Audit and Finance Committee Meeting

Audit and Finance Committee meeting today at 4:30 p.m..  Agenda

From the minutes of the last meeting, fyi:

- on the Employee Benefits Contract with Sprague Israel Giles

Directors asked about the District’s history with Sprague Israel Giles, Inc. and Ms. Byrd- Pina confirmed there has not before been a review of the contract. She noted that the Assistant Superintendent for Business & Finance discovered the contract had not been reviewed by the Board or even staff in over 20 years, but it is over $250,000 so this review is required by Board policy. Mr. Gotsch spoke about seven agreements that will come to the Board. 

Directors asked why the contract was not flagged sooner and Mr. Gotsch explained the initial amount for the brokerage fee was less than $250,000 but the commission Sprague Israel Giles, Inc. collects brings the amount much higher than the $250,000 threshold. Mr. Gotsch and Ms. Byrd-Pina spoke about nuances that had not before been discussed. 

From the Board meeting agenda action item on this topic of Jan. 12, 2015:

Pursuant to Policy No. 6220, Procurement, contracts in excess of $250,000 require Board approval. The contract for Sprague Israel Giles is for $53,000.04 annually. This amount does not normally require Board approval. However, industry practice is that firms providing benefits administration and related broker services earn a commission for its brokerage services directly from the health care insurance providers. These commissions range from approximately .75% to 1% of total costs (approximately $50 million), which means a commission in the range of $375,000 to $53500,000 annually. When the commissions are added to the benefit administration cost, staff is of the opinion that this arrangement should be day-lighted and the contract approved by the Board.

- on paying for JSCEEE

Kathie Technow spoke about the sales of multiple buildings to pay for the John Stanford Center for Educational Excellence (JSCEE) building, noting the Series B bonds have been paid off in full but there are outstanding payments due on the Series A bonds. Ms. Technow explained that when the plan was initially established, savings in the General Fund were to service the debt, later and currently money was transferred from the Capital Eligible Program (CEP) to the Debt Service Fund. She confirmed that while this transaction was legal and allowable, it was not in-line with the District’s initial plan to pay for the building

- on WSS

Mr. Gotsch noted that the Superintendent has reserved the right to make changes to the funding model and reprioritize its objectives as appropriate. 
He spoke about the extensive experience Dr. Nyland has with Washington State funding models.

Directors noted that Seattle is not included in the Washington State allocation model so compensation for Seattle teachers is not reflected. Directors spoke about how this negatively affects new teachers. Directors asked that conversations about this happen before labor negotiations do. 

Directors asked that there be nothing less than 1.0 FTE teachers in schools and that the “rules” be clear to school staff and the public. Ms. Sebring spoke about work her team is doing to develop a citizens’ guide in upcoming years so that the public is aware of the budget development process and the budget decision-making process. Mr. Gotsch spoke about ad hoc conversations that routinely happen with principals, parent groups, and other stakeholders in the meantime. 

Today's meeting agenda items include:

- Garfield/South Shore Property exchange with Parks.
- Conveyance by Deed of Public Land at Arbor Heights Elementary School (English) - no attachment available
- State and Federal Grants/Title 1 Annual Report - worthy, if less than clear, reading.

Executive Session at end of meeting. 


Grants Dropping said…
I'm new to this, but, am I missing something, or are they projecting a nearly 20% drop in grants (a loss of $13.4M, dropping from $69.3M to $55.9M) in their budget? Isn't that the wrong direction? Shouldn't there be some discussion of how we can afford such a large drop and what is responsible?
mirmac1 said…
Re: Fed and State Grants Summary

Interesting that all the RTTP grants show $zero$. That's right. Last year's was the "start-up" funding Arne and his tools CCER dribbled our way to launch their new shiny things.

Now staff blows smoke to suggest that there may be "no-cost extensions' for next year. What does that mean? No cost to Arne or Gates? But lot's of cost to SPS because of the pricey STR? Is Emerson's wrap-around program just going to pay for itself? Is the writing on the wall that IB will get zero? Same with HSGI and TIF. What does a "no-cost extension" mean? Tell us how much SPS funding will go towards sustaining these things.
Anonymous said…
@ mirmac1, a no-cost extension typically means that the grant-funded period is extended so that the grantee can finish the work--and often the billing--they were supposed to do. If you are nearing the end of a grant's contract period and haven't spent all the money yet and still have work to do, you'd probably want a NCE so you could wrap it up. If you hadn't completed the work yet but did NOT have any money left to do it, you probably would NOT ask for a NCE. In that case you'd probably go the "sorry, we couldn't do all we thought we could for that amount of money" route.

My best guess that any NCEs in the RTTP section would mean grant money listed in the current year's column would be unspent this year, so would move into next year's if they got the NCE.

NCE's aren't about extending the project beyond what the grant intended. If you had a grant-funded pilot project, for example, then wanted to implement it longer term, you'd likely look for other internal/external funding to sustain/replicate/expand it.

mirmac1 said…
Thank you HF. I am really interested in what RBHS and CHIHS have to say about underspending funds for IB implementation and support. They have expressed concerns about continued funding. The budget and expenditures for RTTT projects should be made clear. It appears every RTTT Road Map project fell short.

My question is what internal funding will now go towards the RTTT Road Map aspirational projects? And what new shiny things do the FED and Gates intend to fund.

All this energy for efforts that ultimately fell short. There must be some colorful charts somewhere showing it was money well spent. I'm sure there are some that should be dropped. Likewise there are those that should carried through. If so, who's going to pay for that.
mauriceavery said…
That is really great dear; I also wish to attend this meeting. My friend also told me that DR. Aloke Ghosh is also going to attend this event. I have heard a lot about him and his skill’s, so if it is true it is going to be a great experience for me to be part of this event.

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