Question: Could you provide me direction on cash oversight responsibilities of a COE? I have information on “dry period financing,” but am interested in how much or how little a COE is legally required to monitor a district's cash as well as how some county offices may have instituted procedures to expand their oversight role.
Response: County offices are responsible for monitoring and providing oversight of the fiscal health and viability of the school districts in their county. Individual counties may have different mechanisms for meeting their oversight responsibilities, but cash flow analysis should be part of any assessment of fiscal health and is implicit in various legal statutes. Cash flow analysis is a key indicator of the current and future solvency of a district and therefore a critical aspect of oversight.
FCMAT’s Fiscal Procedures Manual outlines 26 procedures and adopted standards that are required by California Education and Government Codes. The manual is intended as a guide, not a mandate, and can be used by COEs in California to assist in the monitoring activities required by AB1200. One copy was sent to each county office. However, the information is available and downloadable on our Web site, fcmat.org.
Section P-010 of the manual specifically relates to cash and page 5 of that section outlines county office responsibilities.
County offices normally receive the county treasurer’s reports on the cash balances for each district in the county. In some counties, county office staff then reconciles the specific district’s cash account to the county treasurer’s cash balances. In others, the county treasurer’s reports are simply forwarded to the specific districts and district staff reconciles their general ledgers to the county treasurer reports. Education code does not require counties to reconcile the cash accounts themselves. Those that do are providing a service to their districts, but at the same time, are able to use the reconciliations as a tool in fiscal oversight. The counties that do not do the reconciliations will often request a copy of the district’s reconciliation so that they can still perform the AB1200 responsibility of the district’s cash flow.
County offices may also monitor cash balances of individual districts as often as they feel necessary (daily, weekly or monthly) in order to ensure there is adequate cash to meet expenditure needs. County offices may also assist districts with TRANs transactions to ensure the funds are drawn at the correct time to satisfy obligations.
2/18/05
