Agenda and Notes - September 13, 2018

State College Area School District

OUR MISSION:  To prepare students for lifelong success through excellence in education.

September 13, 2018, Board Finance and Audit Committee Meeting
11:45 a.m. - Meeting Room C, Panorama Village Building
240 Villa Crest Drive
State College, PA  16801

Agenda

  1.      Call to Order

  2.      Fiscal Year 2017-2018 Preliminary Results (attachment)

  3.      Budget development process - review 2018-2019 process (attachment)

  4.      Approval Process for Contracts and Vendors
      
  5.      Future Meeting Agenda Items
         •Budget Development 2019-2020
         •Capital Expenses/Financing

  6.      Public Comment

  7.      Adjournment

     

    NOTES

     

    September 13, 2018 Board Finance and Audit Committee Meeting Notes
    Panorama Village Administrative Center                                                         
    Meeting Room C - 11:45 a.m.                                                 
    240 Villa Crest Drive 
    State College, PA  16801

     

    I.        Call to Order
    Mr. Fozard began the Board Finance and Audit Committee meeting at 11:46 a.m. and turned the meeting over to Mr. Brown to begin the Fiscal Year 2017-2018 preliminary results.

    Present
    Committee Members:​  Amber Concepcion, Dan Duffy, Scott Fozard, Laurel Zydney
    Others:​  Randy Brown, Mary Jenn Dorman, Bob O’Donnell, Donna Reinhardt, Donna Watson

     A copy of all materials distributed to board members for discussion is included with the official notes, unless otherwise indicated.

    II.       Fiscal Year 2017-2018 Preliminary Results
    Mr. Brown noted he, Ms. Watson and Ms. Reinhardt will review information that is still preliminary, and a final analysis will be presented at later date. The auditors started last week at our request, a little later so that we would be further along and they are aware of Act 1 deadlines. Ms. Watson reported they are still doing field work, prepared comparison to projected for 2017-2018, and revenue variance is $1,878,324 with expense variance being $1,754,611. The revenue less expense leaves an ending unassigned Fund Balance of $123,713 more than projected. Ms. Watson noted $1.6 million was from the local side more than projected and reviewed and explained each item. Based on comments from a committee member regarding moving numbers around for possible assumptions, Ms. Watson explained they look at a full four-year period and see money in “buckets.” There is value in looking at averages. For the State Revenue, many different components are there and the 2016-2017 expense reimbursement is in the amount. It was also explained the Access Funds, under Federal, are received late in the year so this would be fairly flat.

    The expenses, each actual and projected, were reviewed with the variance and explanations were given for those hard to project. Mr. Brown noted the proposed increase in the transfer to capital reserve is related to positive revenue and expense variances compared to projection. The increase in this transfer decreases unrestricted fund balance to stay within the state maximum 8% of expenses. Committee members and Mr. Brown discussed the use of PSERS Fund Balance currently $3.8 million, use down or deplete and be done, any excess could be put in Capital Reserve, and not doing now but could do later. This will be presented at the September 24 meeting with the full Board. It was suggested to include some graphic percentage where we landed this year, provide clarification for Original Budget - the Final Budget approved in June and most informative for the coming year, Actual Budget is the received/spent, amendments are not carried over--this in a footnote would be fine and could include the date.

     

    III.      Budget Development Process - Review 2018-2019 Process 
    Mr. Brown provided the budget calendar that provides steps and deadlines for the budget process under the Act 1 timeframe. He reviewed information on the matrix provided to identify a cycle to analyze the components of the budget by annual, two-year and other. He explained the goal to annually look at the vast majority of the budget composition without analyzing  each component in order to provide the highest level of certainty on the budget process. He noted the Special Program changed to Special Education and also includes gifted, which is up this year. Committee members discussed which were due this year, the salaries and including substitutes, athletics and extracurricular and what are we spending money on, understand how things are budgeted and have a better sense for decisions made. The two-year rotation could be two or three, gives flexibility to pick and choose things, salary and benefits being two-thirds of the budget, might need to circle back after looking at Board goals, put dollar level of budget and percentage in the schedule, and on the rotational basis, looking at 90% of the budget. Could consider doing big items year one and two and five, small items in year three. Mr. Brown will bring this to full Board at the next meeting. It was noted we are still in transition year with projects. Spoke on the new projects and once established, could work on an equipment replacement schedule, not this or next year but maybe the third year. Ms. Watson explained they were waiting for PDE for reporting requirements, reporting - annual filing in October and next year - report costs by location and does not know what this will look like. She gave examples of each building having its own budget, code to location and cost allocations and does not know exactly how the cost allocations will be done.

    IV.       Approval Process for Contracts and Vendors
    Mr. Fozard asked if there are other things already approved in the normal line of business, should have contract approval process, and can “tweek” process for different set of circumstances. Things that need addressed: 1) Definition of Contract, 2) Limits of Authority, 3) Definition of Services, and 4) Term of Something Not Locked In. Need to know the information that needs clarification, way things are defined, some are defined in School Code, and then bring back to this committee. Ms. Zydney requested to be present for the initial conversation. Committee member suggested a process to link services to budget, the dollars to it, not everything needs to go into a contract, the set of vendors, define the services and range of dollars, then meet up to see what expenses have been. Can do every six months.

    Ms. Concepcion and Ms. Zydney left the meeting at 1:06 p.m.

    V.        Future Meeting Agenda Items

    • Add Approval Process for Contracts and Vendors - it is not about approval but process for matrix for limits of authority. Very little needs to change just have all on board. Should have something for limits of authority and can send suggestions to Mr. Fozard.
    • Budget Development 2019-2020 - Have row and columns

    VI.       Public Comment
    There was no public comment.

     

    VII.      Adjournment
    Mr. Fozard ended the Finance and Audit Committee meeting at 1:10 p.m.

     

    Submitted by,



    Mary Jenn Dorman 
    Board Secretary