Developing a budget requires focusing on organizational vision and prioritizing resources. Managing a budget requires rigorous control standards to account for revenues and expenditures. Organizations that consistently develop and manage budgets build a culture of high expectations and trust with the stakeholders.
Transparency and accuracy are the hallmarks of resource management. Columbia Public Schools is in its fourth year of decreasing revenues while experiencing a steady increase in student population. This creates additional challenges to keep focus on our vision to be the best school district in the state as we must reorganize our programs for efficiency. External audits provide an objective way to review the district’s $229 million annual budget.
Yearly external audits
Each year an auditor outside of CPS examines the district’s financial statements using the Government Audit Standards. The purpose of this audit is to assure the Board of Education and the community that the financial statements are accurate and to review CPS’ internal control practices and compliance with laws, regulations, contracts and grants.
The audit also includes a required report specifically on state compliance in areas of budgeting, attendance, student transportation ridership, disbursements and student free and reduced-priced lunch eligibility. Finally, the auditor performs a required review of federal awards and major programs including title programs (specific federal allocations), special education, federal stimulus funds (known as ARRA), early childhood special education, vocational education, adult literacy, school lunch and many other smaller funding sources.
The actual financial statements must be prepared by district staff and reviewed and reported on by the external auditor as per the Government Auditing Standards requirements. The report, referred to as the Comprehensive Annual Financial Report (CAFR), is the result of that collaborative work.
25 years of highest standards
Our school district’s CAFR has received the Certificate of Achievement from the Government Financial Officers Association (GFOA) for 25 consecutive years. This award is given to organizations that meet the highest standards in government accounting and reporting based on an evaluation by a peer review of GFOA committee members from across the country.
The school district’s business office also has received the Certificate of Excellence from the International Association of School Business Officials (ASBO) for more than 25 years. To receive either award, the appropriate accounting standards must be met and the reports must provide transparent and understandable information on the district’s financial position, accounting practices and information regarding the assumptions and practices used in managing the finances of the school district.
CPS is one of the few school districts in the state that receives both recognitions.
Monitoring use of federal funds
In addition to the annual audit, the Missouri Department of Elementary and Secondary Education (DESE) recently performed an on-site fiscal monitoring review to assure transparency and accountability standards as they relate to the receipt and use of federal funds. We were one of four districts in Missouri chosen for this review.
The review looked at timely submission of budgets applications and final expenditure reports, allocation amounts, and carry over amounts as they relate to federal programs. DESE looked at compliance with policy, procedure and practice in areas of record keeping, fiscal management, internal controls, personnel and purchases when federal funds were used.
DESE brought in specialized teams for general fiscal review, career education, No Child Left Behind, the Individuals with Disabilities Education Act and afterschool programs. Last year CPS received $22 million in federal program awards, and each funding stream comes with significantly different compliance and other requirements.
All of our audits confirm the presence of rigorous standards and procedures for fund management. A few minor issues were noted related to our ongoing conversion to new Business Plus accounting software that replaces our 20-year-old accounting software. However, the new software is already making the budget management process even more efficient and rigorous.
As any business owner or operator knows, it takes dedicated and talented employees to make a business a success. The CPS business office is just that. I commend them for their daily commitment to excellence in managing the good use of public dollars.