PUBLIC PRESENTATION JANUARY 30, 2020 The Ohio Performance Team - - PowerPoint PPT Presentation

PUBLIC PRESENTATION JANUARY 30, 2020

Over 400 Performance Audits Follows Generally Accepted Government Auditing Standards Started in 1995

The Ohio Performance Team

What is a Performance Audit?

Performance audits provide elected officials and government employees with an

• bjective, third-party analysis of their
• perations to help them:

Improve Performance Reduce Costs Make Informed, Data-Driven Decisions

Performance Audit Phases

Field Work Analysis and conclusions

• Detailed work

conducted to deliver

• n the audit plan

Reporting Written report

• Client report review to

ensure information is factually correct and presented fairly

Planning

Audit plan

• objectives or areas of

analysis

Deficits starting in FYE 2021 Total projected deficit of $10.8 million Projected in the May five-year forecast

Why We’re Here

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

Phase 1 & 2 Cuts

• The Board was proactive
• n its budget deficits
• 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

Definition

Acknowledge significant accomplishments or exemplary practices.

Recommendations

Peer Group Districts

Are budgeting and forecasting practices comparable to leading practices?

Forecasting and Budgeting 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

Is the District’s capital planning efforts consistent with leading practices?

Develop a Formal, Multi-year Capital Plan

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.

Is the District’s General Fund subsidy of extracurricular activities appropriate in comparison to peers?

Extracurricular Activities

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

Are the District’s collective bargaining agreement (CBA) provisions comparable to the peers and ORC minimums?

Collective Bargaining Agreements

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

Are the District’s insurance benefits comparable to industry standards?

Insurance - Vision

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

Are the District’s bus replacement practices consistent with leading practices?

Bus Replacement

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)

Are the District’s facilities expenditures comparable to peers?

Facilities - Buildings

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

• perations

►

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)

Is the District’s capital planning efforts consistent with leading practices?

Facilities – Maintenance Plan

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

Are the District’s facilities expenditures comparable to peers?

Facilities - Maintenance

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

• btained 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 2

Implementing a 10.5 percent across-the-board staffing reduction starting next school

• year. This option could

save the District an average of $1,512,000 annually.

Option 3

Eliminating 16.0 FTE teaching positions could save the District an average

• f $1,467,800

annually.

Option 1

Continue the base salary and step freezes through FYE 2024 could save the District an average

• f $851,300

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