ARTICLE VI. FINANCES
Section 1. Fiscal Management.
The Board holds a position of public trust and accountability requiring it to be a good steward of funds received by the District, and to manage and operate the District in an efficient and effective manner. The District shall comply with all applicable federal and state laws, rules and regulations relative to the fiscal management of the District, including, but not limited to, the Uniform Budgeting and Accounting Act, MCL §141.421, et seq.
The Superintendent shall develop financial processes, procedures and internal controls to ensure the proper accounting of all District funds received and expended by the District in accordance with generally accepted accounting principles and applicable law. The Superintendent shall ensure that the Board receives in a timely manner monthly financial statements and reports, quarterly reports, and any other financial reports necessary or requested by the Board.
Section 2. Deposit of School Funds.
At the first regular meeting of the fiscal year, the Board shall designate the bank(s) or trust companies in which the funds of the District shall be deposited. Within three (3) business days after it receives funds, the treasurer shall deposit or cause to be deposited, funds of the District in a bank, credit union or other eligible financial institution authorized by the Board.
Section 3. Annual Budget and Fund Equity.
The Board is legally required to adopt an annual budget prior to July 1 of each year for the upcoming fiscal year. The budget is based on projected student enrollment and includes a statement of anticipated revenues from all sources and anticipated expenditures by the District. The annual budget shall be prepared and published in conformity with GASB 54. The Board may establish a minimum fund balance goal consistent with applicable law.
The Superintendent is responsible for preparation of the proposed annual budget and timely presentation to the Board. The Board shall hold a public hearing on the proposed budget in May/June of each year as required by law. The final adoption of the proposed annual budget shall be made by the Board after completion of the public hearing, but no later than June 30.
On a quarterly basis, the Superintendent shall inform the Board of actual or anticipated budget variances and the reason(s) for the budget variances. The Superintendent shall prepare amended budgets for the Board’s consideration and adoption based on the budget variances, as necessary.
The Board may establish priorities for the District on a short-term, intermediate and long-range basis. The Board encourages the Superintendent to develop a rolling, detailed three (3) year forecast of estimated revenues, expenditures and fund balance, to be reported annually to the Board during its June Board meeting.
Within 30 days after the Board adopts its annual operating budget for the upcoming fiscal year, or adopts a subsequent revision to or amended budget, the District shall make available to the public all of the information required under federal and state law, through a link on its website home page in a form and manner prescribed by the Michigan Department of Education. The Superintendent shall ensure that the District complies with all federal and state reporting requirements.
Section 4. Grant Funds.
The Board encourages the solicitation and use of grant funds to enhance the District’s educational program, school environment and opportunities for students. The Superintendent, administrators and staff are encouraged to identify, evaluate and apply for grants that will support the District’s programs, goals, projects, and priorities. The Superintendent must approve each grant proposal prior to its submission and the Board must approve and accept all grants offered to the District.
The Superintendent is responsible for the efficient and effective administration of grant funds. The financial management and administration of grants must adhere to all applicable federal, state and local laws, rules and regulations, any grantor rules, regulations and conditions of the grant award, and the District’s policies and administrative guidelines, and shall comply with OMB Circular A-87 and EDGAR (part 76) regarding allowable costs for the use of federal grant funds.
Section 5. General Purchasing.
In order to maintain effective control over the purchase of supplies, materials and equipment for the District, the purchase of all supplies, materials and equipment shall comply with all applicable Board policies, as well as all applicable State and Federal laws, rules and regulations.
It is the general policy of the Board that the purchase of all supplies, materials and equipment be at the lowest possible cost in the best interest of the District and all purchases must be within budget allocations. All procurement processes should use good administrative practices and judgement and free of any real or apparent conflict of interest. All procurements are to be conducted in a manner which provides open competition as required by law. The lowest responsible bidder shall generally be awarded the contract; however, the Board reserves the right to accept any bid/proposal that it feels is in the best interest of the District.
If the reasonably anticipated purchase price for the supplies, materials or equipment exceeds the State of Michigan competitive bidding threshold, as adjusted annually, a procurement process with competitive bids/proposals is required. However, competitive bids/proposals are not required for the purchasing of food unless the food purchased in a single transaction costs $100,000 or more. Board approval is required for purchases over the State of Michigan competitive bidding threshold, as adjusted annually.
Purchases made using competitive bids provided through the State of Michigan programs, other consortiums, or cooperative bids shall satisfy the requirements of this Policy, unless applicable State or Federal law requires otherwise.
The Board reserves the right to: i) accept or reject any and all bids/proposals, in whole or in part; ii) waive any informalities or irregularities in the procurement process or a bid/proposal; iii) award the contract to other than the lowest bidder.
Section 6. Purchasing with Federal Funds
In order to maintain effective control over the purchase of supplies, materials, equipment and services with Federal monies or under a Federal grant, the District shall follow all applicable Federal laws, regulations and standards, as well as all applicable Board policies and applicable State laws, rules and regulations.
It is the general policy of the Board that the purchase of all federally funded supplies, materials, equipment and services be at the lowest possible cost in the best interest of the District and all purchases shall be within budget allocations. All procurement processes shall use good administrative practices and judgment and be free of any real or apparent conflict of interest. All procurements are to be conducted in a manner which provides open competition. The lowest responsible bidder shall generally be awarded the contract; however, the Board reserves the right to accept any bid/proposal that it feels is in the best interest of the District.
When purchasing supplies, materials or equipment with Federal monies or under a Federal grant, the procurement processes shall also be in accordance with and follow Section 5 – General Purchasing.
When procuring services with Federal monies or under a Federal grant, if the reasonably anticipated cost is less than $150,000, then the District shall contact a reasonable number of potential vendors and obtain informal written quotes for the services from at least three (3) vendors, to the extent possible. If the reasonably anticipated cost for services which will be funded by Federal monies or under a Federal grant is at or over $150,000, competitive bidding shall be used for the procurement of those federally funded services. If it is determined that a formal competitive process for the procurement of services costing less than $150,000 is in the best interests of the District, the District may use an appropriate competitive bidding process to obtain bids/proposals for the services.
Procurement of federally funded supplies, materials, equipment or services through solicitation of a proposal from only one source may be used only when one or more of the following circumstances apply:
• The item can be verified to be only available from a single source;
• The public necessity or emergency will not permit a delay resulting from the competitive bid process;
• A noncompetitive bid/proposal is expressly authorized by the awarding agency; or
• After solicitation of a number of sources, competition is determined inadequate.
The Board reserves the right to: i) accept or reject any and all bids/proposals, in whole or in part; ii) waive any informalities or irregularities in the procurement process or a bid/proposal; iii) award the contract to other than the lowest bidder.
Section 7. Construction.
A. General Guidelines
1. The Superintendent shall develop an efficient system for the construction of new school buildings, and additions to, repair or renovation of, or energy conservation improvements to existing school buildings, and shall develop and implement administrative rules and procedures for District personnel regarding the same, that are in compliance with all applicable laws and this policy. All procurement processes should use good administrative practices and judgement and free of any real or apparent conflict of interest. All procurements are to be conducted in a manner which provides open competition.
2. Before commencing construction of a new school building, or addition to or repair or renovation of an existing school building, the Board of Education shall obtain competitive bids on all the materials and labor required for the complete construction of a proposed new building or addition to or repair or renovation of an existing school building.
3. Subsection A(2) of this section does not apply to the following:
a. Repair work normally performed by School District employees;
b. Construction of a new school building, addition to or repair or renovation of an existing school building if the total cost for the materials and labor costs less than the State of Michigan Competitive Bidding Threshold; and
c. Emergency Repairs to School District Buildings. However, such emergencies must arise as a result of circumstances which if not timely repaired could affect the health, safety or welfare of the School District’s students, staff or property. All emergency repairs must be reported to the Board after repair and should be ratified by the Board at its next regularly scheduled Board meeting.
B. Bidding Procedures
1. Construction projects where the materials and labor cost less than the State of Michigan Competitive Bidding Threshold may be made without obtaining competitive bids, provided that such procurement shall be made in accordance with School District Administrative Guidelines and applicable law. Projects may not be divided into subunits or separate contracts for the sole purpose of avoiding the State of Michigan Competitive Bidding Threshold or the bidding requirements of this Paragraph.
2. Construction Projects where the materials and labor cost an amount equal to or greater than the State of Michigan Competitive Bidding Threshold
a. The Board shall advertise for bids by placing an advertisement for bids at least once in a newspaper of general circulation in the area where the building or addition is to be constructed or where the repair or renovation of an existing building is to take place and by posting an advertisement for bids for at least two (2) weeks on the website designated by the State of Michigan and maintained for this purpose.
b. The advertisement for bids shall do all of the following:
i. Specify the date, time and location by which all bids must be received by the Board;
ii. State that the Board will not consider or accept a bid received by the Board after the date and time specified for bid submission;
iii. Identify the time, date, and place of a public meeting at which the Board, or its designee, will open and read aloud each bid received by the Board by the date and time specified in advertisement; and
iv. State that the bid shall be accompanied by a sworn and notarized statement disclosing any familial relationship that exists between the owner or any employee of the bidder and any member of the Board or the Superintendent of the School District. The Board shall not accept a bid that does not include this sworn and notarized disclosure statement.
c. The Board shall require each bidder for a contract under this Policy to file with the Board security in an amount not less than 1/20 of the amount of the bid conditioned to secure the School District from loss or damage by reason of the withdrawal of the bid or by the failure of the bidder to enter a contract for performance, if the bid is accepted by the Board.
d. The Board shall not open, consider, or accept a bid that the Board receives after the date and time specified for bid submission in the advertisement for bids as described in Subsection B(2)(b) of this section.
e. A a public meeting identified in the advertisement for bids described in Subsection B(2)(b) of this section, the Board, or its designee, shall open and read aloud each bid that the Board received at or before the time and date for bid submission specified in the advertisement for bids. The Board may reject any or all bids, and if all bids are rejected, shall re-advertise in the manner required by this Policy.
f. Any procurement which ensues from a competitive bid solicitation shall be awarded to the lowest responsible bidder, and the purchase shall be approved by the Board of Education.
g. Any construction projected funded in whole or in part by Federal monies or under a Federal grant, the School District must follow all applicable Federal laws, regulations and standards, as well as all applicable Board policies and applicable State laws, rules and regulations.
h. All solicitation documents issued by the School District shall reserve in favor of the School District:
- The right to accept or reject any or all bids, in whole or in part;
- The right to waive any irregularities or informalities contained in any response/proposal to a bid solicitation to the extent not prohibited by law; and
- The right to accept a bid other than the lowest bid.
Section 8. District Credit Cards.
The Board of Education recognizes that bank credit cards offer a convenient, efficient method of purchasing goods and services for the District. The Superintendent shall designate District employees authorized to use District credit cards for official District related purposes only. The Board authorizes a limit of $5,000.00 for each credit card. The Superintendent shall develop administrative guidelines and internal controls regarding the use of District credit cards.
All approved card holders must abide by the administrative guidelines and procedures for the use of credit cards. All purchases using a District card must be made by the individual to whom the card is issued, and a detailed report with the receipt(s) of the purchase must be submitted to the business office within five (5) business days of the purchase(s). The card may only be used for the purchase of goods or services for the official business of the District, and may not be used for purchases for personal purposes or cash advances. Under no circumstances shall the card be used to purchase alcohol, personal items or services, or personal entertainment. All invoices/statements must be approved by the Superintendent prior to payment. The balance, including any applicable interest, shall be paid within not more than sixty (60) days of the initial invoice/statement date. Card holders shall immediately surrender their card upon request of the Board or the Superintendent, or upon separation from employment with the District. A lost or stolen card must be immediately reported to the Superintendent.
Any unauthorized use or misuse of the credit card by a District employee may result in disciplinary action, to and including termination.
Section 9. Investments.
Prudent oversight of the District’s funds by the Superintendent is required. The Superintendent is responsible for making prudent investment decisions of the District’s funds that are not speculative, risky or subject to extreme volatility. The Superintendent shall develop and implement procedures and internal controls to protect the District’s investments. The procedures must comply with the requirements of the Governmental Accounting Standards Board (GASB) and the Michigan Revised School Code.
The financial reports submitted to the Board on a quarterly basis shall disclose the District’s investments with a summary of allocation of assets, credit, investments and risks to the District’s investments in accordance with generally accepted accounting principles.
Investment professionals or advisors utilized by the District shall be approved by the Board in advance of any professional advice or work done on the District’s behalf, and must be advised of the School District’s investment requirements and restrictions. All investment professionals utilized by the District must meet any required licensing, certification and bonding requirements under state and federal laws, rules and regulations and maintain insurance in the type and amount standard in the industry.
Section 10. Risk Management.
The Superintendent shall be responsible for developing and maintaining a risk management program for the District. The program shall contain methods and procedures for identifying, reducing and eliminating risk and, where prudent and feasible, providing for the purchase of insurance.
Section 11. Audit.
State law requires an annual audit of all accounts of the District by an independent, certified public accountant selected by the Board. The audit shall be conducted in accordance with generally accepted auditing and accounting standards. The audit shall be presented to the Board at a public meeting prior to being filed with the Michigan Department of Treasury and any other reporting entities required by state and federal law.
The auditor shall conduct single audits of grants as required by state and federal law, or the terms and conditions of the grant.
Section 12. Fixed Assets/Inventory.
The Superintendent shall develop and maintain a fixed asset/inventory procedure for equipment and supplies purchased for or on behalf of the District or donated to the District. Equipment is tangible personal property that has a useful life of more than one (1) year and an acquisition cost of $1,000.00 or more. All equipment purchased should be properly tagged and inventoried in accordance with the fixed asset/inventory procedure. Equipment purchased with federal funds should be tagged and inventoried as such and used for the specified purpose only. Disposal of equipment purchased with federal, state or local grant funds must be done in accordance with applicable federal and state laws, rules and regulations. The fixed asset schedule shall be updated on a regular basis to reflect purchases and dispositions of assets.
Section 13. Surplus Property.
The Superintendent shall identify to the Board at least annually District real and/or personal property that is no longer required for District purposes, and shall recommend procedures to be followed for the sale or disposition of such property. Board approval is required for the process to be used to sell or dispose of the property and the ultimate sale or disposition of the property.
Section 14. Bonded Employees.
The Board shall purchase a blanket or surety bond, in an amount proscribed by the Board, for District employees who routinely deal with funds or money of the District.
Section 15. Electronic Transactions.
The District may be a party to an Automated Clearing House (ACH) arrangement. The Superintendent shall be responsible for the District’s ACH agreement, including payment approval, account and compliance. All ACH invoices shall be approved prior to payment.
Section 16. Credit Card Holder Data Security.
If the District accepts credit card payments, all cardholder data obtained by District employees will be protected while in possession, will not be stored or maintained in any format, and will be destroyed when no longer required.
Section 17. Student Activity Fund Management.
All revenues and expenditures of student activity funds shall be properly processed through the internal accounting system of the District. All student activity funds shall be audited annually at the same time as the general fund budget.
Section 18. Fundraising.
Any fundraising projects carried on by a school organization shall require the approval of the Superintendent or building principal. All school-wide fundraising projects shall require the approval of the Superintendent. All fundraising projects shall be compatible with the District’s purpose, goals, and general community expectations. The use of the name of the District (either directly or through inference/affiliation) or the Board shall not be used in any fundraising efforts or on any materials, notices or advertising unless the Superintendent’s approval is received prior to such use.
Section 19. Vendor Relations.
All contacts by vendors shall be through the Superintendent or the purchasing department. Vendors shall not contact other District employees, Board members or administrators directly unless such contact is approved or authorized by the purchasing department.