1996/97 J-200/400/600 Instructions

TO: Chief Business Officials

FROM: Xxxxx County Office of Education

SUBJECT: 1996/97 J-200/400/600 Instructions Manual and Software User Guide

Enclosed are the 1996/97 J-200/400/600 Instructions Manual, Software User Guide and related software which is provided by the California Department of Education. This information relates to the 1996-97 Budget, the 1996-97 Interim Reports, the 1995-96 Unaudited Actuals, the 1995-96 Matrix, the 1995-96 Audit, and the 1997-98 Future Year Budget.

The most significant software changes are:

Technical Review Checklist (TRC): The Technical Review Checklist remains basically the same this year, but there are a couple of new functions:

A new F2 function has been added to provide for quicker movement within the TRC.

New print options make it possible to print specific sections of the TRC. In addition, you can print exceptions only, either for the entire report or by section.

Yes/No questions now have an N/A option for those questions not applicable to your LEA. Also, not answering a Yes/No question, or answering No, will create an exception.


Criteria and Standards (C&S): Additional data extraction is being performed, including the Base Revenue Limit form for county offices (Second prior year estimated actuals are no longer being extracted). It is important that you have last year's data files on your computer so that the program can perform the extraction. Also, you can overwrite any extracted data in the C&S. Other changes include:

The F2 function and the option to print specific sections have also been added to the C&S.

The C&S forms for other funds have been customized to reflect only those criteria and standards applicable to each particular fund.
The district C&S form is now available for use by the JPAs (J-600CS).

Health and Welfare/Workers' Compensation Certifications: A new certification form (J-200CC/400CC/600CC) has been added to identify reserves set aside for the cost of retirement health and welfare benefits after age 65 and workers' compensation claims.

J-200 Software User Guide: This year's software contains significant improvements as a result of suggestions from users. These changes are detailed throughout the Software User Guide, which assists users with input, validation, and printing of data for all process modes (budget, Interim, Unaudited Actuals and Matrix). The Guide contains important information regarding changes to the software and discussions of past problems and how to avoid them.

Instructions Manual: This document assists the user in the accounting aspects of completing the J-200 series of reports. It has been updated to reflect the latest changes in the J-200 software.

If you have any questions, please call Xxxxxx Xxxxxx at xxx-xxxx.

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May Revise to State Budget

TO: School District Administrators

FROM: Xxxxxx County Office Of Education

SUBJECT: May Revise to State Budget

On May 21, the Administration released its May revise to the 1996-97 State budget proposal. Some $947 million in new ongoing funding is proposed plus an additional $764 million in one-time funds, over and above the Governor's January proposal.

Growth ADA and a statutory COLA of 3.21% are fully funded. The 3.21% COLA translates into an additional $111 per ADA for elementary districts, $135 for high school, and $117 for unified districts. In addition, the following ongoing allocations are proposed:

One-time funding proposals include the following:

By allocating over $1 billion in new monies for class size reduction, a reading initiative, new books and resource materials, and school site block grants, the governor stated,

"What we have here is a 'no excuses' blueprint for getting our schools back on track to teach kids what they'll need to know to succeed in the global marketplace of the 21st century. We have emphasized the importance of teaching students strong basic skills - most importantly, reading - in the early grades. And we've given teachers and students the funds and the tools, through new textbooks, library resources, a strong phonics-based reading curriculum and smaller classrooms, to meet and even exceed that goal."

Among the more controversial items might be the $50,000 per school site block grant proposal and the primary class size reduction proposal. The $460 million to reduce class sizes in grades 1 and 2 to 20 students would be allocated at $500 per student for achieving the 20:1 student/teacher ratio by adding extra classes; or at a rate of $250 per student by meeting a 20:1 goal in other ways, such as teaching assistants or partial-day class size reduction in grades K-3.

Revenue limit projections recently provided Xxxxxx County districts at the May budget workshop were done at the 3.21% COLA amounts.

As you know, the legislature will now consider the Governor's latest proposals and subject them to the give and take of the political process. When the State budget is finally forged, District Advisory will host its annual budget workshop. Please contact the appropriate regional director with any questions or requests for additional information.

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Investment Policies and Quarterly Financial Reports

TO: School District Administrators

FROM: Xxxxxx County Office of Education

SUBJECT: Investment Policies and Quarterly Financial Reports


Effective January 1, 1996, Senate Bill 564 added the requirements of Government Code 53646.

I. Annual Investment Policy

The government code now requires the chief fiscal officer of each school district to annually present the district's investment policy to the Board of Trustees for review. Any changes in the policy shall also be addressed by the Board at a public meeting.


II. Quarterly Investment Reports

G. C. Section 53646(b) also requires the chief fiscal officer to render a quarterly report of its investments to the District Superintendent and Board. However, if the district places all of its investments with the County Treasury, Local Agency Investment Fund (LAIF) or in FDIC insured bank or savings accounts, the chief fiscal officer may supply the statement received from these agencies as opposed to preparing a report.

If the districts enter into other types of investments, then a report is required. The report should be made within 30 days following the end of the quarter. Administrators will need to prepare and submit a report to their Boards for the quarter ended on March 31, 1996 as soon as possible. The report is required to include:

a. The type of investment - U. S. Treasury securities, Federal Agency securities, municipal bonds, bankers acceptances, commercial paper, CD's, money market funds, mutual funds, deposit notes, etc.

b. Issuer's name

c. Date of maturity and purchase

d. Book value - costs of investment

e. Market value of investment for the period reporting

f. Rating of each issuance

g. A description of any program under the management of a contracted party


Further, the quarterly report must verify that the district's investment portfolio is in compliance with the district's investment policy. The report must also include a statement denoting the ability of the district to meet its cash requirements for the ensuing six months or provide an explanation as to why sufficient money shall or may not be available.

In most cases, Xxxxxx County school districts will be able to rely on the provisions of G. C. Section 53646(e) and provide the most recent statements received from our County Treasurer.

Only in cases where districts have invested surplus funds outside the county treasury, LAIF, or a bank/savings and loan insured accounts will districts be required to prepare an individualized written report.

If all funds are maintained in the County Treasury, an acceptable investment policy might be as simple as a statement to that effect. If your district has out of county investments, this office maintains sample investment policies from CSBA and the Municipal Treasurers' Association. Should you desire a sample written policy, please contact Xxxxx Xxxxx at (xxx) xxx-xxxx.

Questions may be directed to the appropriate regional director or Xxxx Xxxxxx, Assistant County Treasurer-Tax Collector at (xxx) xxx-xxxx.

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Sample Audit Contract

19__- 19__

This Agreement is entered into on ___________________, 19__ , between the __________________________________________ School District of Xxxxxx County, State of California, and _____________________________ CPA/PA (Auditor).

Recitals

A. Section 41020 of the Education Code provides in part:

"Not later than the first day of May of each fiscal year each county superintendent of schools shall provide for an audit of all funds under his jurisdiction and control and the governing board of each district shall either provide for an audit of the books and accounts of the district, including an audit of school district income and expenditures by source of funds, or make arrangements with the county superintendent of schools having jurisdiction over the district to provide for such auditing. In the event the governing board of a school district has not provided for an audit of the books and accounts of the district by April l, the county superintendent of schools having jurisdiction over the district shall provide for the audit."

"Not later than December 15 a report of each audit for the preceding fiscal year shall be filed with the county superintendent of schools of the county in which the district is located, the Department of Education, and the Controller. The submission date shall not be extended beyond this date. The Superintendent of Public Instruction shall make any adjustments necessary in future apportionments of all state funds to correct any audit exceptions revealed by such audit reports."


B. District intends to comply with these provisions by contracting with a Certified Public Accountant/Public Accountant.

C. Auditor is a Certified Public Accountant/Public Accountant duly authorized to practice and licensed as such by the State Board of Accountancy.

Agreement

In consideration of the following mutual covenants, conditions, and promises, the parties agree as follows:

1. Audit Procedure and Scope

THE AUDIT shall be made in accordance with generally accepted municipal auditing standards, and shall include, to the extent applicable, the audit procedures recommended by the Controller of the State of California as detailed in the latest edition of the Standards and Procedures for Audits of California Local Agencies, and such other publications on school district and county superintendent audit procedures of the Controller's Office as have been or shall be issued during the period of this contract. The scope of audit shall not be limited to that provided in these publications in the event that in the opinion of the auditor particular circumstances warrant extension of the audit.

"Each audit shall include all funds of the district including the student body and cafeteria funds and accounts, and any other funds under the control or jurisdiction of the district; funds of regional occupational centers and programs maintained by the county superintendent of schools, a school district, or pursuant to a joint powers agreement. Each audit shall also include an audit of attendance procedures."

THE PERIOD to be audited under this contract is the fiscal year beginning July 1, 19__ , and ending June 30, 19__ , July 1, 19__ through June 30, 19__ and July 1, 19__ through June 30, 19__.

If the above paragraph provides for multi-year services, and if for any subsequent year to the prior year's audit the auditor is declared ineligible by the State Controller to conduct LEA audits, this multi-year contract becomes null and void.

IN CASES WHERE the auditor can and does rely upon the work of a State agency, another individual accountant or firm of certified public accountants or public accountants, he shall state in his report the extent of that reliance and shall name the agency, accountant or accountants upon whose work he relies. This paragraph shall not limit the responsibility of the auditor or obligate him to accept or perform work which is not in compliance with the specifications of the engagement.

2. Form and Contents of Reports

FORM AND CONTENT of the audit report shall conform to the extent practicable with the form and content prescribed by the Controller of the State of California under Section 41020 of the Education Code, and as detailed in the latest edition of the publication titled, "Standards and Procedures for Audits of California Local Educational Agencies".

ACCESS TO WORKING PAPERS shall be provided to the California State Controller.

IN THE EVENT that circumstances disclosed by the audits indicate that more detailed verification is required in addition to that which would be sufficient under ordinary circumstances, it is agreed that any extended verification shall be subject to special contract or contracts upon a fee basis to be mutually agreed upon between the respective parties to this agreement.

3. Beginning Work

THE AUDITOR shall begin work on this engagement as soon as practicable after the execution of this contract. Work to be performed in the district shall be done at a time to be mutually agreed upon by both parties.

4. Rendering Reports

TIME IS OF essence in this agreement. The audit shall be completed and the audit report shall be filed as required in Section 6 not later than December 15 after the school year ending June 30. Legislation does not provide for an extension of this filing date.

If the completed report is not submitted by the deadline, the district shall not be obligated to accept the report or to pay for it or for any work done in its preparation. Under these circumstances, the district may immediately engage the services of another auditor.

THE AUDITOR agrees to discuss the final report with the administration office of the district prior to its final preparation and, if requested, to personally present the final audit report to the Board of Trustees in order that the audit might be fully understood and any questions answered.

IT IS AGREED that the auditor, as a result of the audit, will provide reasonable counseling and guidance with respect to more acceptable and effective methods of accounting for the district.

5. Compensation

AUDITING SERVICES under this agreement may be performed by the auditor with the assistance of accountants and clerical employees employed and paid by the auditor. Amounts for such services shall be computed at the following hourly rates:

Supervision Accountant_________________
$______________________________________
Senior Accountant______________________
Assistant Accountant___________________
Typist and Other Clerical______________

In addition to this payment for personnel services, the auditor shall be reimbursed for necessary travel expenses at the rate of per mile.

The total amount which shall be paid to the auditor for his own services and the services of his agents or employees under this agreement shall not exceed the sum of ___________________________________ ($___________________ ) per year.

THE FEE shall include any consultations on the audit report, or any revisions, or the furnishing of any additional data, as may be required by the Controller of the State of California.

THIS FEE shall include any consultations on the audit report, or any revisions, or the furnishing of any additional data, as may be required by the Controller of the State of California.

IN ACCORDANCE with Education Code 14505, ninety percent (90%) of the fees shall be paid by the district to the auditor upon satisfactory and timely completion of all contract provisions including delivery of copies of the audit report. The remaining ten percent (10%) of the audit fee shall be paid to the auditor when the California State Controller certifies the audit report conforms to the reporting provisions of the "Standards and Procedures for Audits of California Local Educational Agencies".

THE DISTRICT shall provide adequate office facilities (exclusive of equipment, supplies, or services) for conduct of work under this agreement without charge to the auditor.

6. Filing of Reports

COPIES OF THE REPORT OF EXAMINATION required by this agreement to be made shall be prepared and substantially bound by the auditor and filed with each of the following offices and department on or before December 15:

1. County Superintendent of Schools
2. State Controller
3. Department of Education, Bureau of Management Services
4. School District ___________ copies

School District_____________________________________

By:_________________________________________________
Authorized Agent



Auditor_____________________________________________

By:_________________________________________________
Authorized Agent

(K-12)
(Rev. 1/ 89)

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19xx Audit Activity Reporting Calendar

Xxxxxx County Office of Education
19XX Audit Activity Reporting Calendar

Date and Responsibility

January 31

On or before this date the district's Governing Board
must review and accept the prior year's annual audit
report at a public meeting. (E.C. 41020.3)

March 15

On or before this date, the district shall submit to the
County Office the Certification of Corrective Action
for any audit findings. Evidence of correction of a
Ending should be provided to the County Office.

April 1

On or before this date, the district must submit to the
County Office verification that their Governing Board
has approved a contract for audit services for the
current fiscal year.

May 1

The County Office shall provide for an audit contract
for any district that has not secured an auditor for the
current fiscal year.

May 15

The County Office shall certify to the Superintendent of Public Instruction (SPI) that all district audits were reviewed and corrections were made, except as noted, or an acceptable plan was submitted.

In accordance with E.C. 41020(m), the Superintendent of Public Instruction (SPI) shall be responsible for assuring that school districts have either corrected or developed a plan of correction for any or all of the following:

(a) All Federal and State compliance audit exceptions identified in the audit.
(b) Any exceptions the County Superintendent certifies as of May 15 that have not been corrected.

(c) Any repeat audit exceptions that are not assigned to In accordance with E.C. 41020(n), the Controller annually shall select a sampling of County Superintendents of Schools and perform a follow-up of the audit resolution process of those County Offices and report the results of that follow-up to the SPI and the County Office that were reviewed.

May

In accordance with E.C. 41020(1), the district's auditor November shall review the plan(s) of correction submitted by the district to determine if the findings (exceptions) have been resolved. If not, then auditor shall immediately notify the County Office and the State
Department of Education and restate the finding in the audit report.

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Student Unemployment Insurance

TO: School District Administrators

FROM: Xxxxxx County Office of Education

SUBJECT: Student Unemployment Insurance


Student employees are exempt from unemployment insurance under certain conditions. Basically, there are three sections of the U.I. code that provide for exemption. Students' wages are exempt under the following conditions:

1. The student is employed at the district where he/she attends school;

2. The student is employed in a training program such as JTPA;

3. The student is employed part-time, but is paid full-time while attending school.

Wages paid to "students" who do not fall into any of the above categories are fully subject to U.I.

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SB 564, Chapter 783, Statutes of 1995

TO: Chief Administrative Officer Business Managers

FROM: Xxxxx County Office of Education

SUBJECT: SB 564, Chapter 783, Statutes of 1995

As an indirect result of the prior year investment problems in Orange County, SB 564 (Chapter 783) was enacted, effective January 1, 1996. Government Code section 53646 added by SB 564 imposes new disclosure requirements on all governmental agencies including K-12 and community college districts. Specifically, the bill would require the treasurer or chief financial officer of an agency to render a quarterly report to the chief executive officer, internal auditor, and legislative body. The quarterly report shall be submitted within 30 days following the quarter covered by the report. The components of Government Code section 53646 are divided into two different types of disclosures.

A. If a local agency has investments in the Local Agency Investment Fund (LAIF), in a Federal Deposit Insurance Corporation (FDIC)-insured account in a bank or savings and loan association, or in a county investment pool, or any combination of the above, the treasurer or chief financial officer need only supply the most recent statement or statements received by the local agency from these institutions, as primary components of the disclosure report.

B. If a local agency has any investments other than those listed above, the treasurer or chief financial officer shall be required to report additional information including type of investment, issuer, date of maturity par and dollar amount invested on all securities, investments and monies held by the local agency, and shall additionally include the description of all the local agency's funds, investments, or programs that are under the management of contracted parties, including lending programs. In addition, the report should also include the current market value as of the date of the report and shall include the source of the same valuation.


Quarterly reports that include A and/or B above shall state compliance of the portfolio to the statement of investment policy of the district or manner in which the portfolio is not in compliance. Quarterly reports shall also include a statement denoting the ability of the local agency to meet its pool's expenditure requirements for the next six months or provide an explanation as to why sufficient money shall, or may, not be available. The treasurer or chief fiscal officer shall report whatever additional information may be available or required by the legislative body of the local agency. The provision of the bill also gives the option to the legislative body to elect monthly instead of quarterly reports for those investments indicated in B above.

Because of the late receipt of information on this statute, we would expect districts to begin compliance during the next quarterly cycle ending June 30, 199X. Attached is a copy of the complete text of SB 564 which delineates the requirements in more detail.

Xxx Xxxxxxx and I reviewed this legislation with our local Business Services Advisory Committee last week, and they designated Xxxx Xxxxxx, Assistant Superintendent in Xxxxx Xxxxxxx SD, as the district representative to help us resolve certain issues. We met this week with County Counsel and they confirmed that all monies held in bank accounts, savings and loan associations, credit unions, County Treasury, LAIF, held in trust in such investments as guaranteed interest contracts (GICs) or certificates of participation (COPs) for whatever purposes are covered under SB 564.

Since many school districts have accounts in the various local credit unions, we are working closely with the credit union league to amend Government Code section 53646 to treat credit union accounts as a type A investment like FDIC insured banks and savings and loan associations. We are also aware that most school districts maintain a variety of small revolving or imprest type bank funds for cafeteria, associated student body funds, etc. Our office believes that some sort of exemption for such small accounts needs to be investigated (possibly excluding accounts that are under $2500). We will be seeking a legislative amendment to exclude small operational funds from this investment disclosure requirement.

In any event, we will be take an aggressive role to mitigate the report disclosure requirements required by SB 564. In addition to the above, Xxx, Xxxx and I will work with the County Treasurer to simplify and possibly consolidate the reporting requirements and work toward a process whereby GIC proceeds can be invested directly by the County Treasurer. To assist districts further, we will develop a simplified disclosure form, approved by County Counsel, that can be used quarterly by districts to comply with Government Code section 53646.

Finally, if your district does not have a formal governing board policy on investments, we would strongly encourage your district governing board to consider such an adoption. For your information, California School Boards Association (CSBA) has developed sample policies that may be utilized. Please call me at xxx-xxxx for further information.
Attachment Follows:

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California Multiple Award Schedules (CMAS)

TO: Chief Administrative Officers, Business Managers, Purchasing Officers

FROM: Xxxxx Xxxxxxx, Director, District Financial Services

SUBJECT: California Multiple Award Schedules (CMAS)


The Office of County Counsel has provided the attached opinion on purchasing from California Multiple Award Schedules (CMAS) under Public Contract Code section 12100 et seq. County Counsel concludes that school and community college districts may not directly purchase electronic data processing and telecommunications goods and services up to $250,000 from CMAS vendors without competitive bidding. However, districts may request the Department of General Services to make purchases or leases on their behalf from CMAS schedules.

We appreciate the lengthy research conducted over the past year by Deputy County Counsels Ralph Shadwell and Ellen Michaels to resolve this issue with various state offices and their legal counsel. We also appreciate the North County Educational Purchasing Consortium and Bryant Guy, Contracts and Special Projects Manager, Palomar College, for their support of this effort.

If you have any questions, please contact me at (xxx)xxx-xxxx.

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