Study Guide

Field 056: School Treasurer
Sample Constructed-Response Assignment

The following materials contain:

Sample Test Directions for the Constructed-Response Assignment

To complete this assignment, you will need to view the introduction and four documents provided as exhibits. To view the exhibits, click the "Exhibits" button above. A pop-up window will appear. The pop-up window can then be resized and/or repositioned on your screen so the information can be accessed while completing your response. To view all exhibits, click the tabs at the top of the pop-up window.

Each of your responses will be scored on the extent to which you effectively communicate a whole message to the specified audience for the stated purpose. You will be assessed on your ability to apply professional knowledge in your response. Your response to each assignment will be evaluated on the basis of the following criteria:

Be sure to write about the assigned topic. You may not use any reference materials. Your response must be your original work, written in your own words, and not copied or paraphrased from some other work. Remember to review what you have written and make any changes you think will improve your written response. The final version of your response should conform to the conventions of edited English as used in the United States.

Sample Constructed-Response Assignment

Use the information and exhibits below to complete the tasks that follow.

Task 1: District Financial Analysis—Local Tax Revenues

Based on the information provided, what is the most important trend regarding local tax revenues that will affect planning in the Sky City School District? Be specific in your answer, being sure to clearly identify the trend, likely consequences for the district as a result of this trend, and the evidence necessary to justify your answer.

Your response should be approximately 100–200 words and may be in the format of your choice (e.g., paragraph, list).

Task 2: District Financial Analysis—State Aid

Based on the information provided, what is the most important trend regarding state aid that will affect planning in the Sky City School District? Be specific in your answer, being sure to clearly identify the trends, likely consequences for the district, and the evidence necessary to justify your answer.

Your response should be approximately 100–200 words and may be in the format of your choice (e.g., paragraph, list).

Task 3: District Financial Analysis—Expenditures Related to Salaries

Based on the information provided, what is the most important trend regarding expenditures related to salaries that will affect planning in the Sky City School District? Be specific in your answer, being sure to clearly identify the trends, likely consequences for the district, and the evidence necessary to justify your answer.

Your response should be approximately 100–200 words and may be in the format of your choice (e.g., paragraph, list).

Task 4: District Financial Analysis—Expenditures Related to Employee Benefits

Based on the information provided, what is the most important trend regarding employee benefits that will affect planning in the Sky City School District? Be specific in your answer, being sure to clearly identify the trends, likely consequences for the district, and the evidence necessary to justify your answer.

Your response should be approximately 100–200 words and may be in the format of your choice (e.g., paragraph, list).

Task 5: District Financial Analysis—Budget Projection and Communication

After reviewing the information provided, you prepare a presentation for the local school board about the long-term sustainability of the Sky City School District's financial resources and how district operations may be affected in the future. In your response:

Your response should be approximately 100–200 words and may be in the format of your choice (e.g., paragraph, list).

Scenario and Exhibits for the Constructed-Response Assignments

Introduction

You are the newly hired school treasurer of Sky City School District, a suburban district enrolling approximately 2,700 students in six school buildings—four elementary schools, one middle school, and one high school. The district has a history of student achievement near statewide averages. Slightly fewer than half of students who graduate from Sky City schools go on to two- and four-year colleges. The district has a history of strong support from the local community.

The local economy is centered on light manufacturing and agriculture. A number of local firms reduced their workforces over the past several years, and one midsize manufacturing firm closed. Fewer than half of students who earn college degrees return to settle in the community. As a result, the population is becoming smaller and older, and the average household income declined by almost 5percent in the last four years. Approximately 21,000 people now live in Sky City, and student enrollment declined by more than 7percent over the last four years. Staff reductions have occurred largely through individual retirements, as most vacated positions are not filled. When you were hired, the school board noted these trends.

You review information regarding student enrollment and staff, revenues and expenditures from the past three years, and projections for the current year as you prepare for your first forecast presentation to the school board. Additionally, you will meet with the district leadership team to discuss how the financial forecast could affect district operations.

Exhibit 1: School District Data
 intentionally left blank 3 Years Ago 2 Years Ago Last Year Current Year
Total Student Enrollment 2,907 2,815 2,757 2,685
Students with Disabilities 375 12.9percent 372 13.2percent 364 13.2percent 369 13.7percent
Economically Disadvantaged 1,459 50.2percent 1,402 49.8percent 1,349 48.97percent 1,377 51.3percent
English Learners 13 0.45percent 15 0.52percent 15 0.54percent 17 0.63percent
Grades Kto2 690 682 657 639
Grades 3–5 665 636 615 587
Grades 6–8 687 674 669 651
Grades 9–12 865 823 816 808
Real Property Valuation $553,492,733 $553,416,970 $552,885,920 $552,265,208
Operating Spending per Pupil $10,815 $11,320 $11,894 $12,145
percent of Funds Spent on Classroom Instruction 59.4percent 60.0percent 60.2percent 58.4percent
Exhibit 2: School District Personnel Overview
 intentionally left blank 3 Years Ago 2 Years Ago Last Year Current Year
All Teachers (F T E) 184.5 181.2 177.7 176.4
Average Years of Experience 14.2 13.5 13.2 12.8
percent of Teachers with a Master's Degree or Higher 65.7percent 66.1percent 66.7percent 67.1percent
Building-Level Administrators 9.0 9.0 8.0 8.0
District-Level Administrators 3.0 3.0 3.0 3.0
Instructional and Student Support Staff (F T E) 70.2 68.5 64.8 66.7
Other Staff (F T E) 162.4 161.2 160.2 158.3
Exhibit 3: School District Revenues
 intentionally left blank 3 Years Ago 2 Years Ago Last Year percent Change Current Year
General Property Tax (Real Estate) $11,270,192 $11,049,208 $10,826,313 negative3.9percent $10,614,033
Tangible Personal Property Tax $777,041 $718,555 $708,444 negative8.8percent $660,390
Income Tax $4,726,718 $4,723,111 $4,724,333 negative0.05percent $4,697,350
Unrestricted State Grants-in-Aid $11,779,311 $11,763,113 $11,543,725 negative2.0percent $11,550,555
Restricted State Grants-in-Aid $404,634 $401,222 $412,865 2.0percent $416,811
State Share of Local Taxes $1,653,931 $1,643,404 $1,644,410 negative0.57percent $1,644,130
All Other Revenues $3,761,855 $3,679,665 $3,238,040 negative13.9percent $1,558,878
Total Revenues $34,373,681 $33,978,278 $33,098,130 negative3.7percent $31,142,147
Advances-In $61,113 $54,311 $0 negative100.0percent $55,605
All Other Financing Sources $247,440 $74,967 $55,508 negative77.6percent $26,000
Total Other Financing Sources $308,553 $129,278 $55,508 negative82.0percent $81,605
Total Revenues and Other Financing Sources $34,682,234 $34,107,556 $33,153,638 negative4.4percent $31,223,752
Exhibit 4: School District Expenditures
 intentionally left blank 3 Years Ago 2 Years Ago Last Year percent Change Current Year
Personnel Services $17,077,654 $17,233,311 $17,480,335 2.3percent $17,962,201
Employees' Retirement/Insurance Benefits $6,997,876 $7,200,556 $7,876,987 12.6percent $8,103,301
Purchased Services $5,379,818 $5,468,476 $5,540,827 3.0percent $4,571,665
Supplies and Materials $985,594 $969,831 $844,423 negative14.3percent $954,234
Capital Outlay $501,681 $317,202 $341,525 negative31.9percent $325,846
Other Objects $498,525 $676,889 $709,949 42.4percent $692,998
Total Expenditures $31,441,148 $31,866,265 $32,794,046 4.3percent $32,610,245
Operating Transfers-Out $0 $442,036 $0 0.0percent $0
Advances-Out $54,311 $0 $55,605 2.3percent $0
Total Other Financing Uses $54,311 $442,036 $55,605 2.4percent $0
Total Expenditures and Other Financing Uses $31,495,459 $32,308,300 $32,849,650 4.3percent $32,610,245
Financing Sources over start parentheses under end parentheses Expenditures and Other Financing Uses $3,186,775 $1,866,250 $544,378 negative83.0percent start parentheses 566,700 dollars end parentheses
Cash Balance July 1—Excluding Proposed Renewal/Replacement and New Levies $4,246,135 $7,432,910 $9,299,160 119.0percent $9,843,538
Cash Balance June 30 $7,432,910 $9,299,160 $9,843,538 32.4percent $9,276,838

Sample Strong Response to the Constructed-Response Assignment

Task 1: District Financial Analysis—Local Tax Revenues

The most important trend regarding local tax revenue is that Sky City's population has decreased over the past four years and many of those who have remained are earning less money. This is due, in large part, to the light manufacturing industry in the district having reduced their workforce and one of the businesses closing. Because of this, the tax revenues (including general property tax, tangible personal property tax, and income tax) have dropped over the last three years and will continue to do so for the upcoming year (close to $300,000 since last year). Since this has been the trend for the last few years, it is unlikely that this will change soon.

A likely consequence of this is that we will need to find a means of cutting expenses. It is possible that we could recoup some costs from "All Other Revenues" (ex., building space rental), or cutting staff through attrition, but these will not likely be enough to balance the loss of revenue. More than likely, we will need to look at cutting programs if the tax rate isn't increased.

Task 2: District Financial Analysis—State Aid

A trend regarding state aid is that Unrestricted State Grants-In-Aid continue to drop. This represents roughly a third of all revenues. A rise in Restricted State Grants-In-Aid cannot make up for declines in Unrestricted State Aid. Costs continue to rise (staff/faculty salaries, retirements, etc.) at higher rates than what these grants can cover. This trend will likely continue, as it has decreased for the past three years. While enrollment is also declining at Sky City, it does not indicate a decline in expenses or programs, as operating spending per pupil has increased more than 12percent over the past four years. This is likely due to increases in salaries and benefits, as well as the Consumer Price Index driving up the costs of goods and services.

We will need to find additional revenue or ways to cut costs. Most other sources, as illustrated in Total Other Financing Sources, could be increased with facility rental and the like, but this will not be enough to compensate for reduced aid long term. All options to avoid reducing programs and services should be explored.

Task 3: District Financial Analysis—Expenditures Related to Salaries

Expenditures related to salaries is a genuinely concerning trend. Salaries are responsible for more than half of Sky City's expenditures, as is often the case in school budgets. The district has not replaced teachers who have left or retired. While the total number of employees in the district has been reduced by 3.9percent over the past four years, personnel costs rose by 2.3percent during that time. Rising costs and less staffing is a troubling trend for all stakeholders.

To better understand the many factors involved in the scenario, the treasurer should request information from the superintendent and/or human resource manager about employee compensation, including union negotiations pursuant to the compensation scale. An example would include agreements about increased salary for post-bachelor's education. Another area to consider in looking to reduce salary costs might be to offer an early retirement incentive, which may cause a short-term hit to the budget but will allow new teachers to be hired at lower salaries, reducing costs in the long term. The treasurer may also need to review reducing non-instructional staffing levels to lower expenses, to see if that's feasible.

Task 4: District Financial Analysis—Expenditures Related to Employee Benefits

The trend of steadily rising retirement/insurance benefits is one of the most important trends that will affect planning. Retirement/insurance benefits represent almost one quarter of total expenditures. This is not unique, but what is concerning is that these costs rose by almost 16percent over four years. Adding to the concern is the fact that the last two years have seen the largest increases.

It is worth asking if the district's means of reducing staff (at least partially through individual retirements) has accelerated spending in this category. To better understand the factors involved with benefits/insurance, the treasurer should gather information about the binding agreements in place regarding benefits. It is reasonable to assume that while actions may be limited in the short-term, exploring viable options for the future is a necessary step. Seeking an increased contribution level, both during employment and after retirement, through contract negotiations could cut costs long-term. While this is never popular with unions, it might be more appealing than losing positions. Another option might be to shop for better pricing on insurance, including the possibility of pooling resources with neighboring districts to negotiate lower costs due to a larger pool of insureds.

Task 5: District Financial Analysis—Budget Projection and Communication

The central emphasis of this treasurer's presentation should be to be positive, reflecting on the community's support of the district, while also being transparent and truthful, making the community aware that significant cuts to staff and/or programs may be necessary in the future. While stating that the district is not yet in immediate danger, quick and careful planning, partnered with significant changes, will be necessary to remain solvent, as expenditure is outpacing revenues, and this does not appear to be changing. The district's cash balance is healthier than it was four years ago, but if current trends in revenue and expenditure continue, the cash balance will become increasingly lean and dipping into this balance would be a poor step as a regular practice, especially in light of current trends.

An additional piece of information that would be helpful in the treasurer's analysis of Sky City's long-term sustainability would be how the district has managed to lower its "Purchased Services" line during this time by 15percent and determining if this can this be replicated in other areas of the budget. Outsourcing educational programs has some positives but can drain a budget more than an on-campus program might.

Performance Characteristics

Responses are scored holistically based on the following performance characteristics:

Purpose The extent to which the response fulfills the assignment
Professional Knowledge The extent to which the response accurately and effectively applies relevant professional knowledge
Rationale and Support The extent to which the response provides sound reasoning and relevant, specific support

Scoring Scale

The four points of the scoring scale correspond to varying degrees of performance.

Score Point Score Point Description
4
 The "4" response reflects a thorough understanding of relevant knowledge and skills.
  • The response thoroughly fulfills the purpose of the assignment.
  • The response demonstrates an accurate and effective application of the relevant professional knowledge.
  • The response reflects sound, effective reasoning and provides high-quality, relevant support.
3
 The "3" response reflects a general understanding of relevant knowledge and skills.
  • The response largely fulfills the purpose of the assignment.
  • The response demonstrates a generally accurate application of the relevant professional knowledge.
  • The response reflects adequate reasoning and provides general, relevant support.
2
 The "2" response reflects a partial understanding of relevant knowledge and skills.
  • The response partially fulfills the purpose of the assignment.
  • The response demonstrates a partially accurate application of the relevant professional knowledge.
  • The response reflects limited reasoning and provides limited and/or partially irrelevant support.
1
 The "1" response reflects little understanding of relevant knowledge and skills.
  • The response fulfills little of the assignment.
  • The response demonstrates an inaccurate and/or ineffective application of the relevant professional knowledge.
  • The response reflects poor reasoning and provides little or no relevant support.
U
 The response is unrelated to the assignment, is unreadable, is primarily in a language other than English, or does not contain a sufficient amount of original work to score.
B
 There is no response to the assignment.