Financial Responsibility Guide
Introduction
School board members have many responsibilities, but none is more important than financial oversight. This is often a challenge for individuals who are elected to serve, yet have little training or expertise in organizational finance. The Financial Responsibility Guide has been designed to assist board members who find themselves in exactly that situation. The guide begins with a discussion of the state public school finance system, gradually moves to areas of local district concern, and ends with specific financial legal issues that apply directly to board members as office holders. We hope you find this information useful as you serve in this most important capacity.
Table of Contents
Overview of the Texas School Finance System, by Catherine Clark, TASB Associate Executive Director for Governance Services
The Texas school finance system is based on a combination of local property tax and state funding. This section describes the breadth of the system, its limitations, and the challenges that must addressed in future years.
The Board’s Role in Financial Responsibility, by Bill Nemir, Director, TASB Leadership Team Services
School board members have a fiduciary duty to provide oversight regarding expenditures of taxpayer dollars. This section focuses on the processes board members use to effectively carry out that duty.
The Basics of Understanding School District Financial Statements, by Dominic Giarratani, Assistant Director, TASB Governmental Relations
Although school board members are not required to be experts in financial management, they do need a general understanding of the financial statements used in district management. This section provides a basic description of the standard financial statements used in the school district context.
Adoption of the School Budget and Tax Rate, by Cristina Ruiz Blanton, Staff Attorney, TASB Legal Services
Annual adoption of the budget and tax rate is essential to the operation of a school district. This section describes how the adoption process works and the board’s role in that process.
Understanding Bonds, by First Public
School districts often sell bonds to raise funds for facilities construction and repair. This section reviews the different types of bonds, as well as the board’s role in working with its financial management team.
The Board's Role in Risk Management, by Dubravka Romano, Associate Executive Director, TASB Risk Management Services
Unfortunately bad things happen; being prepared when they do is an essential function for the board. This section covers the key concepts in this important area of financial protection.
School FIRST and the Financial Solvency Review Process, by Paul Taylor, Director of Legal and Regulatory Affairs, TASB Risk Management Services
This section explains two key financial reporting systems between school districts and the State of Texas: the Financial Integrity Rating System of Texas (FIRST) and the Financial Solvency Review process.
School District Audits, by Mark McHargue, Staff Attorney, TASB Legal Services
Financial audits are key indicators of the district’s financial health. This section reviews the requirements of conducting an audit and offers valuable information regarding the selection of an auditor.
Fraud Prevention, by Joy Baskin, Director, TASB Legal Services
This section covers what board members can do to protect the district’s financial systems from fraud or financial abuse.
Financial Conflicts of Interest, by Leslie Story, Senior Attorney, TASB Legal Services
This section provides helpful information to assist board members in making sure any financial relationships that they or their relatives have with the district or district vendors are properly disclosed and reported.
Gifts to Public Servants, by Amy Magee, Senior Attorney, TASB Legal Services
This section explains what elected officials may and may not receive as gifts or other benefits.