School districts across the State are faced with increased expenses at the same time the State is cutting aid. While it is still unclear how the proposed 20% decrease in State aid is going to be dispersed, it’s clear that there will be less revenue. Districts who are very dependent on State aid have already reacted by reducing staff. It is more important than ever to assess where revenue streams can be maximized and minimize large expenses.
- STAC process: Does your district have a sufficient process in place for identifying high-cost students? It is important to ensure the process is sufficient to maximize aid.
- Use actual self-contained class sizes and all eligible costs (fewer students and more costs means higher cost per student)
- Make sure your district includes McKinney-Vento students in the STAC for State aid.
- Get more details from our article on maximizing STAC revenue
- Medicaid: Has your district reassessed the Medicaid population? See if the potential revenue from reimbursable Medicaid eligible services outweighs the cost associated with tracking Medicaid eligible services.
- Tuition billing: Districts can bill other districts for non-resident tuition where applicable
- Vendors may have been tacking on extra charges under “taxes and fees.” When was the last time a review of these bills was performed? Remember, these reviews cost the district nothing unless savings is found.
- Consider assessing the efficiency of current bus routes, performing a ridership survey, and paying parents to drive their children? There may be potential consolidations or cost savings.
Active employee health benefits:
- If your contracts don’t specify which insurance carrier must be used for health benefits, try to keep it that way. There are lower-cost providers out there offering similar or better plans.
- Buy-back benefits:
- Assess whether this incentive is beneficial for the district.
- Does your district offer different amounts for declining single v. family coverage?
- Make sure there are proper procedures to ensure the correct buy-back is paid to employees (family or individual amount).
- Ensure employees requesting the buy-back are entitled to receive such coverage on an annual basis (dependents age out and people get divorced) OR consider setting one buy-back amount regardless of the coverage for which the employee is entitled and eliminate the additional annual verification.
Retiree health benefits:
- If the contracts do not specify which insurance carrier must be used for retirees, consider insurance carriers that can provide the same or better coverage at a lower cost to the district.
- Medicare Part B reimbursements: Unfortunately, these costs will always burden school districts due to the Taylor Law, but to make these reimbursement a little less painful:
- Retirees can be reimbursed annually, instead of quarterly or bi-annually, for the prior year based on the SSA-1099. This can increase efficiencies and decrease the time and costs associated with calculating and mailing these reimbursements.
- Consider setting up direct deposit for the reimbursements.
- Payment method options: Consider having retirees enroll in automatic pension deduction instead of billing, tracking, and collecting such payments.
- Generally, this option works if the retiree is paying a percentage that is in 5% increments. This may require amending the employee contract.
- NYSHIP may be able to accommodate a different percentage (e.g. 22%), but this is generally only helpful if most of the retirees fall into this new percentage category.
Nicholle Mezier, CPA, MBA
Nicholle is a Manager of Cerini & Associates’ audit staff where she brings experience in audit, review, and consulting services to our general business, nonprofit and special education clients. Nicholle has worked with a large number of nonprofit clients, predominantly focusing on social service providers, healthcare providers, foundations, educational institutions, and arts and culture organizations. Nicholle’s technical knowledge allows her to provide specific services, including financial statement audits, internal and claims audits, and nonprofit outsourced accounting services. Nicholle has also contributed to the firm’s various newsletters.