Updates from Financial Compliance
Updates from Financial Compliance TASBO Annual Conference Division of Financial Compliance Texas Education Agency David Marx March 1, 2017
1
Depository Contracts Update
Changes to the bid/proposal form
The ability to use other banking institutions that are insured or collateralized outside of the banking services bank
The ability to change from a compensating basis to a fee basis or vice-versa
The ability to use a letter of credit but with a preference of pledged securities to insure public funds
Update references of outdated technological changes
The proposed rule change is posted with the Texas Register for public comment beginning March 3…any other proposed changes please submit a comment 2
313 Agreements and GASB 77
To the Administrator Addressed Letter including accounting for a 313 Agreement and GASB 77 Tax Abatement Disclosures coming in the near future
Exhibit J-1 - 313 Collections are reported net of the credit (Tax collector should be collecting net collections) ( To the Administrator Addressed Letter – Tax Collections for Districts with Chapter 313 Agreements dated January 13, 2016) beginning 20162017
GASB 77 effective for financial statements beginning after December 15, 2015
Note disclosure only
Details of the contract (such as type of tax abated, name of the taxpayer, authority to abate, reason for the abatement, etc.)
Amount of current years tax abated (accrual basis)
Amounts received from other governments
Any other commitments other than the abatement
3
Updates on FIRST
Final 2015-2016 Results:
1,019 ISDs passed only 4 failed
1,003 Superior, 16 Above Standard, 4 failed
172 Charter Schools passed only 2 failed
163 Superior, 9 Above Standard, 2 failed
4
Final FIRST Analysis ISDs Indicator
Charters Scored < 6 points
6 Days Cash
68
7%
51
29%
7 Current Assets/Current Liabilities
46
4%
27
16%
8 Long-term Debt/Total Assets
46
4%
2
1%
9 Revenues/Expenses
27
3%
13
7%
10 Debt Service Coverage
140
14%
14
8%
11 Administrative Cost Ratio
28
3%
36
21%
12 Student to Staff Ratio
22
2%
7
4%
13 PEIMS vs. Actuals
12
1%
8
5%
14 Material Non-compliance
38
4%
4
2%
0
0%
0
0%
15 Financial Hardship Total
1023
174
5
Updates on FIRST
The point “bands” are changing again
A = Superior B = Above Standard C = Meets Standard F = Substandard Achievement or fail a critical indicator
16-17 Rating Year (90 – 100 points) (80 – 89 points) (60 – 79 points) (0 – 59 points)
15-16 Rating Year (70 – 100 points) (50 – 69 points) (31 – 49 points) (0 – 30 points)
6
Critical Indicators Failure to meet the requirements of any critical indicator would cause a failure of FIRST
Indicator 1: Timely Filing of the AFR and Data Feed Indicator 2: Unmodified Opinion and Material Weakness in the AFR Must pass 2.A to pass this indicator:
2.A - Unmodified Auditor Opinion for the AFR, or
2.B - No Material Weakness Noted on the AFR
Indicator 3: Monetary Default on Debt
Indicator 4: Timely Payments to Government Entities
Indicator 5: Unrestricted Net Asset Balance
7
Indicator 5 Total Net Assets
Was the total unrestricted net asset balance (Net of accretion of interest for capital appreciation bonds) in the governmental activities column in the Statement of Net Assets greater than zero? (If the school district’s change of students in membership over 5 years was 10 percent or more, then the school district passes this indicator.)
Critical Indicator – Yes or No response
Source: AFR via the Data Feed, Schedules A-1 and L-1
8
Indicator 5 Total Net Assets
9
Indicator 5 Total Net Assets
10
Indicator 5 Total Net Assets TSDS PDM1120-0005
11
Indicator 5 Total Net Assets TSDS PDM1120-0005
12
Indicator 6 Days of Cash on Hand
Was the number of days of cash on hand and current investments in the general fund for the school district sufficient to cover operating expenses? (excluding facilities acquisition and construction)
Range of 0 to 10 points on a sliding scale Points
10
8
6
4
2
0
Days
≥90
1
Depository Contracts Update
Changes to the bid/proposal form
The ability to use other banking institutions that are insured or collateralized outside of the banking services bank
The ability to change from a compensating basis to a fee basis or vice-versa
The ability to use a letter of credit but with a preference of pledged securities to insure public funds
Update references of outdated technological changes
The proposed rule change is posted with the Texas Register for public comment beginning March 3…any other proposed changes please submit a comment 2
313 Agreements and GASB 77
To the Administrator Addressed Letter including accounting for a 313 Agreement and GASB 77 Tax Abatement Disclosures coming in the near future
Exhibit J-1 - 313 Collections are reported net of the credit (Tax collector should be collecting net collections) ( To the Administrator Addressed Letter – Tax Collections for Districts with Chapter 313 Agreements dated January 13, 2016) beginning 20162017
GASB 77 effective for financial statements beginning after December 15, 2015
Note disclosure only
Details of the contract (such as type of tax abated, name of the taxpayer, authority to abate, reason for the abatement, etc.)
Amount of current years tax abated (accrual basis)
Amounts received from other governments
Any other commitments other than the abatement
3
Updates on FIRST
Final 2015-2016 Results:
1,019 ISDs passed only 4 failed
1,003 Superior, 16 Above Standard, 4 failed
172 Charter Schools passed only 2 failed
163 Superior, 9 Above Standard, 2 failed
4
Final FIRST Analysis ISDs Indicator
Charters Scored < 6 points
6 Days Cash
68
7%
51
29%
7 Current Assets/Current Liabilities
46
4%
27
16%
8 Long-term Debt/Total Assets
46
4%
2
1%
9 Revenues/Expenses
27
3%
13
7%
10 Debt Service Coverage
140
14%
14
8%
11 Administrative Cost Ratio
28
3%
36
21%
12 Student to Staff Ratio
22
2%
7
4%
13 PEIMS vs. Actuals
12
1%
8
5%
14 Material Non-compliance
38
4%
4
2%
0
0%
0
0%
15 Financial Hardship Total
1023
174
5
Updates on FIRST
The point “bands” are changing again
A = Superior B = Above Standard C = Meets Standard F = Substandard Achievement or fail a critical indicator
16-17 Rating Year (90 – 100 points) (80 – 89 points) (60 – 79 points) (0 – 59 points)
15-16 Rating Year (70 – 100 points) (50 – 69 points) (31 – 49 points) (0 – 30 points)
6
Critical Indicators Failure to meet the requirements of any critical indicator would cause a failure of FIRST
Indicator 1: Timely Filing of the AFR and Data Feed Indicator 2: Unmodified Opinion and Material Weakness in the AFR Must pass 2.A to pass this indicator:
2.A - Unmodified Auditor Opinion for the AFR, or
2.B - No Material Weakness Noted on the AFR
Indicator 3: Monetary Default on Debt
Indicator 4: Timely Payments to Government Entities
Indicator 5: Unrestricted Net Asset Balance
7
Indicator 5 Total Net Assets
Was the total unrestricted net asset balance (Net of accretion of interest for capital appreciation bonds) in the governmental activities column in the Statement of Net Assets greater than zero? (If the school district’s change of students in membership over 5 years was 10 percent or more, then the school district passes this indicator.)
Critical Indicator – Yes or No response
Source: AFR via the Data Feed, Schedules A-1 and L-1
8
Indicator 5 Total Net Assets
9
Indicator 5 Total Net Assets
10
Indicator 5 Total Net Assets TSDS PDM1120-0005
11
Indicator 5 Total Net Assets TSDS PDM1120-0005
12
Indicator 6 Days of Cash on Hand
Was the number of days of cash on hand and current investments in the general fund for the school district sufficient to cover operating expenses? (excluding facilities acquisition and construction)
Range of 0 to 10 points on a sliding scale Points
10
8
6
4
2
0
Days
≥90
