The name “Bookkeeping Plus” has been synonymous with charter school accounting for almost two decades in Indiana. CEO Beth Marsh and her staff have proudly served dozens of charter schools, including new start-ups, offering industry-insider knowledge and the highest degree of integrity.
Bookkeeping for charter schools is a large and comprehensive task. In essence, BPI functions as the controller, leaving school staff free to focus on delivering a quality education to its students.
Track grant monies
Assist with tracking of the Free and Reduced (F&R) Lunch program (if needed)
For F&R, file the monthly reports necessary to receive the state and federal funds
Assist with tracking of fees charged to students (if needed)
EXPENSES & ACCOUNTS PAYABLE
Code invoices to proper funds and chart of accounts
Enter invoices from vendors and suppliers
Reconcile invoices to statements
Pay monthly recurring invoices
Maintain prepaid-expense schedules
Post monthly expense accrual entries
Make payments to vendors (check writing)
Track A/P including aging
Set up purchase order system in the software program
Prepare and maintain purchase orders
Match invoices to POs
Enter deposits into accounting system
Track receipt of operating funds and grant monies
Order forms as needed
Set up filing system
Set up processes and procedures for SBOA compliance
FINANCIAL STATEMENTS & REPORTS
For charter schools, BPI prepares the financial statements (Balance Sheet, Income Statement) and generates the required reports for SBOA and DOE.
CASH FLOW MANAGEMENT
A particular challenge for charter schools is managing their cash flow, given that funding (mostly grants) is disbursed to them at non-regular intervals. Bookkeeping Plus works with the client to address this issue, as part of our function of providing professional advice. There are a number of services we can provide for our clients.
Provide reports such as Statement of Cash Flows
Work with client to project cash needs and manage bank account balances
Prepare a report for “cash flow projected against adopted budget”
Prepare accrual and/or cash basis statements
Prepare statements monthly, quarterly, or as needed by the client
Reports include Balance Sheet, Profit and Loss, Budget-to-Actual, Previous Year Comparison
Provide information to regulators or CPAs upon client request
Bank and credit card accounts
Prove all balance sheet accounts monthly
Review profit-and-loss accounts monthly for accuracy
Re-class to grants and accounts as requested or needed
Periodic financial statements and reports as detailed above
Reports for the school’s board of directors
Information for the third-party Tax Preparer
Information for auditors
Custom reports as needed
Form 369, Fixed Assets
Form 100R, Employee List
County Treasurer Report
Form 9, Biannual Report
Other reports to regulatory entities or authorizers as requested
Putting together a realistic, workable budget is probably a charter school’s most important financial responsibility, and one of BPI’s most critical services to its clients.
CREATING THE BUDGET
A well-crafted budget is a major task, and virtually impossible to do without prior experience in the field. Charter schools in Indiana are different than other types of entities in that applicable law and rules from the Indiana Department of Education (DOE), State Board of Accounts (SBOA), and the school’s authorizer must be successfully addressed in any budget.
Properly estimating revenue and expenditures starts with identifying possible revenue sources and estimating the dollar amounts. Next, you need a broad knowledge of the different types of expenses to expect. In this regard, you must be able to distinguish between fixed and variable expenses, and the extent to which the latter is actually subject to modification efforts.
Bookkeeping Plus works to help school management implement strategies for keeping operating expenses under control, and to recognize in which areas they have the flexibility to use managerial discretion.
OPERATING WITHIN BUDGET GUIDELINES
Throughout the year, BPI assists the school in staying within the budget guidelines, and provides Budget-to-Actual reports. We also work with the client to project cash needs and manage bank account balances. In regard to cash flow, sometimes timing is everything, and is often the hardest to affect. That is where BPI’s experience makes a difference.
PAYROLL & RETIREMENT
BPI can process payroll for charter schools in conjunction with their third-party payroll service, and generate the necessary reconciliations and reports.
Bookkeeping Plus prepares and inputs the payroll information to be processed by a third-party payroll company. This includes calculating the deductions for benefits such as health insurance and life insurance, as well as retirement contributions by employer and employee.
We then make the payroll entries directly into the systems of the third-party payroll providers, and subsequently prepare the desired reports. After the payroll is processed by the payroll company, we input the payroll into the client's accounting software by department and grant allocation.
Our service includes tracking teacher contracts, which involves taking the total number of working days and converting it to an annual payroll calendar so that the teacher is paid throughout the year. If the teacher’s job is terminated, we prorate it accordingly.
We also prepare the monthly benefit reconciliations for each deduction or benefit category.
INPRS RETIREMENT SAVINGS PLANS
The Indiana Public Retirement System (INPRS) provides a retirement savings plan for certified teachers at charter schools. The Teachers’ Retirement Fund (TRF) allows teachers or their employing schools, or both, to contribute to the plan. There is also a fund for non-teacher employees of schools (i.e. administrators and staff) called the Public Employees’ Retirement Fund (PERF).
As with all such plans, there are specific requirements and prohibitions, and the procedures for paycheck deductions and payroll liability payments can be difficult to understand and implement. BPI has a payroll processing department dedicated to handling PERF and TRF payroll matters. We determine what rules and issues apply, make the necessary calculations, enter the paycheck deductions (contributions by employee), prepare the employer contributions, and send contribution funds to the plan.
We also prepare and send the various regular and annual reports required by PERF/TRF. Accuracy and timeliness are key, and BPI’s reputation for being able to successfully navigate the PERF/TRF maze is unparalleled.
403(b) RETIREMENT SAVINGS PLANS
A 403(b) is a retirement savings plan for which the employees of nonprofit organizations are eligible, including charter schools. Conceptually, it is similar to a 401(k) in that, generally speaking, salary is deferred into the plan before income tax is paid, grows on a tax-deferred basis, and is taxed upon withdrawal.
A 403(b) plan may be used as an alternative to an INPRS plan, in which the school matches the employee’s contribution. Another option is for an employee who is participating in INPRS to make additional contributions to a 403(b) plan, if the school has elected to have such a plan.
Obviously, the rules regarding eligibility, deductions, matching, and contribution caps get complicated in a hurry. Fortunately, BPI has many years of experience in making the necessary calculations, and ensuring that paycheck processing is accurate.
BPI also performs regular 403(b) reconciliations, and prepares the annual census report required by third-party administrators (TPAs) of 403(b) plans.
Grants are the key revenue source for charter schools, but they are sometimes difficult to allocate and report accurately. BPI has years of experience to offer in this area. Charter schools are funded primarily by federal and state grants. Expenditures must be allocated to the proper source of grant revenue, and the accounting system must be set up and maintained to accurately reflect sources and uses of grant revenue.
Federal sources usually comprise a large portion of grant monies. These include such familiar federal programs as Title I, Title II, Title V, Textbook Reimbursement, and Free and Reduced Lunch program. It also incudes start-up funding for new charter schools.
To a large extent, the Indiana State Department of Education (DOE) administers the federal funding programs. But it also disburses state funds established by law, and promulgates the formulas used to determine allocation of funds. BPI is very familiar with these complicated formulas and how to account for them properly.
BPI sets up the accounting system for its clients and helps them understand for what uses and purposes the grant funds may—or may not—be utilized.
Interestingly, most grant monies are received by the school as a reimbursement after the expenditure has been made. In another words, you must spend the grant money before you can ask for it. The tracking of these transactions, and the matching of a reimbursable expenditure to its authorizing grant, becomes very complicated very quickly. BPI has developed procedures for accurate tracking and timely application for reimbursements so as to smooth out, as much as possible, the sometimes-bumpy road of cash flow.
Not surprisingly, there is a multitude of reports required in regard to grant monies. Each of these reports has specific inclusion requirements and filing deadlines. For example, the DOE requires reports on Title I spending, reimbursements, and other issues, with certain filing parameters.
COMPLIANCE & AUDITS
Charter schools are subject to extensive oversight and regulation. Compliance is an ongoing challenge that BPI can help you meet. To ensure compliance, annual audits are required by the SBOA, with reports due biannually to the DOE.
INDIANA STATE DEPARTMENT OF EDUCATION (DOE)
Oversight of charter schools starts with the Indiana State Department of Education (DOE). Most state and federal funding grants are administered through the DOE.
Every six months, charter schools are required to submit to DOE a report of revenues and expenditures called Form 9. Bookkeeping Plus prepares this report for its clients, and otherwise works to ensure that they use the proper forms and procedures required by the DOE or SBOA.
STATE BOARD OF ACCOUNTS (SBOA)
In Indiana, the SBOA promulgates a series of protocols that govern accounting methodology for charter schools. Compliance is mandatory, but due to the extensive nature of the regulations, it is not always easy to understand how the rules apply in a particular case or how they should be implemented.
BPI has the knowledge and experience of what information to provide to the SBOA on behalf of each of our clients. We also work with the client to ensure that they remain in compliance. We set up the accounting system in compliance with the SBOA-designated chart of accounts and related regulations.
The SBOA also disseminates regulations for recordkeeping and records management. BPI helps the school ensure its compliance with the Indiana state standards.
THE SCHOOL'S AUTHORIZER
Each school is chartered by an authorizer, who may publish their own subset of rules and regulations relating to finances. BPI works with the school to ensure it understands and complies with these rules.
Increasingly, authorizers are looking not just at technical compliance with regulations, but at the actual financial strength and financial performance of the school. This is an area where BPI is uniquely suited to assist clients, in that it can provide consulting services to address the school’s current and long-term issues.
Authorizers include Ball State University, the Indianapolis Mayor’s Office, the DOE, school districts, and others.
An individual charter school’s board of directors may issue its own set of financial policies and procedures. BPI assists with addressing these requirements as well.
Audits are required by state law (implemented by SBOA), and by each charter school’s authorizer. These audits are conducted by CPA firms. BPI has extensive experience with the audit process and what to expect. We strive to keep the accounts audit-ready throughout the year.
Prior to the audit by your CPA firm, we prepare any necessary information and work with the client to make sure they are prepared. We then work with the auditors to ensure that they have all the information they need, and assist with any questions as they arise. With BPI as your accountant, the audit process goes much more smoothly, which also can reduce the cost to the school.
We help schools set up their processes and procedures to stay in compliance with the SBOA. We pride ourselves on the schools we work with on having zero or extremely low audit comments. We also have come on board as the accountant for a number of schools and turned around their problem compliance scores within the next audit period.
EXTRA-CURRICULAR ACCOUNTING COMPLIANCE
WILL THESE SERVICES HELP YOU SUCCEED?
Call us and ask for CEO Beth Marsh. She will personally listen, evaluate your needs at no charge, and honestly advise you on if Bookkeeping Plus is the best firm for you.