PUBLIC PRESENTATION JANUARY 30, 2020
The Ohio Performance Team Started in 1995 Over 400 Performance Audits Follows Generally Accepted Government Auditing Standards
What is a Performance Audit? Performance audits provide elected officials and government employees with an objective, third-party analysis of their operations to help them: Make Informed, Improve Reduce Costs Data-Driven Performance Decisions
Performance Audit Phases Planning Field Work Reporting Analysis and Written report Audit plan conclusions • Client report review to • objectives or areas of ensure information is analysis • Detailed work factually correct and conducted to deliver presented fairly on the audit plan
Why We’re Here Projected in the May five-year forecast Deficits starting in FYE 2021 Total projected deficit of $10.8 million
BSLSD Current State
November 2019 Five-Year Forecast
Days Cash on Hand
FY 2018-19 General Fund Revenue
FY 2018-19 General Fund Expenditures
Local Tax Effort Comparison- Local Peers
Projected March 2020 Levy Impact Forecast FY Forecast FY Forecast FY Forecast FY Forecast FY 2020 2021 2022 2023 2024 Original Ending Fund Balance $3.0 M $1.3 M ($1.9 M) ($6.2 M) ($11.7 M) Estimated New Levy Revenue $0 $1.7 M $3.3 M $3.3 M $3.3 M Cumulative Balance of New Levy Revenue $0 $1.7 M $5.0 M $8.3 M $11.6 M Revised Ending Fund Balance $3.1 M $2.9 M $3.1 M $2.1 M ($27k)
Audit Results
Noteworthy Accomplishment Definition Phase 1 & 2 Cuts Acknowledge significant • The Board was proactive accomplishments or on its budget deficits exemplary practices. • Collective action was able to delay the forecasted deficit for FYE 2021 until FYE 2022 • However further action is still needed to fully address the forecasted deficits
Recommendations
Peer Group Districts
Forecasting and Budgeting Practices Are budgeting and forecasting practices comparable to leading practices? Recommendation: Reassess the Strategic Plan due to Fiscal Condition Specifically the technology upgrades included in the forecast ► BSLSD could save $250,000 annually in FYE 2022-FYE 2024 ►
Develop a Formal, Multi-year Capital Plan Is the District’s capital planning efforts consistent with leading practices? Recommendation: By formalizing and following a written capital plan the District would ensure that capital assets are effectively prioritized and planned for based on a comprehensive view of the District’s needs ► The District may be able to spread out large purchases with the proper plan in place.
Extracurricular Activities Is the District’s General Fund subsidy of extracurricular activities appropriate in comparison to peers? Recommendation: Reduce General Fund subsidy Fully reduce subsidy due to fiscal condition ► Typically recommend going to peer levels, but the fiscal condition necessitated ► a more aggressive cost saving approach Eliminating the subsidy can save approximately $703,000 annually ►
General Fund Subsidy per Pupil
FYE 2020 Staffing by Category
Staffing Recommendations ► Reduce the following positions to the primary peer average: ► 1.0 FTE technical positions- Board approved reduction for FYE 2021 ► 0.5 FTE central office support ► 0.5 FTE career-technical education teacher positions ► 1.0 FTE counselors ► 0.5 FTE library staff ► 1.5 FTE nursing staff Total: 5 FTEs (2.4 percent of analyzed staff) ► Total savings: $389,200 on average annually ►
Collective Bargaining Agreements Are the District’s collective bargaining agreement (CBA) provisions comparable to the peers and ORC minimums? Recommendation: Renegotiate identified provisions ► Compared to local peers and ORC minimum requirements ► Implementation of the recommendation is not assumed until after the expiration of the memorandum of understanding in 2021
Collective Bargaining Agreements ► Sick Leave ► Attendance Incentive - $15,100 ► Vacation Leave ► Severance Payout ► Tuition Reimbursement - $16,300 ► Holidays ► LPDC Compensation - $525 ► Mentor compensation - $6,200 ► Merit Pay - $158,700 ► Total: $196,800
Insurance - Vision Are the District’s insurance benefits comparable to industry standards? Recommendation: ► Reduce Employer Cost of Vision Insurance ► Compared to the Greene County school average, the District had a higher employer premium cost
Vision Plan Comparisons
Bus Replacement Are the District’s bus replacement practices consistent with leading practices? Recommendation: Develop a data driven replacement process The District has an aging bus fleet. With proper planning, informed by data, ► the District can identify which buses to replace and at what time.
Replacement Criteria (Active buses)
Facilities - Buildings Are the District’s facilities expenditures comparable to peers? Recommendation: Increase Rental Revenue or sell/donate the Sugarcreek Elementary building A district owned building that is not being used by the district for its ► operations The District rents out the building to the Greene County ESC and other ► community organizations. It is not fully recouping its cost of ownership.
Rented Building Analysis (FYE 2019)
Facilities – Maintenance Plan Is the District’s capital planning efforts consistent with leading practices? Recommendation: Create a preventative maintenance plan (informs capital plan) Developing and implementing an effective preventative maintenance ► program would ensure that the District receives the maximum useful life of its assets and that BSLSD properly allocates resources for maintenance and replacement. Can also inform the capital plan in Recommendation 2 ►
Facilities - Maintenance Are the District’s facilities expenditures comparable to peers? Recommendation: Develop a Purchasing Process for Maintenance and Repair Services ► BSLSD should develop a formal purchasing process to reduce the risk of overpaying for maintenance services. As a part of this process, it should ensure that services are obtained at the best value by requesting quotes, or by utilizing competitive bidding, when appropriate.
Escalation Recommendations Needed to Achieve Solvency Even after implementing all preceding recommendations, the District’s ► November 2019 five-year forecast would still project a cumulative deficit of approximately $5.8 million, or an annual average of approximately $1.5 million. Forecast FYE Forecast FYE Forecast FYE Forecast FYE Forecast FYE 2020 2021 2022 2023 2024 Original Ending Fund Balance $3,095,550 $1,273,634 ($1,893,626) ($6,187,181) ($11,653,982) Cumulative Balance of Recommendations 1-11 $0 $1,093,178 $2,661,868 $4,248,119 $5,848,691 Revised Ending Fund Balance with R.1-R.11 $3,095,550 $2,366,812 $768,242 ($1,939,062) ($5,805,291)
Escalation Options Option 3 Option 2 Option 1 Eliminating 16.0 FTE Continue the base Implementing a 10.5 teaching positions salary and step percent could save the across-the-board freezes through FYE District an average staffing reduction 2024 could save the of $1,467,800 starting next school District an average year. This option could annually . of $851,300 save the District an annually. average of $1,512,000 annually.
Impact of Performance Audit on FYF Forecast FYE Forecast FYE Forecast FYE Forecast FYE Forecast FYE 2020 2021 2022 2023 2024 Original Ending Fund Balance $3,095,550 $1,273,634 ($1,893,626) ($6,187,181) ($11,653,982) Cumulative Balance of Recommendations 1-11 $0 $1,093,178 $2,661,868 $4,248,119 $5,848,691 Revised Ending Fund Balance with R.1-R.11 $3,095,550 $2,366,812 $768,242 ($1,939,062) ($5,805,291) Cumulative Balance of Recommendation 12 $0 $1,451,400 $2,902,800 $4,354,200 $5,805,600 Revised Ending Fund Balance with All Recommendations $3,095,550 $3,818,212 $3,671,042 $2,415,138 $309
Performance Audit Website
Performance Audit Website
Ohio Performance Team 88 E. Broad St. Columbus, Ohio 43215 Mark Ingles performance@ohioauditor.gov
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