BP 3460 — FINANCIAL REPORTS AND ACCOUNTABILITY

Business and Noninstructional Operations BP 3460(a)

FINANCIAL REPORTS AND ACCOUNTABILITY

The Board of Education is committed to ensuring public accountability and the fiscal
health of the District. The Board shall adopt sound fiscal policies, and 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/Expending Authority)
(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. He/she 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.

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
County Superintendent of Schools 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 September 15, the Board shall approve and file with the County
Superintendent a statement of the District's unaudited actual receipts and expenditures
 BP 3460(b)
FINANCIAL REPORTS AND ACCOUNTABILITY (cont.)

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 Superintendent of Public Instruction. (Education Code 42100)

GANN APPROPRIATIONS LIMIT RESOLUTION

On or before September 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)

(cf. 9322 - Agenda/Meeting Materials)

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)

1. "Positive Certification" indicating that the District will meet its financial obligations
for the current fiscal year and two subsequent fiscal years

2. "Qualified Certification" indicating that the District may not meet its financial
obligations for the current fiscal year or two subsequent fiscal years

3. "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 County Superintendent using the state's sacs software, as prescribed
by the SPI. (Education Code 42130, 42131)
 BP 3460(c)
FINANCIAL REPORTS AND ACCOUNTABILITY (cont.)

If the District's certification is subsequently changed by the County Superintendent 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 Board or the
County Superintendent, the Superintendent or designee shall cooperate in the
implementation of any remedial actions taken or prescribed by the County
Superintendent 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 County Superintendent, 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 County Superintendent conducts a comprehensive
review of the District's financial and budgetary conditions after he/she has determined
that the District's budget does not comply with state criteria and standards for fiscal
stability, the Board shall review the County Superintendent's recommendations at a
public Board meeting. Within 15 days of receiving the report, the District shall notify the
County Superintendent and the SPI of its proposed actions on the recommendation.
(Education Code 42637)

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 County Superintendent to have a lack of going concern, any contract the District
enters into for auditing services must be approved by the County Superintendent.

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)
 BP 3460(d)
FINANCIAL REPORTS AND ACCOUNTABILITY (cont.)

No later than December 15, the report of the audit for the preceding fiscal year shall be
filed with the County Superintendent, 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.

Legal Reference:
EDUCATION CODE
1240 Duties of county superintendent of schools
14500-14508 Financial and compliance audits
17150-17150.1 Public disclosure of non-voter-approved debt
17170-17199.5 California School Finance Authority
33127 Standards and criteria for local budgets and expenditures
33128 Standards and criteria; inclusions
33129 Standards and criteria; use by local agencies
35035 Powers and duties of superintendent
41010-41023 Accounting system
41326 Emergency apportionment
41344 Repayment of apportionment significant audit exceptions
41344.1 Appeals of audit findings
41455 Examination of financial problems of local districts
42100-42105 Requirement to prepare and file annual statement
42120-42129 Budget requirements
42130-42134 Financial reports and certifications
42140-42142 Public disclosure of fiscal obligations
42637 County superintendent review of district's financial and budgetary conditions
42652 Revocation or suspension of warrant authority
48300-48316 Student attendance alternatives
GOVERNMENT CODE
3540.2 School district; qualified or negative certification; proposed agreement review and comment
7900-7914 Appropriations limit
16429.1 Local agency investment fund
53646 Reports of investment policy and compliance
CODE OF REGULATIONS, TITLE 5
15060 Standardized account code structure
15070 Submission of reports using standardized account code structure
15440-15451 Criteria and standards for school district budgets
15453-15464 Criteria and standards for school district interim reports
19810-19816.1 Audits
UNITED STATES CODE, TITLE 31
7501- 7507 Single audits of federal program funds
 BP 3460(e)
FINANCIAL REPORTS AND ACCOUNTABILITY (cont.)

Management Resources:
CSBA PUBLICATIONS
Maximizing School Board Governance: Fiscal Accountability, 2006
CALIFORNIA DEPARTMENT OF EDUCATION COMMUNICATIONS
New Financial Reporting Requirements for Postemployment Benefits Other than Pensions, February 26,
2007
Audit Resolution Process: Repayment Plans, December 8, 2000
FISCAL CRISIS AND MANAGEMENT ASSISTANCE TEAM PUBLICATIONS
Fiscal Oversight Guide for AB 1200, AB 2756 and Subsequent Related Legislation, September 2006
GOVERNMENTAL ACCOUNTING STANDARDS BOARD STATEMENTS
Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions, March 2009
Statement 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other
Than Pensions, June 2004
Statement 34, Basic Financial Statements and Management's Discussion and Analysis - For State and
Local Governments, June 1999
STATE CONTROLLER PUBLICATIONS
Standards and Procedures for Audits of California K-12 Local Educational Agencies (annual publication)
U.S. GOVERNMENT ACCOUNTABILITY OFFICE AND PRESIDENT'S COUNCIL ON INTEGRITY AND
EFFICIENCY (PCIE) PUBLICATIONS
Government Auditing Standards, 2011
Financial Audit Manual, revised 2008
U.S. OFFICE OF MANAGEMENT AND BUDGET CIRCULARS
A-133 Audits of States, Local Governments, and Non-Profit Organizations
WEBSITES
California School Boards Association: www.csba.org
California Association of School Business Officials: www.casbo.org
California County Superintendents Educational Services Association: www.ccsesa.org
California Department of Education, Finance and Grants: www.cde.ca.gov/fg
Education Audit Appeals Panel: www.eaap.ca.gov
Fiscal Crisis and Management Assistance Team: www.fcmat.org
41455 Examination of financial problems of local districts
42100-42105 Requirement to prepare and file annual statement
State Controller's Office: www.sco.ca.gov
U.S. Government Accountability Office: www.gao.gov
U.S. Office of Management and Budget: www.whitehouse.gov/omb

Chino Valley Unified School District
Policy Adopted: November 16, 1995
Revised: May 9, 2002
Revised: November 16, 2006
Revised: April 2, 2009
Revised: June 27, 2013