San Francisco Unified School District and County Office of Education
Board Policy 3460
Financial Reports and Accountability
This Board Policy applies to the San Francisco Unified School District and the County Office of Education.
The Board of Education is committed to ensuring public accountability and the fiscal health of the District. The Board shall adopt sound fiscal policies, oversee the District’s financial condition, and continually evaluate whether the District’s budget and financial operations support the District’s goals for student achievement.
(cf. 3100 – Budget)
(cf. 3110 – Transfer of Funds)
(cf. 3300 – Expenditures and Purchases)
(cf. 3430 – Investing)
(cf. 4143/4243 – Negotiations/Consultation)
(cf. 9000 – Role of the Board)
The Superintendent or designee shall ensure that all financial reports are prepared in accordance with law and in conformity with generally accepted accounting principles and financial reporting standards stipulated by the Governmental Accounting Standards Board and the California Department of Education (CDE). The Superintendent shall establish a system of ongoing internal controls to ensure the reliability of financial reporting.
(cf. 3400 – Management of District Assets/Accounts)
When required by law or the Board, the Superintendent or designee shall submit to the Board reports of the District’s financial status, including, but not limited to, any report specified in this Board policy or accompanying administrative regulation. When any such report must be approved by the Board prior to its submission to a local, state, and/or federal agency, the Superintendent or designee shall provide the report to the Board in sufficient time to enable the Board to carefully review the report and meet any applicable submission deadline.
The Board shall regularly communicate the District’s financial position to the public and shall use financial reports to determine what actions and budget amendments, if any, are needed to ensure the District’s financial stability.
(cf. 1340- Access to District Records)
If District conditions predict fiscal distress or indicate that the District might not be able to meet its fiscal obligations, the Board and Superintendent or designee shall act quickly to identify and resolve these conditions. The Board shall work cooperatively with the CDE to improve the District’s fiscal health and may contract with an external individual or organization to advise the District on fiscal matters.
Unaudited Actual Receipts and Expenditures
On or before October 15, the Board shall approve and file with the Superintendent of Public Instruction (SPI) a statement of the District’s unaudited actual receipts and expenditures for the preceding fiscal year. The Superintendent or designee shall prepare this statement using the state’s standardized account code structure (SACS) as prescribed by the SPI. (Education Code 42100)
Gann Appropriations Limit Resolutions
On or before October 15, the Board shall adopt a resolution identifying, pursuant to Government Code 7900-7914, the District’s estimated appropriations limit for the current fiscal year and the actual appropriations limit for the preceding fiscal year. Documentation used to identify these limits shall be made available to the public on the day of the Board meeting. (Education Code 42132; Government Code 7910)
Interim Reports/Certification of Ability to Meet Fiscal Obligations
The Superintendent or designee shall submit two interim fiscal reports to the Board, the first report covering the District’s financial and budgetary status for the period ending October 31 and the second report covering the period ending January 31. The reports and supporting data shall be made available by the District for public review. (Education Code 42130)
Within 45 days after the close of the period reported, the Board shall approve the interim report and certify, on the basis of the interim report and any additional financial information known by the Board, whether the District will be able to meet its fiscal obligations for the remainder of the fiscal year and, based on current forecasts, for the two subsequent fiscal years. The certification shall be classified as one of the following: (Education Code 42130, 42131)
- “Positive certification” indicating that the District will meet its financial obligations for the current fiscal year and two subsequent fiscal years.
- “Qualified certification” indicating that the District may not meet its financial obligations for the current fiscal year or two subsequent fiscal years.
- “Negative certification” indicating that the District will be unable to meet its financial obligations for the remainder of the fiscal year or the subsequent fiscal year.
The Superintendent or designee shall submit a copy of each interim report and certification to the California Department of Education (CDE) using the state’s SACS software, as prescribed by the SPI. (Education Code 42130, 42131).
If the District’s certification is subsequently changed by the CDE from a positive to a qualified or negative certification, or from a qualified to a negative certification, the Board may appeal the decision to the SPI within five days of receiving the notice of change. (Education Code 42131)
Whenever the District receives a qualified or negative certification from the State Superintendent of Instruction or the CDE, the Superintendent or designee shall cooperate in the implementation of any remedial actions taken or prescribed under the authority granted to him/her pursuant to Education Code 42131.
If the second interim report is accompanied by a qualified or negative certification, the Board shall, no later than June 1, provide to the, CDE, the State Controller, and the SPI a financial statement as of April 30 (“third interim report”) that projects the District’s fund and cash balances through June 30. (Education Code 42131)
At any time during the year when the CDE conducts a comprehensive review of the District’s financial and budgetary conditions after it has determined that the District’s budget does not comply with state criteria and standards for fiscal stability, the Board shall review the CDE’s recommendations at a public Board meeting. Within 15 days of receiving the report, the District shall notify the CDE and the SPI of its proposed actions on the recommendation. (Education Code 42637)
Audit Report
Pursuant to Education Code 41020, if the District has a disapproved budget, has received a negative certification on any budget or interim fiscal report during the current fiscal year or either of the two preceding fiscal years, or has otherwise been determined by the CDE to have a lack of going concern, any contract the District enters into for auditing services must be approved by the CDE.
By April 1 of each year, the Board shall provide for an annual audit of the District’s books and accounts. (Education Code 41020)
To conduct the audit, the Board shall select a certified public accountant or public accountant licensed by the State Board of Accountancy from among those deemed qualified by the State Controller. (Education Code 41020, 41020.5)
The Board shall not select any public accounting firm to provide audit services if the lead or coordinating audit partner having primary responsibility for the audit, or the audit partner responsible for reviewing the audit, has performed audit services for the District in each of the six previous fiscal years. (Education Code 41020)
No later than December 15, the report of the audit for the preceding fiscal year shall be filed with the CDE and the State Controller. (Education Code 41020)
Prior to December 15 whenever possible, but in no case later than January 31, the Board shall review, at an open meeting, the annual District audit for the prior year, any audit exceptions identified in that audit, the recommendations or findings of any management letter issued by the auditor, and any description of correction or plans to correct any exceptions or any issue raised in a management letter. (Education Code 41020.3)
The Board shall have an opportunity at the meeting to ask questions of the auditor and request further information about the audit findings.
Report on Expenditures of State Facilities Funds
When the District participates in the school facilities program pursuant to Education Code 17070.10-17079.30, the Superintendent or designee shall annually report a detailed list of all expenditures of state facilities funds, including interest, and of the District’s matching funds for completed projects until all such funds are expended. The report shall identify expenditures on a project-by-project basis, reflect completed projects that were reimbursed within that fiscal year, and clearly indicate the list of projects that have been completed. (Education Code 41024; 2 CCR 1859.104)
Audits of facilities projects shall be concluded within one year of project completion and shall be included as part of the District’s audit for the fiscal year in which the project is reported as completed. A project shall be deemed completed when any of the following conditions is met: (Education Code 41024; 2 CCR 1859.104)
- When the notice of completion for the project has been filed, all outstanding invoices, claims, and change orders have been satisfied, and the facility is currently in use by the District.
- Three years from the date of the final fund release for an elementary school project.
- Four years from the date of the final fund release for a middle or high school project.
Please note that compare references, or “cf”, refer to CSBA model policies and do not necessarily indicate that the San Francisco Unified School District has adopted the referenced policy.