Agenda and Notes - October 11, 2018

State College Area School District

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

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


Agenda

I.    Call to Order

II.   Fiscal Year 2017-2018 Management Discussion and Analysis (attachment)

III.  Contracts/Purchases Policy Discussion (attachment)

IV.   Budget development 2019-2020 process (attachment)

V.    Board Dashboard for Finance - discussion

VI.   Future Meeting Agenda Items

    • Budget Development 2019-2020
    • Capital Expenses/Financing
    • Board Dashboard for Finance
    • Contracts/Purchases Policy

VII.  Public Comment

VIII. Adjournment


NOTES

 

October 11, 2018 Board Finance and Audit Committee Meeting Notes                     
Panorama Village Administrative Center             
Meeting Room A - 11:30 a.m.
240 Villa Crest Drive
State College, PA  16801

Present
Committee Members:
 Amber Concepcion, Dan Duffy, Scott Fozard, Laurel Zydney,
Others:  Randy Brown,  Bob O’Donnell (arrived 12:12pm), Nancy Reese, Donna Watson

A copy of all materials distributed to the committee members for discussion are included with the official minutes, unless otherwise indicated.

I.       Call to Order
Mr. Fozard called the meeting to order at 12:04 p.m. and turned the meeting over to Mr. Brown and Ms. Watson to lead the discussion.

II.      Fiscal Year 2017-2018 Management Discussion and Analysis
Mr. Brown stated the Management Discussion and Analysis (MD&A) is in draft form and still under review by Baker Tilly, and stated it is near completion. Ms. Watson gave highlights stating the MD&A will be included in the Audited Financial Statement and will be reviewed at the October 22 board meeting.  The Audited Financial Statement will be reviewed at the November 26 board meeting with action on December 3. Ms. Watson noted that nothing in the format had been changed. The one item for this year is a new requirement from the Governmental Accounting Standards Board (GASB) in relation to the pension liability. Ms. Watson directed the committee to page 10; the financial statement include two different formats of statements; internal format, a modified cash basis; accrual based statement, more in the way we look at public companies that include fixed assets, debt.  The major item is the pension liability amount. This year in addition to the pension liability, according to GASB 75, we need to include the other postemployment benefits, primarily health insurance that is offered to PSERS employees and their spouses. This year we are showing the total net position, column 1; GASB 45, 68 and 75 pension and OPEB Impact, column 2; total excluding GASB 45, 68, and 75 impact, column 3; and unrestricted net position excluding GASB 45, 68, and 75 Impact, column 4. All other information is consistent with prior year reporting. It was noted this GASB 75 requirement is for all government agencies; there has been no change in our approach, operation, or spending; only in reporting of this information.  Baker Tilly is currently in the review process and John Taylor has signed off on the report.

III.    Contracts/Purchases Policy Discussion
As a follow-up to a previous committee discussion, a summary of the PA School Code requirements and district policies was given to the committee.  Attachments of Charts A & B showing the requirements for quotes and bidding that follow school code policies were discussed. The intent of the charts is to give guidelines and to make the process efficient, not to change the board approval process on contracts.  These charts will be standard practice for all contracts and purchases. Mr. Brown will continue work on the charts and they will be revisited at a future meeting, before going to the full board for approval.

I.       Budget Development 2019-2020
Mr. Brown stated, as discussed in the last committee meeting, administration would like to look at multi-year budgeting; especially with capital financing implications for out-years. The finance team proposes, as has been utilized in previous years but not recently, instead of looking at the budget in-depth in November or December, moving towards board work sessions in March and April.  This would give the quantity of time needed to devote to budget development, allow the finance team to work through the normal budget process, and have more constructive board and committee meetings.

Mr. Brown stated he wasn’t looking for any significant changes in the budget process this year, as occurred in the previous year, allowing for more complete analysis of the budget in a more complete format. Items that need to be carved out earlier will be addressed in committee and board meetings as they occur.  Analysis of certain budget components focused on a historical view remains an option. When referring to an annual and rotational review, it is really not a budget process, but an operational expenditure process. We are not reviewing from a standpoint of the budget, we are reviewing where we are spending our money.  Historically speaking, how did we spend money in this area and do we need to make changes. We could make changes in the coming year as part of the budget, or make the changes by shifting our resources. Items that would make a significant impact to the budget would continue to be discussed early in the budget development process.  Analysis for these items should be done in deep dives early in the process, in order to have the budget accurate. It was also noted that when we are talking about the budget approval process, the board is approving at the budget approval level, if more detail is needed, it should be added as an addendum. It was decided that this approach will be used for the next few presentations to determine if this approach is acceptable to the board.

V.      Board Dashboard for Finance – discussion
Mr. Brown asked for questions and ideas on what the board would find useful on the dashboard. Mr. Brown and Dr. O’Donnell will take this back to cabinet and review the ideas and bring their suggestions back to the committee.

VI.     Future Meeting Agenda Items

  • Budget Development 2019-2020
  • Capital Expense/Financing
  • Board Dashboard for Finance
  • Contracts/Purchases Policy

VII.    Public Comment
No public comment was given.

VIII.    Adjournment
Mr. Fozard adjourned the Board Finance and Audit Committee meeting at 1:32 p.m.

 Submitted by,


Nancy Reese
Acting Board Secretary