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Performing Arts Operations and Improvements

This post will focus on ticket sales and other cash transactions associated with performing arts productions as well as some Music Booster events.  Before describing what has occurred and the changes that are in place, I wanted to express my belief in the individuals who have worked with integrity to support the student experience while at Burlington High School.  The findings in the review of the music revolving account are about process.  The faculty and staff in Burlington may need to learn new procedures, but I have no doubts about their dedication and honesty.

The Music Department implemented an on-line ticket sales system 9 years ago primarily to remove the responsibility for cash transactions for performances and to keep up with demand.  The average number of tickets sold to the BHS Musical is over 3000.  Looking at the typical number of transactions for shows, it appears that roughly 80% of the ticket transactions occur without cash using the online system.  The cash transactions occur in advance in the music office and the night of the show.  These transactions are recorded using the third party TIX online software.  Invoices for customers are available upon request.

This year the advanced cash ticket purchasing has been moved to the main office at the high school.  This change will allow for cash to be stored in the school’s safe.  As always, customer contact information is recorded and a confirmation and reference number is emailed to the customer (provided the customer chooses to share their email address).  It is important to note that this customer information only gets recorded during the pre-sale process.  Patrons were frustrated with the wait to gather this information on the evenings of the show.   In order to save time, walk-in ticket customers the evening of the show were classified as “guests.”

Complementary Tickets:

There appears to be some confusion around complimentary, or “comp”, tickets and the number of projected ticket sales with the actual number of tickets and revenue reported.

All faculty and staff members are offered one “comp” ticket.  This no cost ticket is provided and recorded in the accounting TIX software.  Obviously, we are attempting to encourage faculty and staff members to attend student events.

Secondly, “comp” tickets were printed and sold for last minute customers.  Cash and checks were accepted for these tickets.  In the past, there would be a line of last minute customers who were in a rush to get a ticket and find a seat before the show started.  The single ticket booth was slow to process the transaction.  In an attempt to solve this problem, the “TIX” company advised the box office manager to print a row or two of seats to sell.  Sometimes, they would print 20 tickets but only sell 10.  This created two problems.  The first is that these last minute sales were not recorded accurately due to pre-printing tickets with different values and the second problem was that the department would incur a fee for unsold tickets.  After further consultation with the TIX representative, it was decided that in order to avoid paying the fee, they should print “comp” tickets.  TIX does not charge any fee for comp tickets.  This decision saved the school from paying fees for unsold tickets; however, it did not solve the problem of unaccounted ticket income.  That is, the money paid for the last minute comp tickets was not recorded in the accounting software (as the ticket was pre-printed).  In other words, while the money was added to the revenue and deposited in the revolving account the next business day, there was no record to match the source of the extra cash and checks to a ticket generated in system at the time of sale.  Consequently, the number of comp tickets sold on the account print outs might be off by 10 – 20 tickets depending on how close the box office manager’s estimate was at the number of walk up purchases.  The amount of this discrepancy would result in extra cash per production being deposited or used for the next cash drawer ($200) because a small number of tickets were pre-printed to help alleviate the rush at the start of a show. 

Cash Box:

Addressing another finding, the business office has issued a $200 cash drawer for making change instead of this $200 cash drawer being stored in the music office safe.  This drawer will be signed out from the business office for any approved events that possibly need to make change. 

Going forward, thanks to the new business manager, with support from the IT department and in response to the report, the box office will not pre-print any tickets.  All last minute customers will be sold in the same manner as pre-sale tickets.   In addition, a second box office sales person will be hired allowing last minute walk up customers to be served in a timely way.  These customers will be sold tickets and their cash, checks, or credit will be recorded in the system at the exact price.  This will allow the business office the ability to count the deposit and match the accounting reports exactly.

These changes are being implemented for the fall show.

Ticket Revenue Reported:

I received several inquiries as to the number of tickets sold at each musical.  The music department has provided an estimate of ticket revenue when preparing a budget for an upcoming production.  The department has been conservative with these projections typically projecting a half-filled auditorium at a blended ticket rate.  For instance, the average ticket price is $12.50 ($10 Student/Senior, $15 Adult).  While most musical performances sell 600 tickets or more per performance, for planning purposes, the department would conservatively assume they would sell at least 450 tickets per performance.  This strategy was followed in an attempt to keep expenses in line with expected income.  Some comments have interpreted these projections as the final, reported receipts associated with a show.  This understanding is not the case.

I have asked the music department not to be involved with projecting revenues  in the future as it appears to cause confusion.  We do not ask our athletic director to project how many football or hockey tickets will be sold at games.  These programs are not dependent on ticket sales.  My expectation from the music department moving forward will be to provide a detailed budget of the expenses associated with each production.  The school committee can determine whether the budget reflects the type of show the community has come to expect.  Any revenues associated with ticket sales can be deposited in the music revolving account and used for instrument upgrades and other programmatic needs in a similar manner to our other programs.

Music Boosters:

We are grateful to have such an active and supportive music boosters group.  We are going to implement a change in how cash and checks are received for Booster Events. The Boosters group is a separate 501C3 non-profit.  In the past, students would bring in cash and checks from their parents to the music office for Music Booster events.  This money was to pay for Booster events such as award banquets, trips, cast banquets, Gala concert tickets and other Booster fundraisers.   Moving forward, we will ask all booster groups and PTO organizations to provide the school with a locked deposit box.  Parents can send cash and checks in with their children in a labeled envelope.  The envelope will be placed in the locked deposit box.  The lock box will be the property and responsibility of the boosters and only the PTO or Booster President and Treasurer will have a key.  The Music Department will not sell tickets to the Booster Gala Concert or Banquets.  This change addresses another finding from the review.

 

 

Revolving Accounts – Music and Cafeteria

This post focuses on the cafeteria and music revolving accounts.  The music revolving account was reviewed by Roselli, Clark and Associates because of an agreement between the Ways and Means School sub-committee and the school committee budget sub-committee last spring during the FY2018 budget process.  The district received the final report on the music revolving account on October 12th (linked below).

The district’s revolving accounts are separate from the district’s operating budget and student activity budgets.  The student activity account audit was completed in August.  The Student Activity Account Audit, Corrective Action Plan, guidelines and balances were detailed in a prior post.

After a significant deficit accumulated in the cafeteria revolving account many years ago, school committee and Town officials agreed that this revolving account would be zeroed out at the conclusion of the fiscal year, if in deficit.  A negative balance in a revolving account typically indicates a budgeting problem or, in the case of the cafeteria, may indicate the need to increase the price of lunches.

The deficit in the cafeteria account this year spiked from prior years to about $100,000.  About 70% of this amount was due to an increased priority placed on fresh produce and general food quality.  Money has been identified to zero out this deficit.  The school committee will be voting to transfer money from the international student choice account (detailed in an upcoming community concert post) to the cafeteria revolving account at the meeting on 12/19.  This transfer typically takes place in the early fall.  The transition to new personnel in the business office and the ongoing review of the music revolving account delayed this transfer until now.

Looking to next year, we will discuss adding money in the operating budget to support our food priorities or re-examine the prices charged for student lunches.  A $25,000 to $30,000 loss in food services has been more typical in prior years.  We cannot sustain the larger deficit created at the conclusion of FY2017.  The Federal School Lunch program is highly regulated.  Our staff does a great job navigating the regulations while attempting to increase student participation.  For context of the typical and atypical deficit amounts, we typically spend about $1,000,000 per year on the school lunch program which is paid for by students purchasing their breakfasts and lunches.

The music revolving account showed a $51,322 loss at the end of fiscal 2017.  The community concert series contributed to 78% of this loss.  The non-community concert series loss in the music revolving account at the conclusion of FY2017 is roughly $11,300.  Like the cafeteria account, this deficit indicates a budgeting issue that needs to be addressed as we create the FY2019 budget.  I will write a future post specifically about the community concert series.

Like the cafeteria account, prior losses in this account were zeroed out before starting another fiscal year.  The school committee will vote to zero out the current deficit at the 12/19 meeting using international school choice funds.  We did not calculate the impact of the community concert series on prior year music revolving account deficits; however, the deficits in the music revolving account correlate to the initiation of the community concert series three years ago.  With the series cancelled, I believe that the music revolving account will come back into balance as has been typical.

In addition to the deficit, the account review indicated that there were charges made to the revolving account that should have been charged to the operating budget.  Reclassifying these charges would actually lower the revolving account deficit.  The review also indicated that there were charges that should have been charged to the high school’s student activity account.  Again, reclassifying these charges would further lower the deficit.

All of the findings in the review are being addressed by the business office.  All music department purchase order/payroll/contracted service requests this year will require a second signature to ensure that they are being charged to the appropriate account – operating, revolving, or student activity.  In addition, purchase orders are being grouped by number and associated with each production.  This change will allow for an easier analysis of the costs associated with each show.

The auditor also had findings around the collection and management of money in regards to ticket sales and funds collected from students.  I will address these concerns in a separate blog post.

FINAL REPORT Burlington Music and Performing Arts AUP

 

 

 

Student Activity Accounts

The links below are to the district’s financial review of school student activity accounts and the district’s action plan to address the findings from the review.  Both documents were discussed at the school committee meeting of 11/14.  The action items will be agenda items at future school committee meetings.  In addition to these links there are other links to help add context and other factual information.

There was a question asked during the school committee meeting regarding the use of the word audit in the cover letter from Roselli, Clark and Associates because of another statement in the cover letter that the report was not an audit.  The auditor’s response to this question is as follows: “We have to write it that way because its not a GAAP audit. Under the Mass General Law, the regulation states the activities are audited in accordance with the guidelines established by the Department of Elementary and Secondary Education (DESE).  So in following the DESE guidelines we have conducted the audit as required under the law but again it is not a GAAP audit as DESE does not require a GAAP audit…”

The student activity accounts are not the district’s operating budget or revolving accounts.  The student activity accounts reside at each school.  They are typically used for student activities such as field trips at the elementary and middle school level.  The high school student activity account is larger and more varied as there are more student activities.  The significant findings in the audit that require our immediate attention primarily involve the management processes associated with the accounts at elementary and middle school.  The auditor found the high school student activity account to be in compliance.  This account had been audited in prior years.

To provide some specific context to the issue, the link below is to a typical elementary, grade-level, student activity account.  The $150 withdrawal on the statement was to pay for the Tour of Burlington bus.  One of the major findings in the audit is that the we should not have individual grade-level, student activity accounts.  The individual grade-level accounts will be closed and re-opened as a sub-account under one main school-level student activity account under the principal’s authority.  We will request two years of bank statements to review as we close out the accounts.  Like any bank account, only the person who opened (or is identified as the owner) of the account can access the funds or get information like account history.  Long term, we are exploring the option of expanding the current, electronic food payment service to include other activities like field trips to remove any exchange of cash between parent and teacher.  These conversations will be ongoing.  The second link lists all of the known accounts at each school and the balances in each at this time.  We have asked anyone who has opened or inherited a grade level account to share account information with the district.  Our assumption is that everyone is acting in the best interest of children.  The organizational issue of having multiple accounts instead of a single account with multiple sub-ledger designations does not reside with the individuals who opened these accounts.

Sample Grade-Level Student Activity Account

Student Activity Balances – Sheet1

In addition to parent contributions for field trips, there was a question raised about the commissions the schools receive from the photography companies that take pictures of students.  The link below is to the balances from picture commissions.  These balances reside in the building-based, principal accounts that will remain moving forward.  The commissions are included in balances of the known accounts listed above.  The future operation of the principal accounts will be defined in the draft Guidelines linked below.

Photo Commission – Sheet1

The Action Plan was created by our Business Office Officials – Bob Cunha, Director of Finance, Facilities, and Technology and Nichole Coscia,  Business Manager – in collaboration with the CPA firm of Roselli, Clark and Associates.  Ms. Coscia is new to the district and has worked as a Federal Auditor.  We are excited to have added her to our Business Office staff.  She will be conducting annual reviews of these accounts with the independent audit occurring every three years by regulation moving forward.  The draft Guidelines linked below will be adopted district wide.  Ms. Coscia will follow up with training in each building to review the guidelines.

Following our action plan will address all of the findings in the audit in two years.  We will ask Roselli, Clark and Associates to conduct another independent audit at that time.  A two-year period is one-year sooner than the aforementioned three-year, external audit required by the new regulations.

Student Activity Action Plan for Agreed Upon Procedures Report 20170630.docx

Burlington Stdnt Actvty Rpt 17

Burlington Public Schools SAA GUIDELINES.docx

BHS MUSIC BOOSTERS ANNOUNCES ITS ANNUAL GALA AND SILENT AUCTION

TO BE HELD ON NOVEMBER 19, 2017

The Burlington High School Music Boosters is pleased to announce its annual Gala Concert and Silent Auction to be held on Sunday, November 19, 2017 at the Fogelberg Performing Arts Center in Burlington High School.  The silent auction begins at 1 pm and the concert begins at 2 pm. Tickets are $10 for seniors and students, and $15 for adults. Mention the name of a choral or band student when you place your order and that student will receive credit for your ticket purchase.

This year’s concert is entitled “Bon Voyage!” and will take the audience on a musical journey around the world as the students perform music from six of the seven continents.  Ensemble selections include music from France, Italy, India, South Africa, Canada, Australia, and many more.  The concert will feature both vocal and instrumental soloists, and guest performances by many of our Burlington Public Schools faculty.

The doors open at 1 pm for concert attendees to peruse the dozens of exciting auction items including a Mercedes for the weekend (a $500 value donated by Mercedes of Burlington), Kaplan SAT prep classes ($899 value), tickets to sporting and theater events, senior portrait packages, and more.

The annual gala is the Music Boosters major fundraiser and this year, proceeds will help defray the costs of the music department’s trip to Montreal in April 2018.  The Burlington High School Concert Band and Chorus will attend the Montreal Heritage Festival from April 25-29, 2017 where they will perform, compete with other ensembles from the United States and Canada and attend master classes at renowned McGill University.

The BHS Music Boosters is a non-profit organization the goal of which is to support the BHS music program including providing financial support for non-school related activities, promoting student leadership, and providing scholarships to graduating seniors who have committed to continuing their education.

Please join us for this celebration of the universal language of music! Tickets are available at www.burlingtontheatre.comor by calling 1-800-A FUN TIC.