Week 5 Final Relections on School Finance

     School finance is such a large and important component of public education that it is extremely important for school administrative leaders to have a thorough understanding of the entire system.  Effective management and leadership of a school district revolve around school finance.  Investigating and completing many of the activities and assignments throughout this course has helped me understand the magnitude of what our school finance system entails.  Examining the Competency 8 at the beginning and end of this course, listening to the lectures, interviewing school leaders, reading the materials and resources to complete the assignments have help to learn more about how the overall process of school finance affects our public educational system.  The activities involving the group wiki and blogs have also helped to develop contacts and view insights from other prospective school leaders.

      The ability to compare our pre and post self-assessment on Competency 8 show areas of definite growth and areas that I need more exposure and investigation. I went from 1 to 3 indicators as strengths, 6 to 7 indicators as competent, and 4 to 1 indicator as an area needing improvement.  The overall improvement in competency 8 is a result of what I have learned throughout this course.  I will continue to learn more about our school finance system and will pay particular attention on how to facilitate and evaluate effective account auditing and monitoring that comply with legal requirements and local district policy.

     The lectures, interviews, readings, and resources have provided valuable information to help in understanding the complexities of our school finance system.  The insight provided by our professors from their experiences operating a school district provided a real and practical view of how district operate.  The acquisition of knowledge and a greater understanding of school finances will continue as we become more involved in the school budgeting process for our campuses and districts.  The ability to see more of the greater picture of the broad reaching affects of how revenue is created and where expenditures occur will help to evaluate all of our financial procedures and there effects on the education of our students.

     I have enjoyed the ability to read other students reflections and group experiences through the wiki and blogs.  It is comforting to realize that many districts are facing the same difficult issues in Texas.  At times it was difficult to get organized with my particular group due to our different positions in our respective districts.  The overall experience and networking was very beneficial throughout this course.  I found the ethical violations to be very interesting and made me think of how I would react in similar situations.

    Although there is a lot more I need to learn about school finance, I now have the ability to ask questions and collaborate with others in finding answers.  I feel much more confident in my own ability to develop my campus budget to get the most out of our limited available funding.    

Code of Ethics for School Leaders

     Actively being involved in public education we are able to identify many examples of ethical violations in which educators have violated the Educators Code of Ethics.  Following are several ethical conflicts that have occurred in public education that has negatively impacted the reputation of public schools and educators.  Standard 1.2, states that the educator shall not knowingly misappropriate, divert, or use monies, personnel, property, or equipment committed to his or her charge for personal gain or advantage.  A school administrator used a district’s food service department personnel, equipment, and vehicles to cater a party at his or her home is an example that violates Standard 1.2.  Standard 1.10, states that the educator shall be of good moral character and be worthy to instruct or supervise the youth of this state.  An administrator having and affair with another district employee while stilled married to his/her spouse that is also a district employee shows a definite moral character flaw.  Standard 1.12, states the educator shall refrain from the illegal use or distribution of controlled substances and/or abuse of prescription drugs and toxic inhalants.  For this example a new educator the profession is taking pills while on campus in his or her room and becoming under the influence during the school day is an abuse of a controlled substance for this district.  Standard 2.2, states the educator shall not harm others by knowingly making false statements about a colleague or the school system.  This example has an educator spreading erroneous information about an administrator thus damaging the reputation of the administrator and the district.  Standard 2.5, states the educator shall not discriminate against or coerce a colleague on the basis of race, color, religion, national origin, age, gender, disability, family status, or sexual orientation.  For the final example, a person less qualified is promoted above another person more qualified solely based on race.  These examples show that people make many mistakes in judgment and ethical conduct that negatively impacts the public education profession.  The examples cited have an adverse impact on financial issues affecting school districts.

     Examining three of the examples from above of ethical conflicts, short and long-range consequences should be considered for these types of violations.  For the Standard 1.2, short-range consequences should address the reimbursement of all costs involving the use of school property and personnel by the administrator.  Disciplinary actions should be taken to document the violation and a report of the violation may be sent to the State Board for Educator Certification for them to investigate and place possible restrictions on the administrator’s certification.  Long-range consequences are the loss of public support for the school district and administrators and a lack of confidence in district personnel.  The loss of support and confidence may carry over into district personnel.  The school board of trustees may lose confidence and respect in the district administrative personnel, ultimately causing them to lose employment if actions of this nature continue.  The incident involving the administrator having the affair while still married has many short-range consequences for violating Standard 1.10.  The direct embarrassment for the district as a result of the exposure of the administrator’s actions and the questioning and scrutiny of all employees by the public and stakeholders will be severe.  The moral character of the administrator will be questioned and the effectiveness of the administrator’s ability to lead the campus is jeopardized in the long-range.  Again a long-range impact will be the loss of public support in the administrator.  The consideration that the administrator showed lack of moral character will lead the public to question the ability to operate the campus without adversely impacting the financial issues on the campus.  The question if quality teachers want to work in a district or on a campus for administrators with severe character flaws will surface and need to be considered for the adverse affect on personnel.  Finally the teacher violating Standard 1.12 by using pills during the instructional day directly impacts students and parents.  The short-range immediate consequences are the reporting if such violation to SBEC and the superintendent resulting in the removal of the teacher.  The long-range impact on students on what they perceive to be acceptable behavior by educators will be affected.  The ability to find a highly qualified teacher to replace the one removed will be negatively affected.  The loss of the teacher’s certification and the resulting police involvement with the teacher, also have long-range implications.

     All superintendents should know how to act with the greatest of integrity, fairness, and in an ethical manner to promote the success of all students.  Preventive actions may help to avoid many ethical conduct violations.  Check and balances should be in place to help prevent educators from taking advantage of their position and overstepping of their authority.  The Texas Administrative Code, Educator’s Code of Ethics and school district policies are in place to provide guidance for administrative leaders.  For the examples from above all school educators should be above reproach when dealing with ethical behavior.  Unfortunately, many fail to live up to all of the expectations of students, parents, staff members, and stakeholders.  They have lapses in judgments that create problems for districts and the public’s perception of our educational system.  The action plan for Standard 1.2 involves each administrator modeling and promoting the highest standards of conduct and ethical integrity in all decision-making processes.  They must follow all district policies and demonstrate a total understanding of the behavior expected of district administrators.  The action plan for Standard 1.10 should include moral character and the ability of the administrator to interact appropriately with all district personnel in professional and ethical manners.  The administrator’s actions should always demonstrate behaviors that support the highest standards for educator behavior.  Finally for Standard 1.12, the action plan should incorporate the use of law enforcement and drug testing for employees.  It is very important that administrators protect all students from possible harm from district employees.  The students should be protected from both physical and emotional harm that could result from unethical behavior of educators.  Having educators know the negative consequences that will occur for these types of infractions may deter them from acting in unethically in all areas of the Educators Code of Ethics. 

Annual External Financial Audits

     We are fortunate to have a veteran business manager in my district.  The business manager was very helpful in answering several questions about financial audits for our district.  We start to accept bids every three years for an external auditor.  The majority of the time one is selected based primarily on price but knowledge, experience and reputation also have an impact on the selection decision.  The audit is conducted after the end of the year by examining our records and testing our data by taking a sampling of our financial practices.  Each year as a result of the audit we have received an “Unqualified Opinion”, which according to our business manager is the best rating you may receive from the audit.  This opinion indicates that our district is following proper procedures and record keeping practices.  The auditors present their finding at a board meeting to inform the school board members and stakeholders of our financial rating.  It is nice to know that our district dose not have any issues with the way we conduct our financial business.  
 

Understanding Personnel Salaries in District Budgeting

     Upon reviewing and analyzing the 2010-2011 budget for the Port Neches-Groves Independent School District the total personnel salaries equal $28,766,764, which is 81.6% of the district’s total budget.  This percentage is comparable to the state personnel salary percentage.  The total staff for PNGISD is 627 employees of which 55% or 342 are teachers.  As a result of the majority of the school district’s budget being used for salaries it is clear why school superintendents and school board members pay special attention to personnel recommendations.  For a school district to significantly impact an effective change in their annual budget personnel salaries must be critically examined.  I believe most people would be surprised that the overall percentage of a district’s budget is allocated for personnel salaries.  It is also worthy to note that in many communities the school district is the largest employer. 

     The impact of a 5% salary increase for all personnel has many possible affects for a school district.  Beginning with the positive aspects of a raise, several things come to mind.  Everyone would like to think they are doing a quality job and are gaining new skills that greatly impact student’s education.  A salary increase would have a positive affect on individuals by providing to them additional self worth and appreciation for a job well done.  It would certainly increase the appreciation, popularity and support for the team of eight from the employees of the school district.  Higher salaries would help to retain and attract the best teachers by keeping the district competitive with neighboring school districts.  Another positive impact results from a perception from stakeholders and outside communities that things in the district are progressing favorably when we are facing many difficult decisions ahead with the current financial position our state is in regarding school finance.

     Unfortunately there seems to be more possible negative impacts and questions needing resolution when determining if a school district is giving their employees a 5% salary increase.  For my school district we have 62% of teachers with eleven or more years of experience and of that half of them have over twenty plus years of experience.  For a district with a veteran staff trying to give a 5% raise, it will be significantly more expensive than a district with a less experienced staff.  Questions such as will the raise require a tax increase, reduce the fund balance, reduce/remove established educational programs, or create an undesirable affect on the district are some of the questions needing to be answered before the raise is initiated.  In most cases the answers are going to have or cause negative reactions regarding the operation of a school district.  Another potential negative impact is how are the stakeholders going to react to this type of raise.  What is the financial state and climate of the community is another area that must be examined before a raise is implemented.  One of the most negative aspects that could result in giving a 5% raise would be the need to reduce the overall budget resulting in the possibility of having to reduce staff, which means people would lose their jobs.  This also negatively impacts the entire image of a school district. 

     The main question regarding an across the board salary increase is how is it going to impact the overall operation of the school district.  Is the raise something the district can afford and is it something the community and all stakeholders will support?  With the state and each school district facing many financial challenges for the next few years all areas both positive and negative must be thoroughly investigated when determining whether or not a school district can provide a 5% salary increase for all personnel.  A raise would be great but is it practical and can the district really afford it?  

Reviewing and Analyzing My District's M&O Fund

According to the Texas Education Agency Office of School Finance, School Funding 101: Funding of Texas Public Schools, January 2011, funding for Texas’s public schools comes form three main sources: local school district property taxes, state funds, and federal funds.  Schools are funded mainly by local property taxes and state funds administered through the state’s Foundation School Program (FSP).  The FSP is revenue in the state budget earmarked for public schools in Texas.  This revenue comes from tax collections transferred from other state accounts.  The FSP establishes the amount of state and local funding due to school districts under Texas school finance law administered by the Texas Education Agency.  The two main components of the FSP are operations funding and facilities funding.   The operations funding component of the FSP provides school districts with assistance in financing their maintenance and operations based on Tier I, Tier II, and revenue at the compressed tax rate components.  A district's revenue at the compressed tax rate is based on the state and local maintenance and operations (M&O) revenue.  A school district's property tax rate is made up of an M&O tax rate and, if applicable, an interest and sinking tax rate (I&S).  The M&O tax rate provides funds for the maintenance and operations costs of a school district.  The M&O tax rate is the local district property tax rate that raises money to maintain and operate the district’s schools.  The maximum M&O tax rate set by the state is $1.50 per $100.00 value.

            For the Port Neches-Groves ISD the M&O for the 2010-2011 budget was set at $1.04 per $100.00 value based on a certified taxable value of $2,713,301,162.  The revenue collected came from local and state funds.  Projected local revenue was $32,146,529 and state revenue was $4,017,296.  There are several categories from which the local revenue is generated including current year and prior years taxes, penalties and interest, ineligible transportation, summer school tuition and fees, interest in temporary investments, rent, gifts and bequests, other local revenue source, other revenue foreign trade zone, other revenue H.B. 1200, and athletic activities.  The categories for state revenue are fewer and they are per capita apportionment, foundation school funds, state revenues distributed by TEA, and TRS/TRS Care on-behalf of payments.  For the 2010-2011 budget these total $36,163,825 for M&O.

            Expenditures for the Port Neches-Groves ISD for M&O 2010-2011 budget totaled $38,044,871 coming from several major categories.  The categories are payroll costs, contracted services, supplies and materials, other operating expenses, and capital outlay.  It is interesting to note that 79.1% of the expenditures came from payroll costs totaling $30,095,335.

            When comparing revenue and expenditures for the projected 2010-2011 budget it is important to note that the district is spending approximately $1.9 million above the projected revenues.  In other words we adopted a deficit budget.  The difference in the revenue and expenditures will have to be made up from some other source, possibly from our fund balance.  The other way to make up the difference is by cutting spending, which is what we are trying to do throughout the district.  Continuing to operate under deficit budgets will ultimately bankrupt a school district.  I believe many other school districts are having the same budgeting issues and we are hoping the state addresses the funding difficulties our school districts are facing.