Why begin a book on school finance with a discussion of educational goals and outcomes?
Everyone’s views and beliefs translate into what they feel it is important to fund; Budgets reflect priorities.
Why do you think citizens feel their local school is doing a good job but nationally schools are not doing well?
They know the teachers/staff at their local school and see/know what the kids are doing. They then see news reports about national averages, failing schools, other countries, test scores and drop-out rates
What are some reasons education is regarded as a “public and private good”, and what is the cost of an uneducated citizenry?
The benefit to society of an educated populace is that they are better informed when voting, can manage their personal resources better, have increased lifetime earnings and benefit from lifelong learning.

An uneducated populace leads to more people on welfare and more people in prison.

How has the concept of “local autonomy” traditionally been implemented?
Traditionally, the district office manages most of the money and gives a small percentage to the individual school (mostly because the DO needs to manage the personnel costs). The idea of local autonomy is that decisions are better made when they are made closer to the level in which they will be implemented. In other words, more power will be delegated to the school site vs. the DO.
What roll in financing schools has the federal government generally assumed?
Supplementing budgets, especially for SPED and comp. ed.
Who is defined as special needs? Which groups seem to generate the most support?
Any student that learns differently or has needs different than the “normal” student.

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SPED, EL and GATE are all among the largest supported groups.

Equal educational opportunity is based on what principle? Discuss. What is the difference between equity and equality?
That students have widely varying needs and abilities and the principal that school services should be linked to each student according to those characteristics. Equality is when every student gets exactly the same thing regardless of need and equity is giving every student what they need. All students have a right to an education
What type of tax was historically the major source of school revenues? What are some advantages and disadvantages of this type of funding for schools?
Property tax and sales tax. Disadvantages-P-Wide variation in tax-base wealth, confusing to the average citizen, S-Collects the most from those who can afford to pay it least; Advantages-P-Local taxes fund local schools, S-Easy to monitor, creates less outcry than property tax
What are some aspects of the “voucher/choice/privatization” issue?
Would allow students and families to choose the school they want to attend.

Has not gotten enough support to pass as a ballot initiative. Argument is that giving the families the choice would drive public schools to change for the better. This may further erode funding for public schools. Vouchers also do not pay for 100% of the cost that it takes to educate a student.

What are the three main taxes that have been used in CA? What are the advantages and disadvantages of each?
Income Tax Advantages: Increases during good economy, increase vertical equity Disadvantages: Decreases during bad economy, can be expensive to implement and monitorSales Tax Advantages: Inexpensive to implement, increases during good economy Disadvantages: Becomes burden on those least able to pay (regressive), decreases during bad economyProperty Tax Advantages: Usually consistent during bad economy, easy to identify taxpayer Disadvantages: Lots of equity issues, can be a burden for lower income homeowners
What other types of funding sources are utilized
Site-Value Tax-Tax on the value of the land, even if unimproved. As value appreciates, tax increases.Value-Added Tax-Tax on each service or product that is added on at each stage from production to consumptionLottery-34 cent of every lottery dollar goes to education.

This could mean as little as 1-2% of total budget for a district Private Foundations-Establish partnership with local schools to provide funding School-business partnerships-Local businesses form a relationship with a given school

Why are citizens often reluctant to vote for additional funds for schools?
Only 50% (or less) is actually spent on the classroom or teacher. Other programs like SPED, nutrition programs and transportation take money away but are not really visible to the average voter. Often older citizens do not have children in the schools, feel the money is being misused, have fixed incomes, and fee that expenditures should be linked to outcomes.
What are two myths about money and schooling?
US spends more money on its schools than any other nation.Money makes no difference in student achievement.
Summarize Serrano v. Priest
1968-Local property taxes accounted for about 2/3 of local district funding, which led to inequity in the schools because areas with higher property values had more money for the schools than low value areas.

Even if they had a high tax rate it would still end up being less per pupil. Suit was filed on behalf of John Serrano a student in Baldwin Hills where per pupil spending was $577/student whereas Beverly Hills was spending $1223. Baldwin Hills was paying $5.48 per $100 assessed and BH was only paying $2.38. It was argued that this was illegal because of the 14th amendment and California Constitution Education Clause because school revenues could not be linked to property wealth. California Supreme Court decided that the state tax system violated rights of students to get an equal education.

As a result the state had to find ways to equalize funding.

Summarize Proposition 13
1972-Property taxes were going higher and higher in the late 1960’s and early 1970’s. Those on fixed incomes were scared they would not be able to afford the higher taxes and thus would lose their homes. Changed the way taxes were collected and distributed. Made it to where all taxes go to Sacramento and then are redistributed back to counties and school districts. Also gave Sacramento the power to decide HOW those monies would be spent.

Caused a generation of politicians that were anti-tax. Cut taxes by 6.1 billion statewide. Impose a 1% limit on the property tax rates that were calculated based on the 1975 or 1976 value plus a maximum 2% annual increase or on the purchase price at time of sale.

If district computes it’s revenue limit and it is less than the 1% the state makes up the difference. Basic Aid district is when the revenue limit is LESS than the 1%. Caused education funding to ebb and flow with the states economy instead of being more stable with property tax rates. Any negative events like disasters causes a lack of funding for education.

Summarize Proposition 98
1988-Established a constitutionally-based minimum funding level for K-14 education.

Maintains that education has the first right to state money. Forces state to maintain a reserve, started the School Accountability Report Card (SARC), adjusted revenue calculations beyond the Gann limits, and that minimum funding must be 40.33% of tax revenue.

Has three tests to determine minimum funding for schools. Test 1-34.55% of general fund taxes (equals the percent set in 1986-87 but has been adjusted for property tax shift) goes to K-14. Test 2-Districts must get at least the same amount of state aid and local property tax as they did the year before plus a statewide ADA factor equal to the annual percentage of change to the states per capita personal income. Test 3-(Added with passage of Prop11 in 1990) When growth in state taxes per capita plus ?% is less than the growth of personal income per capita, then the Test 2 inflation factor is reduced to the state taxes per capita plus ?%. This started out as a good thing for schools but the state has started issuing deferrals (we’ll send you the money later) and had negative growth in state taxes and personal income and thus funding for schools.

Summarize Proposition 111
1990-Revised the funding formula for the minimum guarantees.

Prop 98 guaranteed the 1986-87 level of funding (same % of state budget as those years), and the prior years level of funding plus a COLA (called the maintenance of effort). Prop 111 changed the cost-of-living basis from the US consumer price index to the California per capita personal income to determine maintenance of effort levels. This allows the state to reduce the minimum funding guarantee in years of low state income, but says that the funding base must be restored in later years so that education eventually gets the amount it should have if no reduction had been made. Prop 111 usually increases the amount that schools would get but in times of bad economic growth it actually ends up hurting education funding.

Revenue Limit
Revenue Limit is the maximum amount of general purpose state and local revenues a district could receive. Formula set a base amount per student, added an adjustment for special needs and increased it due to inflation.
Senate Bill 90
Senate Bill 90:1972-Established the BRL. High dollar districts trended down to state average.

Low dollar districts trended up. 1974 California Supreme Court said movement was too slow. 1989 California Appellate Court ruled satisfactory progress had been made and closed the case. In 1997-98, 79.9% of students were in the $324 range.

Gann Limit
Gann: 1979-Prop 4-Established limits on allowable growth in state and local government spending. Can increase at a rate no faster than inflation and the change in population. Purpose was to make taxes a smaller percent of personal income.

This also made it to where schools had to fight to get their portion of an ever smaller state budget.

Briefly summarize what happened in CA in the second half of the 20th century that impacted educational financing.
Due to court decisions, propositions and legislation, the primary source of school funding moved from property taxes to other forms of taxation.

This shift also shifted the control of schools from the local to the state level. This made school funding vastly more complicated. As well, each governor and their emphasis (or lack thereof) on education has had a large impact. Pete Wilson and Gray Davis ran on platforms supporting public education. Davis enacted numerous reforms that impacted education. Schwarzenegger replaced Davis by pledging strong support for education.

SB 813 (Hughes/Hart)
Marked the first step toward rehabilitating education. Increased length of school year and school day, instituted mentor teacher program, beginning teachers salaries were improved.

Established mini-grants for teachers, funding for instructional materials and increased counseling for high school sophomores. Even after all this, California still ranked below the national average in per-pupil spending.

Proposition 37 (Lottery)
1984-Established the California Lottery as a way to increase funding for schools without raising taxes. Originally 34% of revenue was supposed to go to schools but Schwarzenegger changed it so that 37% did. As well, in 2000 Prop 20 added in that ? of any growth in lottery money needed to be used for instructional materials.

SB 1977 (CSR)
1996-In the 1980’s and 90’s districts got very little COLA and thus balanced their budgets by increasing class size. K-12 went from 27:1 (1995) to 29:1 in 1997. Had second largest teacher student ratio in the country. CSR reduced K-3 to a maximum of 20 students per year. 4-12 continued to exceed national average (48th in 2001-02). CA went down to 20.8:1 national average went to 15.9:1.

SB 376 (STAR Program)
1997-Standardized Testing and Reporting-Requires all CA districts to use a single test to assess each student in grades 2-11 each year. CA BOE selected the Stanford Achievement Test, 9th Edition (SAT9) but was replaced by the California Achievement Test, 6th Edition (CAT6). As of 2003 it also included the California Standards Test (CST), California Alternative Performance Assessment (CAPA) and the Spanish Assessment of Basic Education. Objective is to provide all stakeholders with an objective view of student achievement.
Proposition 227 (Bilingual Ed.


Originally it was thought that using bilingual education would allow students to learn English gradually while not impacting their education. Prop 227 virtually eliminated bilingual education. Limited English Proficient (LEP) students must be placed in an immersion class and then mainstreamed into GENED classes. Parents can apply for a waiver to keep their student in a bilingual class.
Proposition 38 (Vouchers)
Pete Wilson backed George Bush’s plan of issuing vouchers to parents allowing them to choose the school their child attended. Wilson’s plan was to issue a voucher good for at least 50% of the state and local funding for K-12.

Prop 174 got enough signatures to be on the June 1994 election but Wilson put it on the November 1993 ballot and it was defeated by almost 70%. Prop 38 was placed on the November 2000 ballot. Backed by Tim Draper (Silicon Valley Millionaire) and was similar to Prop 174 except that is gave parents $4000 instead of $2600.

Draper put in a provision that any school accepting the voucher had to do academic testing. 71% said no.

Proposition 39 (Bonds)
Local Obligation bonds were eliminated by Prop 13 but reinstated by Prop 46 (1986). This gave schools more capital outlay funding and allowed schools to form special districts to sell construction bonds as long as they passed with a 2/3 majority.

Most districts found the 2/3 requirement too much. In the last 22 years 44% got majority vote but not 2/3. Almost 90% that failed would have passed if not for the 2/3 requirement. Schools have tried to change requirement (193 and 2000) but lost both times so they agreed to Prop 39 going on the ballot in fall 2000. This Prop passed and lowered requirement to 55%.

Governor Davis’ Plan for Education
In 1998-2000 CA had an upturn in the economy that the governor and legislature were willing to spend on education. Gray Davis was elected and said that his first, second and third priorities were education.

Class Size Reduction-Continued Wilson’s CSR in K-3 and increased program to 9th grade. Districts got money for English and one other subject (math, science or social science). Teacher Peer Assistance and Review (PAR)-gave districts $41 million to implement peer assistance and review programs for veteran teachers. Requires districts, unions and administrators work together to assist veteran teachers to improve their academic programs. Public School Accountability Act-1999-Designed to track and compare a schools performance over time. Each school is assigned an Academic Performance Index (API) score (started in 2000) based on Stanford 9 scores from 200-1000.

First scores were released in June of 2000 and ranged from 302-966. Goal of each school is 800, any school below was given a growth target of 5% of the difference between their score and 800. Each year schools must show a 5% growth in API overall and in ethnic minorities and economically disadvantaged students. High School Proficiency Eamination-1999-Mandatory test in English and Math that must be passed in order to graduate. Originally it was intended to start in 2004 but was postponed until 2006. Students can try as freshman but must take it as sophomores. If they do not pass they can continue to try the test. Includes math questions (including first-year Algebra), English questions and 2 writing samples.

91% of class of 2006 passed.

Proposition 49
2002-After School Education and Safety-Made funds available to schools K-9 that established programs for tutoring and enrichment activities outside the normal school day. State is not mandated to provide funding for every student that participates, schools must apply for funding, funding is determined each year in the budget process and schools that have a predominate population of low-income students are given priority.
What are some of the financial and educational challenges impacting the CA educational system?
Political ambitions of the governors, and legislators; Level of funding for schools, states financial health, huge numbers of students to be served, diversity of the students, training and recruitment of qualified teachers, financial desire and ability of California to support education. Also, control of the schools is mostly in Sacramento. Not enough state resources are being allocated to education. Increase in the state’s overall population (over 6 million) and thus student population.

Increase in the number of minority students. Decreases in student achievement. Increase in class sizes (49th in the nation). Difficulty maintaining technology.

Attacks by/availability of Virtual learning and charter schools. Increase in SPED encroachment and numbers of students. Social promotion. Maintenance of facilities. Increase in requirements for qualified teachers.

Where is CA compared with the national averages (ranks and/or $ amounts) on the following factors
• Number of students.

1st (1 in 8 students K-12 is in CA=6 million students)• Money spent per student (per pupil expenditures).2004-05-29th ($7942/student) Currently ~$9700/student (includes categorical money) 29th in nation• Money spent for K-12 education (per $1,000 personal income).$38/student which is 36th in the nation• Students per administrator (principal).3.2 which is 48th in the nation. US average is 2.

3• Students per teacher (not counting CSR law).21 (vs. national average of 16) Also, 48 teachers per 1000 students• Teacher salaries.#3 in nation behind Connecticut and NJ• Taxes collected from citizens (state and local tax revenues)18th (11.5%)• Per capita personal income.

2010-$42,578• Funding provided by lottery.34% of revenue (averages 1.5-2% of school budgets)• Racial/ethnic distribution.27% White, 9.

1% Asian, 50.4% Hispanic, 6.9% African American, Native American .7%, Filipino 2.5%• Rank for spending for prisons, police, and fire.

5th Police, 4th Prisons

How has the amount spent on education in CA changed since the 1960’s?
It was very high (1978 it was 20% above national average which was 17th in the nation). Began to decline in late 70’s and early 80’s. All time low of 29th in 2000-01.
What percentage of California’s school children represent racial and ethnic minorities ________? Are English Language Learners _________?
65-70% of students are ethnic minorities25% of students are ELL but 40% speak something other than English at home
What is the percentage of children in CA who live in low income families?
25-30% (15% above national average)
What is the “revenue limit” and who determines it?
Senate Bill 90 in 1972 established a formula for maximum per-pupil funding of schools known as the revenue limit.

It is determined by legislators and governor (Account code 8000’s)

What four groups of students represent the highest increase in California’s enrollment and how does this impact school budgets?
SPED, ELL, Minority and Poor All of these groups need to be taught in different ways and need to be funded
What is the purpose of Charter Schools?
To facilitate parent choice and more rapid innovation within public education. Expectation is that if educators are freed from state and district regulation quality will improve. Provides an alternative for parents
What are some ways technology is changing public education?
More and more students are using/needing technology to do school work, students are expecting technology in the classroom and so schools are having to spend more money on technology. Also, more students are taking on-line classes. This could supplement or even supplant traditional classrooms. Professional Development. Distance Learning
What are some ways in which teacher recruitment and training are changing?
Increased enrollment and reduced class size have increased the number of teachers needed especially in math and science.

Number and proportion of teachers with emergency permits has decreased (-12%). 16% of teachers are 55 so there will be lots of retirements coming soon. PD online. Loan Forgiveness.

Children’s Advocacy Institute listed conditions affecting children in CA.

Which has the greatest impact on schools?

Poverty, Health Coverage, Unwed Parents, Hunger, Child Abuse, High School Completion, Crime
Number of school districts in CA. is approximately ________.
Most districts in CA are (elementary, high school, or unified).
By law the school year has ________ days.
180 but until 2013 can be 175
What can you say about enrollment trends in CA since the 1970’s and about future enrollment projections?
60% of districts are declining but some are increasing
What are the four sources of revenue for school districts in the state and what is the percent of funds from each?
State Funds and Property Taxes ~80%Federal Funds ~10-13%Local Revenue ~6-8%Lottery ~1-2%
List three major reasons for enrollment growth/loss in CA.
Birth rate, immigration, employment issues (big business has left)
What is basic aid? How many basic aid districts are there? How is it changing?
Districts property taxes are higher than (or equal) to the ADA from the state-Still get categorical money-Depends on assessed valuation of property values
What are the current issues/challenges facing CA today?
Budget shortfalls, accountability, diversity and facilities
How is fiscal responsibility tied to accountability?
Must be able to demonstrate efficient and effective use of funds
What is ADA?
Average Daily Attendance
Discuss the impact of Proposition 13 on funding for education in CA.

Local property taxes were no longer allowed to be used to fund schools. All taxes go to state and then are sent out according to ADA
How do private business CBOs differ from school district CBOs?
In private industry the CBO is concerned with the companies profit and is judged on how effectively they achieve that. A school CBO’s product is the students which makes their objective less defined.

List 10 major areas of responsibility of a school district’s CBO.
1) Strategic Planning2) Financial Planning and Budgeting3) Information Technology4) Collective Bargaining5) Fiscal Accounting, Reports and Auditing6) Payroll7) Purchasing and Warehousing8) Insurance and Risk Management9) Facilities Management10) Maintenance and Operations11) Transportation12) Food Service
What is a budget?
A district’s spending plan-a plan to accomplish the instructional objectives of the district.
What are some of the budget decisions that must be made each year?
Whether to hire or replace staff, what fringe benefits to provide, salary adjustments for employees, new instructional programs, maintenance of facilities and construction of new schools
How and when does the state budget process begin?
With the governor’s presentation of the budget in early January (usually by the 10th), next the legislature must present a budget to the governor by June 15th. Requires a 2/3 vote in the legislature to pass the budget, which means it is usually late.

What is the purpose of a district budget calendar?
To let everyone know the sequence of events and deadlines for decision-making. It should guide the actions of the district throughout the year. Should also detail dates when budget additions and reductions are reviewed, when worksheets are sue in the business office, when important policy decisions are made, identification of the administrator responsible for each task.

Should include a deadline for enrollment projections.

On the District Budget calendar, what is significant about March 15?
It is the day that the district must serve notice to certificated employees (teachers and administrators) if they are going to be laid off (or demoted in the case of admin).
What must a district do on both of these dates – October 31 and January 31? To whom does this information go and what are three types of responses?
Must file 1st interim (10/31) and 2nd interim (1/31) budget with COE (also with the SPI and SC if a negative or qualified certification). Can get a positive, negative or qualified certification.

Positive means you can meet your financial obligations for the next three years, qualified means that you might not be able to meet obligations sometime in the next three years and negative means you will not be able to meet obligations this year or next.

What is AB 1200 and why was it passed?
Passed in 1991 went into effect in Jan of 1992. Increased the authority of the COE and DOE. Each of these was authorized to review and monitor local districts budgets. Established a system of checks and balances to provide all involved with early awareness of financial problems. It was passed because several districts required loans to stay solvent.
Districts in CA who are of average size (1000 – 30,000 ADA) must set aside what percentage for economic uncertainties?
All districts must conduct a public hearing on the budget each year.


What is FCMAT and why was it established?
Fiscal Crisis and Management Assistance Team was established because of AB1200. It is meant to help districts with their financial and management responsibilities.
What five practices in budgeting will get a district in trouble?
1) Ineffective estimations of ending balances2) Ineffective budget development3) Ineffective budget monitoring and reporting4) Ineffective attendance accounting5) Ineffective personnel practices
When and why is a fiscal advisor assigned to a district?
When the district is unable to meet it’s fiscal obligations. District Superintendent and business staff meet with a county staff member.

They then meet with the district school board.

What proportion of school district monies for K-12 education comes from the State? From the Federal Government? From local sources?
(2/3 state revenue limit)state funds 60%, property taxes 23%, federal funds 10%,miscellaneous 6%, lottery 1-2%
Define and give examples of Proportional taxes, Progressive taxes, and Regressive taxes.
Proportional – sales and property taxesProgressive – income taxes Regressive – sales (especially food)
Define Consumption tax and give an example.
Taxes on spending rather than income (sales tax and value added tax imposed at each stage of production – not in the US at this time)
What are the 6 major sources of information that must be reviewed in order to determine how much money a district will get (Revenue) the following year?
Enrollment projections, average daily attendance, COLA, lottery, categorical income.
What is the major portion of a district’s income and what is the major factor that determines how much a district gets?
Revenue Limit – ADA
What is a COLA? Who gives it? What is its intent?
Cost of Living Adjustment. Adjustment for inflation given by the legislature. To help schools offset inflation.

Most federal monies for schools are for what purpose?
Categorical Programs – special education, Title I, child nutrition, etc.
Can districts charge students for books or supplies? For transportation?
Books and supplies – No. Transportation (home to school) Yes, except special education.
Into what account series (number) are all revenues a district receives placed and who determines this requirement?
Revenues – 8000 series, state accounting manual
What information does the CA School Accounting Manual contain?
Contains account codes that must be used to show revenues and expenditures, and accounting details for program budgeting.
What 6 fields are incorporated in account codes?
Fund/Group, resource, project year, goal, function, and object.

What is program budgeting and what are the four types?
Allocating income and expenditures to specific cost centers in order to be able to provide info about the services and benefits (effectiveness) of each program. Incremental/historical, zero-based, PPBS (planned program budget system), site based.
Which type of program budget has most often been used by school districts?
Incremental/historical – starting point is the prior year budget.
For each program budget, briefly explain the characteristics of the program.
Incremental – start with last year, build a percentage of growth or decrease.

Planning Programming Budgeting System – measure objective against resources (data driven) and very complex – does not allow for site based budgeting. Zero-Based Budgeting – Nothing is sacred – everything is on the table for discussion – data driven – annual evaluation of priorities. Site-Based Budgeting – student needs to available resources (pitfall is pressure groups)

Who prescribes the areas into which a budget is organized?
CA Dept.

of Ed.

List the major object codes used in school district budgets and show what programs/activities are included.
1000 Certificated2000 Classified3000 Benefits4000 Books and Supplies5000 Other Services (conferences)6000 Capital Outlay7000 Other Charges. Largest expenditure in a district budget comes from the salaries and benefits (1000-3000).

Which 3 object code series will show the largest expenditures in a district’s budget?
1000, 2000, and 3000 Salaries and benefits
What are the three major types of school district expenditures?
Operating expenses, payments toward retirement of long-term debt, and capital outlay for long-term assets/land/equipment.
What are the three main operational expenses?
Salaries/supplies and materials/equipment
Define fund. Why do districts use fund accounting?
It is an efficient and accurate accounting procedure, assures the separation of purposes and objectives for each account, and avoids mixing fund accounts.
What are four major types of classifications that are included in a district’s budget?
Governmental – operational expenses, Proprietary – renting cafeteria, M & O to a school, Fiduciary – retirement and student body that cannot be used to support district programs and kept in separate account, Account Group/Long Term Assets and Liability – fixed assets, equipment, etc.

What is the largest and most active fund within the governmental funds and what does it contain?
General Fund – salaries, benefits, textbooks, instructional supplies.
Which fund is required for all districts?
General Fund
What is a restricted fund? An unrestricted fund?
Restricted – categorical funds, Unrestricted – can be used for anything (general purpose/discretionary)
Which fund includes both restricted and unrestricted revenues and expenditures?
General Fund
Government funds are divided into what four classifications?
General, Special Revenue (adult ed., cafeteria, child development, deferred maintenance), Capital Projects (facilities, land, buildings, equipment), Debt Service(bond interest, tax override, etc.)
What would be the use for a proprietary fund?
Rents – cafeteria selling food items to dept. for lunch at professional development program, one dept. to another (technology printing brochures English AP classes)
What is a fiduciary fund?
Trust account
What is a fixed asset?
Permanent objects such as buildings.

Categorical funds come from what two sources?

State and Federal funds
What are the major purposes of categorical programs?
To give money for specific groups that have special needs like SPED and ELL
Approximately how much of the state categorical funding is for special needs students?
Who are these students?43% and it is students with disabilities (IEPs) and GATE
List the top ten state categorical programs in order of how much is allocated to districts.
1) Special Education 3.1 Bil2) Child Care and Development 1.2 Bil3) After School Programs (Prop 49) 942 Mil4) Pupil Transportation 550 Mil5) Quality Education and Investment Act (QEIA) 402 Mil6) Child Nutrition 163 Mil7) Student Assessment 71 Mil8) Charter School Facility Grants 61 Mil9) Year-Round Education Grants 31 Mil10) Partnership Academies 19 Mil
Most of the federal categorical funds support which group.

Hungry (Child Nutrition) and Poor
List the federal categorical programs in the approximate order of how much is allocated to districts.
1) Child Nutrition 21602) Basic Grants 16493) Special Education 12334) Child Care and Development Programs 5545) ESEA Title II- Part A – Improving Teacher Quality 3116) ESEA Title IV – 21st Century Community Learning Centers 1747) ESEA Title III – English Learners and Immigrant Students 1688) Migrant Education 1429) School/Local Education Agency Improvement 1359) Vocational Education 13510) Adult Education 9011) Charter School Grants 4512) ESEA Title VI – Assessment Funding 28 13) ESEA Title II-Math and Science Partnership Grants 24 14) Education Technology 1115) Homeless Children Education (McKinney-Vento) 815) Even Start 816) Advanced Placement Fee Waiver 516) Robert C. Byrd Honors Scholarships 517) Subject Matter Projects 4 18) Neglected and Delinquent Children 218) CalServe K–12 Service Learning Initiative 218) Administrator Training Program 219) Instructional Support (Rural and Low-Income Schools) 1
Why have SB 374 and AB 825 been imposed to improve California’s existing funding system?
SB 374 mandates that each school write a single school plan that will show what the school plans to spend their money on and allows the district to streamline the plan. AB 825 allowed districts to use Block Grants that already existed in any manner they saw fit
How are categorical funds distributed?
Based upon the total number of students that qualify in the category
What are some arguments that have been used in favor of categorical aid?
Districts will cut funds to programs that they feel are not needed or help the least amount of students. Yet these are the students that need the most help and so the state has said these funds MUST be used for those students.
List some arguments/concerns that have been raised concerning categorical aid.

In times of budget problems, all funds available need to be able to be accessed to help all students, yet these funds are earmarked for the special populations and can not be used for any other students. Some may argue that we are hurting the many in favor of the few.
What are some constraints on what is included in school site budgets and what are some categories over which sites have been given discretion in budget decisions?
Staffing formulas, CBA’s, Ed Code, Title 5 Regs, Court Cases, and Statutes
Define centralized and decentralized budgeting. Give examples of each.
Centralized is when budget decisions are made at the DO an example would be personnel decisions. De-centralized is when the sites get to determine what they will spend money on such as a reading specialist.

How do schools keep track of their expenditures, encumbrances, and balances?
Budget spreadsheets and Excel spreadsheets keep track of all of these.
What skills do principals need if the trend toward site-based budgeting continues?
They need to be knowledgeable in the use of budgeting software, accurate, and comfortable with budgeting. Really, they need to be good at budget oversight.

What is the importance of a principal being able to utilize a computer spreadsheet?
To keep track of, report and maintain budgets to the staff, district and board.
Explain encumbrance versus expenditure.
An encumbrance is when something is purchased the amount being held to pay for it is “encumbered” in the budget. An expenditure is how much is actually spent when the item is paid for
What is the purpose/intent of the audit requirement by the State?
To encourage sound fiscal management practices among school districts for the most efficient and effective use of public funds for the education of children in CA.
What is required of every school district on an annual basis? What funds are the highest priority for the audit?
To perform an audit by unbiased third-party CPA’s that are qualified to perform school district audits. This must be done by December 15th each year. The highest priority funds in audits are the general fund and the student body fund.

What are the qualifications and timelines required for conducting school district audits?
The CPA’s must be from the approved list published by the state controller by December 31st each year. The district must have the audit for the previous year submitted to the state by December 15th.
Define “audit” and state what information an audit provides about school district funds.
An audit is a review of the districts accounting practices and expenditures. It is meant to make sure the district is spending money in the ways mandated by the state and federal government. Also, to see if the financial statements provide a fair and reasonably complete picture of the district’s financial position and health. To see if there are effective controls over and a proper accounting for revenues, expenditures, assets and liabilities. If reports and claims to federal and state programs contain accurate and reliable data.

What would an audit cost for a school district with an ADA of 10,000 (give a range).
$2.00 to $26.00 per ADA (10,000 ADA – 1,000 ADA)
What three types of opinions may a district receive from the audit?
Positive Unqualified means that everything is fine and the districts outlook is goodQualified indicates that there are some problems with financial recordsNo Opinion means that records are poor or non-existent and the auditor can not form an opinion
What are three common areas where audits have shown problems with financial records in districts?
Attendance RecordsStudent Body OrganizationsFixed Assets
Explain the purpose, responsibilities, and value of an internal audit committee.
The committee is meant to provide an internal oversight of the financial accounting in the district.

It tends to cause employees to think twice before trying to take advantage of the system, it increase the boards ability to monitor the budget, and to enhance overall fiscal accountability. Can discuss recommendations with management from the auditors and help to implement budget changes and plans.

How are student body organizations valuable to a school?
Help the principal set a tone for the school and assist in the educational program for all students. This includes student citizenship, school operations, attendance, student activities, scheduling and conducting school programs. Helps with serious matters like drugs, alcohol, vandalism, and violence.

Can increase school morale and pride. Expand opportunities available in the regular school setting and provide valuable training for students.

What are some examples of student body organizations?
Athletic teams, music groups, academic groups and social groups.
Who has the ultimate responsibility for management and accounting of student body funds?
The principal
What document is essential as a major source of information for proper accounting of Student Body Funds?
Accounting Procedures for Student Organizations
How are student organizations supported?
By fund-raising
By law, what are the goals and purposes of student fundraisers?
To promote the general welfare and morale of the students as a whole
By law, who is responsible for setting procedures for student body funds?
School Board
What steps should be taken by all student body organizations to ensure compliance with legal requirements?
A) A constitution should be written that states the name and purpose of the organization.

B) Minutes should be kept at each meeting.C) A procedure developed to authorize expenditures.D) Policies should be developed for approving the student body budget, for fund-raising activities and for the election of officers.

Who must approve all fundraisers?
Student council and school principal
Name four federal and state regulations that govern the sale of food items on school campuses.

No food prepared on the premises by students may be sold during the school day. In elementary, food items may be sold after the close of the midday food service period. In Secondary schools, food may be sold all day as long as the items are not prepared on the premises and as long as that food item is not sold by the district food services program during the school day.
What organization governs fund-raising procedures connected with athletic events?
California Interscholastic Federation (CIF
What safeguards must be in place before student body monies may be expended?
All expenditures must receive prior approval, either as part of the approved student body budget or by action recorded in the minutes of the meeting. Funds should be used to benefit those students that are currently active members of student organizations and have assisted in generating such funds.
What 3 types of fundraising activities should not be used and why?
Raffles and Games of Chance-Element of GamblingAnimal Rides, Activities involving darts or arrows, Throwing objects at live targets, Dunking a person into a water tank, Destroying old cars or similar objects with hammers, etc, Trampolines or mini-trampolines-SafetySelling used jewelry, Rummage Sales-Health Factors
What types of audits are required for student body funds?
Periodic internal and annual external audits by the school board.

Interview your principal or assistant principal: From an administrator’s point of view what are the challenges of working with student body monies? Challenges of fundraising activities?
Lots of moving pieces to keep track of, students are kind of in charge of it so policies can not really be enforced, loose record keeping by the students. Challenges-Not to overlap them, too many mean less for everyone, can’t sell food anymore.
What types of transportation do school districts provide for students?
Special education, co-curricular, from one school to another
What was the action that created cross-town busing?
Brown v. Board of Education-1954
What are the most recent additions to bus safety laws?
1977-Improvement in construction (emergency exits, roof strength, seating, fuel system integrity and hydraulic brake systems1986-New York mandated seatbelts be in all new school buses (did not say had to be used)1995-Drug and Alcohol Testing for drivers
How much “encroachment” exists in most districts regarding transportation of students and what are two causes for this?
5-10% of general fund monies1)State funding has not been adjusted for growth in students being transported since 1983-842)Few COLAs and increases have been small (over 50% is funded by districts, not state)
How has computerized school bus routing assisted districts to reduce transportation costs?
Optimum schedules for picking up and delivering students to drop-off points near their home, calculate walking distances from bus stops to homes, find more economical and time saving routes, provide special schedules for handicapped students, lay out field trips and schedule employees
What has the CA Supreme Court ruled (2 cases) regarding charging transportation fees?
1992-Arcadia Unified School District v. State Department of Education-Districts can charge for home-to-school transportation as long as students who could not afford it were exempt from the fee.1984-Hartzell v. Connell-Can not charge fees for extra curricular activities since they are an integral part of the school
When developing a fee policy for transportation, what should be considered?
1) The fees collected in any year may not exceed the statewide average unsubsidized cost of providing transportation on a public transportation system.

2) Neither may they be higher than the district’s actual operating cost of home-to-school transportation minus state aid for transportation.

Discuss the advantages and disadvantages of contracting with outside firms for student transportation services.
Advantages-Can conserve funds, avoids capital expenditures for buses, may reduce the overall operational cost of transporting students, other vendorsDisadvantages-Could choose an unsafe provider, could choose an inefficient provider, loss of control
What are some strategies that have been used by school districts to offset the high costs of student transportation?
Longer student walking distances, contracting out the transportation services, staggering start and end times of schools, fees for student transportation.
What are the pros and cons of charging student transportation fees?
Pros-More money for district, bigger budgetCons-Can’t charge poor or extra curricular riders, smaller budget
How does the physical appearance of the school facility (cleanliness, state of repairs, building conditions, etc.) affect the educational climate and student learning in a school?
First evidence of quality, community takes pride in school appearance, newcomers’ judgment of school desirability, show community’s priorities for education, student and staff pride, and influences student learning.
What is the function of a maintenance and operations department?
Maintenance: Repairs and replacement of grounds, buildings, and equipment (floors, roofs, heating, and AC), replanting fields (not always done by district).Operations: Housekeeping to keep facilities functional (cleaning, utilities, gardening, delivering supplies, etc.)
What positions are considered “maintenance” staff? What positions are considered “operations” staff?
Maintenance: Repair people (electrician, plumber, carpenter) – skilled trades.

Operations: Custodians.

List 4-6 areas (by topic/concept) that should be addressed in a board policy on the maintenance and operations function of the district.
District Philosophy: Maintaining schools to match community housing (home values); Financial Commitment of District, Contracting Out v. In-House; Capital Improvement (involvement of maintenance staff); Priorities for responding to maintenance requests, Cleaning and landscaping (water/energy conservation); and, Organization of the Maintenance and Operations Department.
To whom does the director of maintenance generally report (except in very small districts)?
Assistant Supt.

for Business – District Business Manager – Business Dept.

Should school custodians report to the school principal or the director of maintenance? What about maintenance staff?
Shared responsibility between principal and M&O. Principal should always have discretion to use custodial staff for school needs.
Why would establishing a “maintenance reserve fund” be a good idea?
It is difficult to predict the lifespan of equipment or the timing of repairs, particularly costly repairs (AC/Heating System). Having a plan and a reserve fund for unexpected needs is cost-effective.
What are some areas to which attention should be paid in controlling personnel costs in the maintenance and operations department?
Encumber personnel costs in the beginning of the year (overtime and substitutes); Monitor extra duty hours; Monitor labor costs on work orders (time needed to do repair); Monitor expenditures (fix or replace?)
Why should districts have a master plan for equipment replacement and repair?
Monitor critical areas: Life span of roofs, parking lots, athletic areas, plumbing, electrical, pools, etc).

Distribute projects so that something is done each year to stay up with site needs.

What is a “work order” and what are the advantages of using a work order system?
To account for repairs efficiently – use technology to track and cost each work order by site. Use for budget needs in succeeding years.
The administration of child nutrition programs is a three-way partnership among what entities?

S. Dept. of Agriculture, CA Department of Education, and Local School District.

Why was the National School Lunch Act of 1946 passed and what did it hope to accomplish?
Philosophy of health and nutrition, meet basic needs of students (hungry students do not learn), and availability of surplus commodities.
When was the School Breakfast Program (SBP) established and what is the participation in it by students in CA?
Federal Child Nutrition Act of 1966 – Participation fluctuates.

If a child qualifies for free or reduced lunch then he/she qualifies for free or reduced breakfast

School lunches must provide approximately what percentage of the recommended daily allowances (rda) for good nutrition? What dietary guidelines were developed by the U.S. Department of Agriculture?
Fat content in food is less than 30%
Who has responsibility for the food services department in most districts?
Assistant Supt.

of Business/CBO

The federal government subsidizes meals with varying degrees of payment, depending on whether the meal served is a paid or a reduced, or free. The state reimburses only what type of meals?
The state reimburses for free or reduced meals.
Because the state and federal governments supply funds for the food service program, what is imperative for the food services director to do?
Keep accurate track of all income and expenditures.
Food service monies are placed in a fund that program directors strive to keep .
What are two major expenses of a food service program?
Personnel and Food.
What has been the trend in contracting out food service operations and why?
More districts are contracting out – looking at reduced costs, no personnel responsibilities, no responsibility for salaries/benefits, menus more accommodating and less expensive (not always).

Does not make it less expensive or self-supporting.

What besides food and personnel are legitimate costs of the food program?
Telephone, postage, cleaning supplies, health and safety needs, utilities, and custodial time.
What is one of the major financial goals and challenges for the food services fund?
To be self-supporting.
How does the U.S. Dept. of Agriculture’s commodities program help schools?
Entitlement Commodities: Dept. of Ag.

Purchases and sends to schools (flour, oil, ground beef, canned fruits, etc.).Surplus Commodities: Farmers produce too much of an item. U.S. government purchases excess food items and sends to schools.

The commodities programs have decreased over the years in their ability to help school districts, therefore, districts have to spend more for food items.

What are some reasons to have a staff eat in the cafeteria?
Increases revenue
What percentage of school buildings were built more than 25 years ago?
The ACLU’s lawsuit focused on what concerns?
Heating, restrooms, and infestation (rats/cockroaches)
The Crampton and Thompson study estimated that the nation’s schools needed $266 billion for new construction, repairs, and updates. Where does CA rank in this need?
2nd after New York.
Why does Florida have the lowest per pupil need for school facilities?
Aggressive funding for school facilities.
What are the two parts to the facilities issue?
New classrooms. Modernization of current classrooms.
At the present time, what is the major means of financing school construction dollars?
General Obligation Bonds approved by the voters.
There are two types of bond issues that finance schools:
State level bond measures and local district level bond measures.

State Level Bonds are generally placed on the ballot in June or November elections in even years.
Require what kind of majority by voters? Simple Majority Are used to fund facilities for: Backlog of applications for funding – funding in the past has not been adequate to meet the need for new construction. Have to be paid back out of what fund of the State budget and over how many years? General Fund – over a 20 year period.

Local District Bonds
Due to Prop. 39, school district general obligation (GO) bonds are subject to 55% voter approval instead of the 2/3 previously required.Were not allowed as a result of Prop. 13 for a period of 8 years from 1978-1986.
Briefly describe the three phases of school facilities construction in CA.
Phase I – CA constitution to years after WWII (local taxes paid for it – through GO bonds).

Phase II – End of WWII to Prop. 13 (GO bonds). Increase in enrollment and reaching bonding capacity resulted in the state entering to give loans to local districts (formula included an equalization factor for low-wealth districts).Phase III – After Prop. 13 in 1978 (GO bonds forbidden until 1986). State major source of funds, property taxes limited by Prop. 13 (district’s ability to raise funds was reduced).

What is the primary effect of Prop.

13 on financing school construction?

A shift of local control to the state.
Discuss the Leroy Greene School Building Lease/Purchase Program. What is this program? What is the application process?
This is the name of the fund through which state bond funds are available from which districts get construction funds from the state.Complicated process and time consuming. Districts of their elementary students on a multi-track or year-round program.

Districts must match state funds with local funds. Funds may be used to purchase school sites. Distribution of funds is determined by the State Allocation Board. Includes Deferred Maintenance Funds, Asbestos Abatement Funds, and Incentive Program for Year-Round Schools.

What are developer fees?
A specified charge per square foot on new residential and commercial construction. Proceeds are used to build or renovate schools.
What are certificates of participation?
Provide long-term financing for districts. Repayment makes a large demand on revenues – must be paid back from the General Fund.
What are general obligation bonds?
Bonds passed by the state or local district for school construction.

What is surplus property? If surplus property is sold, what must the proceeds be used for?
Surplus property – property not being used by the district (closed school or vacant land). Proceeds from sale of surplus property must be used for school construction.
What is a Mello-Roos Community Facilities District (CFD)?
To a large degree this type of district (Community Facilities District) is dependent upon the amount of available vacant land in a district.

Local property owners need a 2/3 vote to levy local taxes for school construction. This is different from Developer Fees ( a specified amount is charged per square foot for new residential or commercial construction).

What is a parcel tax and what has it generally been used for?
A flat tax – needs 2/3 vote to pass – can be used for special purposes.
What is meant by assessed valuation?
Value of land, homes or businesses set by the county assessor for property tax purposes.
What are some advantages and disadvantages to using relocatable classrooms?
Portables cost less and can be moved where needed. Heating and air conditioning(utilities)costs can be problematic.
What factors have contributed to the school facilities crisis in CA?

13, demographic shifts (growth), class size initiatives, and aging buildings.