School Finance

1. School Finance Presentation One Educational Leadership

2. Budgets and Budgeting The Budget is: “A document that specifies the planned expenditures and anticipated revenues of a school district in a given fiscal year, along with other past and projected data and information relating fiscal elements to the educational mission, organization, policies, programs and outcomes of the district” Educational Leadership

3. The Budget is a device for accomplishing the district’s goals and objectives and translating the school’s educational priorities into financial terms. • The budget is the most important document in the school district as it will direct and guide all of the educational philosophies of the institution. • The budget document will become the signature of the educational leadership in the school district and the school building. Educational Leadership

4. The Budget Triangle Your Personal Philosophy Will Determine Which is the base line. Revenues Expenditures Educational Programs Educational Leadership

5. Activity • In three small groups.. • One Group has philosophy of Educational Programs as base line • One group has philosophy of Revenues as the base line • One group has philosophy of Expenditures as the base line. • Each group must defend their position. Educational Leadership

6. Guiding Principles of the Budget Process • Use a Vision and Knowledge of Service Needs • Develop a budget that represents the policies, goals and priorities of the school district • Prepare and adopt a budget that can be used to monitor and control how well the goals and objectives are being met Educational Leadership

7. Allocation of Resources • Resources are finite and must be used carefully in addressing the priorities of the district. • You Must Address: • Personnel • Supplies • Materials • Contracted Services • Capitol Project Items Educational Leadership

8. “Desires are infinite, resources are finite” • Quantity and Utilization are the keys to budget utilization • The budget ultimately is designed to provide the very best possible for the students with the resources that are available • The budget creates a link between what is ideal and what is possible Educational Leadership

9. Purposes and Uses of the Budget • Planning system for the district • Should link the district’s strategic plan as well as the building strategic plan and the services that are offered to the students • It is the legal basis for spending public funds • It is a control document for school district expenditures • It is a document that may be used for the evaluation of programs and administration. Educational Leadership

10. Budget Preparation • Estimation of Expenditures (the heart of the process) • Estimation of Revenues (the most difficult part of the process) • The balancing of the Revenues and Expenditures (the most essential part of the process) Educational Leadership

11. Estimation of Expenditures • What are the priorities of the district? • What are the increases and decreases that are expected? • Do the expenditures address the district and building improvement plans. • Do the expenditures meet the requirements of state and federal guidelines? • Who are parties that are involved in this process? Educational Leadership

12. Estimation of Revenues • Done primarily by Central Office (CO) Staff • Based on: • Historical Trends • Calculations and Formulas provided by the State Department of Education • Property Tax estimates and projections that represent increase or decrease in growth Educational Leadership

13. Sources of Revenue • Local Funds • Based on property tax • Intermediate Funds (County) • Based on fines/forfeitures/county utilities • State Funds • Based on a variety of components including school district wealth, student population, etc. • Federal Funds • Based on special population programs, and federally subsidized programs. Educational Leadership

14. Budget Modification • Most states require school districts to balance the budget. “Expenditures must not exceed Revenues or Fund Balances” • Only two choices can be made: • Reduce expenditures • Increase revenues • As a rule of thumb – reduction of expenditures should be done “as fare from the classroom as possible” Educational Leadership

15. Budget Approval • All budgets must be approved by someone higher in authority than the Superintendent • Budget hearings are required in most states • Some are approved by City Councils and County Officials • Some are still voted on by the public • All must be in compliance with State Boards of Education • Rejection from any of these bodies could result in program changes, adjustments in personnel, transportation reductions, etc. Educational Leadership

16. Budget Administration • The budget is used as the monitoring device for school district funds. It is designed to track expenditures, revenues, program implementation and building level accountability. Educational Leadership

17. Problems Often Found In Budgeting • Budgets have a tendency to be short term (one year) • Most often will find budgets that are missing certain elements such as: • Integration of long term planning • Establishing measures of monitoring performance • Representing significant input from citizens and other stakeholders • Communication of goals and assumptions to the public are often weak • The building of empowerment to manager and other employees is often minimal • Often times there are unreasonable estimates of either revenues or expenditures. Educational Leadership

18. Questions • What are the five purposes and uses of the budget? • What are the three steps in budget preparation? • When estimating expenditures what are the five questions that must be asked? • What are the four sources of revenue? • What are the two choices that can be made to produce a balanced budget? Educational Leadership

19. Does the Superintendent have the final say in budget adoption? • How is the budget used as a monitoring device for the school district? Educational Leadership