The Board of Education (Board) expects the Superintendent to assure that the Cobb County School District (District) establishes financial guidelines and procedures that comply with generally accepted accounting principles, State Department of Education rules, and District expectations established in Board Policy SD-5 (Financial Planning/Budgeting).

A. PERSONNEL BUDGET:

    1. To protect the mutual trust between the Board of Education, the Superintendent, and

        employees of the District, the Superintendent shall, in Executive Session provided that

        this action does not attempt to violate any provision of the Georgia Open Meetings

        Act, discuss all personnel budget issues including any proposed changes to the

        compensation/structure including proposed bonuses, pay increases, and the addition

        or deletion of employee groups.

    2. In considering the implementation of specific personnel options (for instance the

        adequate staffing of a leadership academy, offering an enriched staff development

        program, or other improvements), the Superintendent must:

        (a) Disclose to the Board the potential financial and programmatic impact of such

             actions;

        (b) Identify other initiatives, including reaching target reserve levels, that may be    

             jeopardized as a result of funding proposed personnel issues.

        (c) Require specific Board action to hire in excess of those positions provided in the

             budget.

B. LOANS:

    1. District Borrowing:

       a. The District may incur indebtedness only when approved by the Board and then only

           in an amount specifically approved by the Board.

       b. Procedures:

           (1) The Board, as it deems necessary, may vote a resolution authorizing the

                 borrowing of money for District purposes. The aggregate amount of all such

                 loans outstanding at any one time shall not exceed 75% of the total income of

                 the Board from taxes collected by the Board in the preceding year.

           (2) The resolution authorizing the borrowing of funds shall, as a minimum, state:

                 (a) The amount to be borrowed;

                 (b) The length of time it is to be used;

                 (c) The rate of interest to be paid;

                 (d) The purpose for which it is borrowed; and

                 (e) The institution from which it is to be borrowed.

           (3) Such loans shall be payable on or before December 31 of each year.

           (4) The Board Chair and Superintendent shall execute the note(s) for money that is

                 authorized to be borrowed under the resolution passed by the Board (Board

                 Policy BDB [Board Officers]) and Board Policy BBA [Board Powers and

                 Responsibilities]).

    2. Loans to Schools:

         a. Eligibility:

             Before a loan can be made to a school, the school must meet the following

             "educational purpose" requirements:

             (1) Purpose of the loan must be to support a program that is part of the

                   educational curriculum;

             (2) Students must receive instruction in the program specified for the loan during

                   school hours; and

             (3) Students must receive credit toward graduation for participation in the program

                   specified for the loan.

         b. Guidelines:

             The following guidelines shall apply to loans:

             (1) Loans will be used for the purpose of assisting the program specified;

             (2) The maximum loan to a local school will not exceed $50,000; and

             (3) Loans will be repaid within five years with one-fifth of the loan due on each

                  anniversary of the loan date.

    3. Loans to Organizations other than Schools:

        The Board may not authorize a loan of District funds to private organization, such as

        Booster Clubs, PTAs, or other school support organizations (Administrative Rule KF

        (Use of School Facilities]).

C. FUND BALANCE:

    1. The unreserved fund balance shall not decrease from one fiscal year end to next fiscal

        year end unless approved by the Board.

    2. Operating reserve funds are to be used only for fiscal emergencies.

    3. Sound financial management shall be used in order to increase operating reserve until

        a one-month operating reserve objective is achieved.

D. FINANCIAL PRACTICES:

    1. On-time Payments:

        The District shall:

        a. Settle payroll and debts in a timely manner;        

        b. File accurate and on-time tax and other government ordered

            payments and financial filings.

        c. Not acquire real property for investment purposes; and

        d. Aggressively pursue receivables after a reasonable grace period.

    2. Purchasing:

        a. General Provisions:

            The Cobb County Board of Education (Board) expects the Superintendent and

            his/her staff to establish procedures for the procurement of supplies, equipment

            and services for the Cobb County School District (District) that complies with

            generally accepted accounting principles, District procedures and rules of the

            Georgia Department of Education. Specifically, the District shall make purchases

            that are consistent with the purchasing principles of:

            (1) Acceptable quality at lowest price;

            (2) Transparency in use of public funds;

            (3) Protection against conflict of interest;

            (4) Maximization of competition;
            (5) Equal and fair competition; and
            (6) Legal/regulatory compliance.

        b. Bid Process: 

            The Superintendent or designee shall set bid dates and opening time according to

            State rules. The District shall be represented by appropriate staff members at all

            bid openings. The staff member representing the District shall call the time for

            receiving bids closed at the time specified for the opening in the bid documents.

            Bids will not be accepted after the time specified has been called.

    3. Procedures: 

        The procedures developed and implemented by the Superintendent or designee shall:

        a. Provide for the consistent accountability of all District funds;

        b. Require that District personnel have itemized receipts for cash purchases and that

            other purchases be supported by purchase orders or contracts with payment made

            only upon receipt of original invoices;

        c. Require that District personnel not collect funds from students for expenditures that

           are included in the District budget;

        d. Require District personnel to maintain a clear audit trail from receipt of funds to

            disbursement of funds;

        e. Provide for an annual audit of student activity funds by either an internal or

            external auditor;

        f. Account for the disposition of surpluses or deficits from completed projects; and

        g. Provide for an annual audit of all District funds and the payment of costs for

            external auditors from the funds being audited.

    4. Board Approval:

        a. Individual Purchases/Expenditures:

           Specific Board approval shall be required for all purchases/expenditures greater

           than $200,000 except those purchases/expenditures specifically excluded by the

           Board. The Board may change its list of excluded items at any time and shall review

           the list as part of the annual budget adoption process.

        b. Aggregate Purchases/Expenditures:

            (1) Defined:

                 The term “aggregate expenditures” means the sum total of all expenditures for

                 the same product or service over the course of the fiscal year.

            (2) Required Approval:

                 Specific Board approval shall be required for all, whether or not included in the

                 Board-adopted budget, purchases/expenditures when the annual aggregate

                 becomes greater than $200,000 except for those purchases/expenditures

                 specifically excluded by the Board. The Board may change its list of excluded

                 items at any time and shall review the list as part of the annual budget
                 adoption process.     

        c. Contracts:

            Contracts are subject to the Quote/Bid/RFP process if the total expenditure or

            anticipated aggregate expenditure is $10,000 or more.

            (1) Approval:

                 All District generated contracts for construction or services require the following

                 approval:

                 (a) Construction Contracts:

                      1) Construction contracts in the amount of $25,000 or less shall be
                          approved by the Superintendent or appropriate Division head and
                           executed by the Superintendent or designee;
                      2) Construction contracts in the amount of $25,001 to $200,000 will be

                          approved by Coordination Record and executed by the Superintendent or

                          designee;
                      3) Construction contracts in excess of $200,000 will be recommended by
                          the Superintendent and approved by the Board of Education.
                          Superintendent or designee to execute contract.

                 (b) Performance Contracts/Contracted Services:

                      1) Performance Contracts/ Contracted Services less than $10,000 shall be

                          approved by a Cabinet Member;

                      2) Performance Contracts/ Contracted Services in the amount of $10,000 to

                          $200,000 shall be approved by an Executive Cabinet Member and the

                          Superintendent;

                      3) Performance Contracts/ Contracted Services great than $200,000 shall
                          be approved by the Board of Education.

            (2) Legal Review:

                 (a) Contracts requiring Board approval by law, Policy, Rule or regulation shall

                       be:

                       1) Reviewed by the Board Attorney; and

                       2) Submitted for Board approval as part of the agenda at a regular or

                            called Board meeting.

                  (b) Contracts other than those of standard form which do not require Board

                       approval shall also be reviewed by the Board Attorney and Superintendent

                       or designee and, if warranted, submitted to the Board for review.

                  (c) A copy of each standard contract form used by the District shall be filed in

                      the office of the Board Attorney and shall be reviewed annually by the

                      Board Attorney and the Superintendent or designee.

            (3) Signatures:

                 (a) After contracts requiring Board approval have been approved, they shall be

                      signed by the Board Chair unless the Board authorizes the Executive

                      Secretary to sign in place of the Chair.

                 (b) The Superintendent or designee shall sign all contracts.

            (4) Vendor Performance Evaluation:

                 (a) Routine Evaluation:

                      Vendor performance, including those vendors providing contracted services,

                      will be routinely evaluated using procedures provided by Procurement

                      Services. Vendor evaluation shall serve the following purposes:

                      1) To identify those vendors who provide good service to students,

                          employees, schools and the District through the provision of goods
                          and/or services to meet identified needs; or

                      2) To document problems experienced with a vendor.

                 (b) Required Evaluation:

                      Procurement Services shall assist employees, schools or District leadership

                      to assure a vendor evaluation is completed any time a contracted vendor is

                      unable to fulfill the terms of their contract.

    5. Line Items Transfers:

        The Superintendent will request Board approval of all budget transfers in accordance

        with state budgeting amendment procedures. To implement these budgeting

        procedures the Superintendent and staff will develop regulations governing budget

        transfers of all District funds to ensure good fiscal responsibility.

    6. Investment of District Funds:

        Effective cash management is recognized as essential to good fiscal management. The

        extent to which the cash manager can obtain investment returns on funds not

        immediately required can provide additional needed financial resources. This requires

        that investments be well founded and uncompromisingly applied in legal, vendor, and

        administrative aspects.

        a. Depositories:

            All District central funds shall be deposited to the credit of the Board in depositories

            approved by the Board Chair selected through standard bidding procedures.

        b. Investment Authority:

            The Board delegates the authority to invest the District's idle funds to the Chief

            Financial Officer (CFO) or designee. The CFO will provide a quarterly investment

            report to the Board.

        c. Guidelines:

            (1) The District will emphasize the preservation of investment principal and conform

                  with Federal and State legal requirements.

            (2) The financial administration will maintain sufficient liquidity to meet funding

                  needs.

            (3) Investments will be diversified to avoid incurring unreasonable risks regarding

                  specific investments or individual banks.

            (4) Investments will be made that will attain the best market rate of return

                 considering liquidity based on projected expenditure needs.

E. BOARD OF EDUCATION REPORTS:

    1. The Superintendent or designee shall provide the Board quarterly reports of the

        financial activities of the District.

    2. The Superintendent or designee shall notify the Board of the following:
        a. Expenditures greater than $100,000; and
        b. Budget line item increases of both 20% or more and at least $100,000.

Adopted: 8/26/04
Effective: 9/1/04
Revised:11/10/04; 1/27/05; 9/7/05; 10/12/05; 11/9/05; 3/23/06; 6/14/06; 5/14/08