NBMO - AZ School Finance Basics

As if we weren’t overwhelmed by all the other topics discussed at the New Board Orientation we learned about school finance.   Important financial responsibilities we have are to:

•         Understand Budget Limits
•         Understand where the revenue comes from
•         Monitor implementation of budget
•          Adjust the budget when needed

We also learned about Expenditure Budget (Proposed and Adopted annually by July 15^th), Revised Expenditure Budget (Completed by Dec 15^th and/or May 15^th), and Annual Financial Reports (Completed by Oct 15^th).   That was easier to understand than the various categories from where the revenue comes.  There are six and they all have their requirement of when the money is allocated and for how it can be spent:

• Local Taxes – Property tax on real and personal property within the district provides all or a portion of the Maintenance and Operations fund, Capital Outlay (Textbooks used district-wide, furniture & equipment, & etc. ) and Soft Capital ( Site based textbooks, library books, software, & etc). 
• State Equalization - state general fund revenues used to support Pre-Kindergarten to 12^th grade Education. 
• County Equalization – countywide tax rate (varies each year) applied to offset the State Equalization.
•  State Grants – state general fund appropriations used to support supplemental education programs
•   Federal Grants – pass through the AZ Dept of Education to districts to support supplemental education programs with regulations
•   Federal Impact Aid – paid directly to districts in federal impacted areas due to federal lands in lieu of property tax.    

We are used to regulating how we spend money, but it usually comes from one place, the employer.  As a School Board Member we will have to be sure we understand how we spend the dollars and where the money originated.

The dollars we received are allocated based on Average Daily Membership (ADM).  The ADM is calculated by the state as the average number of students which are enrolled on Sept 15^th, Nov 15^th, Jan 15^th, and Mar 15^th.   For each date the student is enrolled, we receive 25% of the funding for that student.  This makes the enrollment personnel very important to the district! An error in student count is detrimental to funding.  As School Board Members we need to monitor, verify accuracy, and investigate reasons behind significant changes in student count.

Often times districts seek financial support from the community.  Tombstone is no different.  I learned at this New Board Orientation the difference between a bond and an override.  A bond is a long term obligation for brick and mortar or furniture for the number of years if specified in the bond.  An override can only be used for capital and salaries for up to 7 years.