Report 2021-108 Recommendation 2 Responses

Report 2021-108: Bellflower Unified School District: Has Not Used Its Significant Financial Resources to Fully Address Student Needs (Release Date: June 2022)

Recommendation #2 To: Bellflower Unified School District

To ensure that its board has a clear understanding of the district's financial position and of the unassigned funds available for programs and services for students, Bellflower should, by August 2022, revise its process for presenting its budget to the board for approval. The revised process should require district staff to present a financial overview that compares year-to-date budget amounts to year-to-date actual spending amounts.

Annual Follow-Up Agency Response From December 2023

The District has provided the Board and will continue to provide the Board with quarterly reports that provide actual expenditures that have occured year to date compared to year to date budgeted amounts. The reports provide what the projected year totals are, what has actually been spent as of the certain date and what percentage that is of the budgeted amount. This allows the Board to see where we are with expenditures year to date based on the reporting time captured. All of the presentations will also be shared with educational partners via our weekly newsletter when presented.

California State Auditor's Assessment of Annual Follow-Up Status: Pending

Bellflower did not substantiate that it has fully implemented the recommendation, nor did it provide evidence that it revised its process for presenting its budget to the board for approval. Although the district provided its board with the board-approved operating budget and the total projected expenditures for fiscal year 2023-24, as well as actual expenditures as of a point in time during the fiscal year, Bellflower did not provide year-to-date budget amounts. Thus, it could not compare its year-to-date actual spending amounts against the year-to-date budget amounts.

1-Year Agency Response

At its June 8, 2023 Board meeting the Board was presented with the proposed budget. Slide 17 of the attached presentation showed year to date actuals along with a predictive forecast of what we believe the year may end at.

California State Auditor's Assessment of 1-Year Status: Pending

We reviewed the district's presentation of its fiscal year 2023-24 proposed budget that was attached to the June 9, 2023 BUSD News and found it did not include the information we recommended. Although the district provides predictive expenditure information to its board, the district did not include year-to-date budget amounts. Without year-to-date budget information, the board does not have a clear understanding of the district's current financial position compared to its planned expenditures.

6-Month Agency Response

During the first interim reporting presentation the Board was presented with information which compares year to date budget amount to year to date actual spending. The ending fund balance breaks down all committed funds, whether they are restricted or Board committed as well as any funds that are unassigned. The Board is shared what may be the ending fund balance should all proposed board approved budgeted expenditures come to fruition and what the ending fund balance may be using predictive forecasting based on year to date trends of expenditures. This format of presenting budget information to the Board will be used throughout the budget cycle presentation.

California State Auditor's Assessment of 6-Month Status: Pending

The district could not provide evidence to substantiate its assertion that it provides its board with year-to-date budget amounts. Although the district provides predictive expenditure information to its board (as indicated in its response to recommendation 1), the district's first interim presentation to its board for fiscal year 2022-23 did not include year-to-date budget amounts; rather, the district included the annual budget amounts. Without year-to-date budget information, the board does not have a clear understanding of the district's current financial position compared to its planned expenditures.

60-Day Agency Response

During the June Board meeting in which the District presented the Board with the proposed budget, the District provides information regarding estimated actual information based on current year to date information. The District provided the Board with the current ending fund balance and identified the restricted amount vs. what is available. The District made recommendations based on current information regarding committing the funds and the Board took action.

California State Auditor's Assessment of 60-Day Status: Pending

Bellflower did not substantiate that the recommendation was fully implemented, nor did it provide evidence that it revised its process for presenting its budget to the board for approval. Although the district provided its board with estimated actual information as part of its 2022-23 proposed budget in June 2022, Bellflower used information from its second interim financial report that had been prepared several months earlier. Moreover, Bellflower's presentation did not compare year-to-date budget amounts to year-to-date actual spending amounts.

All Recommendations in 2021-108

Agency responses received are posted verbatim.