend the Superintendent for having the discussion with the state.  Thank you for having that tough discussion that rarely happens.

Thurmond
It was good for us.  We learned a lot.

McMahan
I was in DC having the same conversation with our elected Senators and Congressman up there.  They’re learning from us.  They don’t have all the answers but they are advocating for us on our behalf.

Stan Jester (School Board)
On page 41, instruction is roughly $4 million to $5 million under budgeted.

Bell
The year to date actual is $103 million.  The ytd projected is $197 million.  The restoration of furlough days makes it so we can’t compare very well to last year.  It does look like there will be $4 million to $5 million in unexpended funds in instruction.  I don’t know why.

Jester
Does anybody know why we might be $4 million dollars under?

Thurmond
We’ll be happy to look at it in more detail and provide a response.

Jester
If we’re going to be under, perhaps we could adjust the budget down.

At the last board meeting, you mentioned the variance reports are challenging to put together.  Do you guys regularly look at variance reports?

Bell
I don’t recall making that statement.  There are difficulties because you certain variables you have to put in for the upcoming year that will change where you were in the previous year.  We do a trend analysis and make adjustments according to variables we know are coming.

Jester
So you regularly meet and look at variance reports?

Bell
Who do you mean by you guys?

Jester
The senior administration.  Maybe weekly or every other week.

Bell
We review expenditures quarterly with all the senior cabinet members and their staff.  The variance report is built my finance.

Jester
So, these reports you look at have variances on them.

Bell
What reports are you referring to?

Jester
These reports that you were just talking about that you guys look at.

Bell
Quarterly we review expenditures.  They don’t have a real variance to it.  It’s just a straight line expenditures.

Jester
Is this common for government entities to not look at variance reports?  Most billion dollar companies look at variance reports frequently.

Thurmond
If the board would like to establish a policy on when and how we look at these reports, we would be happy to entertain that.  It’s just not something we currently do.  Dr. Bell looks at them frequently.

Bell
We review them when we build these monthly reports.

Jester
We look for you on guidance on the variance reports.  It seems like an industry standard for businesses with large budgets.

McMahan
Thank you for your questions regarding these variance reports.  Dr. Bell when did we start this variance report.

Bell
It wasn’t long after I got here.

McMahan
The variance report wasn’t even part of the financials when I got on.  We were asking for accountability with the swings and expectations.  It is incumbent on the board to look at best practices.  Once we have our organizations meeting, perhaps we can do a deep dive into finance.

Jester
I assume the board finds these variance reports as useful as I do.  Right now we have variance reports on the upper level categories.  Years ago we used to get variance reports on the sub categories.  Dr. Bell mentioned that would take a lot of work.  So, if it’s not useful to us then we shouldn’t burden the finance department with something like that, but that’s something we can talk about in our retreat.