Major Aspects of A school Budgeting Process
a) Objectives of Budgeting. The school fiscal budget facilitates the provision of quality educational opportunities to the students in the learning institutions. The ability of the administration to manage the school funds and other resources reflects in the budget ( DeAngelis & Barnard, 2021 ). The three main features of a school budget are to;
Be balanced so that all the institution's expenditures are covered up by the revenues.
Be prepared in accordance with the requirements of the local, state, and federal legal mandates; and
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Provides the basis through which the school’s accomplishments, costs, and service efforts are evaluated.
b) The Budget Process Overview. The three major phases that comprise the budgetary process include the planning, process, and evaluation phases.
Planning . Sound planning initiates the budgetary process. At the planning stage, the board notes the goals and objectives and other budget requirements ( Tamir & Arar, 2019 ). The programs that facilitate the attainment of these goals are developed, and the legal bounds of the budget are reviewed.
Process . Budgetary resource allocations are then made to support the plans and programs set for the budgeting preparation phase. The allocations are only made after the programs and plans are established.
Evaluation . A budget is evaluated at the end of the year to review how the allocated funds were spent. The budget’s effectiveness in the attainment of the Local Educational Agencies Goals and objectives is reviewed. The next budgetary planning heavily relies on this evaluation phase.
c) Objectives of the Budgeting. One of the most significant functions of the school boards is the adoption of the school budget. The budget and the annual general fund budget form the essential legal documents required by the school. The expenditure appropriations must be board approved and must not be exceeded without an amendment. Any expenditures for a fiscal year must not be made before the approval and adoption of the general fund budget ( Saleem, 2020 ). A school, therefore, has no legal spending authority without the board’s permission. All the tax rates for the relevant year must be considered before budgeting for a fiscal year.
This presentation discusses the school budget process and the essential concepts that need to be understood by the school superintendents and the board ( DeAngelis & Barnard, 2021 ). Some of the ideas vital to the successful adoption of a school budget include the objectives for the school budget within the relevant year, the legal requirements and guidelines pertinent to the budgetary process, the school budget estimates, the fiscal reserve, and the forecasting and planning.
d) Budget Estimates. There are two categories of financial resources that may be used for the following budget year. The two categories are the projected revenues for the next year and the fund balances available last year. The estimate of both funds is critical, and the accuracy is vital to the success of the entire budgetary process. Fund balances are only available once, and therefore, the board should be careful while relying on the finances from a fund balance during a fiscal process ( Tamir & Arar, 2019 ). Fund balances are required to be allocated as one-time expenditures only and should always be placed in the fiscal reserve accounts in case there are any doubts cast. The Local Educational Agency policy states that all the funds assigned to the fund balance are reserved for the following year’s projects.
e) The Budgetary Reserve. Common emergencies are covered for by a contingency plan funded by the budgetary reserve. The fiscal reserve is also used to provide for sufficient cash flows and any potential increase in expenses. The budgetary reserve is always a sound administrative move as there are certain fiscal variables over which control is impossible. It is recommended that the items within the budgetary reserve are estimable, although some items such as the local, state, and federal programs may or may not require resources from the budget, and their estimations may not be easy. All the funds allocated to specific contingencies but fail to materialize within the budgeted fiscal year remain in the budgetary reserve at the close of the year.
f) Forecasting and Planning. Financial forecasting involves the projection of quantitative impacts of the changes and trends within an educational institution’s current and future operating environments. Historical and current data are vital to the forecasting process. Forecasting forms an integral part of the budgetary process of a school. Some of the items that may be forecasted to help with the school budget include the school enrollment projections, the revenue projections, and the expenditure projections ( Tamir & Arar, 2019 ). The three ways through which forecasting adds value to the budgetary process are mentioned below.
Forecasting aids in the planning and facilitation by providing quantification to the future costs and benefits of strategic decisions. The budgeting team is able to evaluate and set their budgetary priorities based on the long-term impacts.
Apparent issues, needs, and trends that must be addressed within the school budget are effectively managed and evaluated more accurately through forecasting.
Forecasting provides valuable insights into the future that may affect the Local Educational Agency administration and how they can be proactively accommodated and dealt with rather than reactively.
g) Review and Approval of the Budget. The chief school administrator is responsible for reviewing the school budget before it is presented to the school board. The review process is essential as it familiarizes the superintendent with all the aspects of the preliminary budget. The superintendent presents the budget to the school board. The reported amounts must be for the relevant fiscal year only. All the applicable funds must be accurately accounted for and reported to the board. The superintendent ensures that all the reported figures are consistent with the previously reported amounts for the prior years.
h) Adoption and Monitoring of the Budget. The board of directors provides the oversight authority for the adoption and monitoring of the school budget. A majority of the school board referred to as a quorum, must vote for the adoption of the budget ( Saleem, 2020 ). The board also levies and assess the possible taxes on the budget. The board periodically monitors the budget and reviews the expenditures from the encumbrance and expenditure information provided by the school accounts. The spending plans of the institution are checked against the budgeted amounts. Schools are encouraged to perform monthly budgetary reviews to enable timely response to any emergencies.
State Requirements of a School Budget
Federal government plays a minor role in education and educational policy. The state is responsible for the operation and maintenance of schools. The state set up the Local Educational Agencies as an authoritative wing to offer oversight on education within the state. The state requirements of a school budget are listed below:
The Local Educational Agencies code prohibits deficit financing for educational institutions.
The budget amounts must not exceed the available funds in the institution’s accounts.
The transfer of unencumbered balances from one budget category to another during the last nine months of the fiscal year is allowed. The transfers can, however not be made within the first three months of the fiscal year.
Funds not appropriated within the fiscal budget are prohibited from use unless the allocation was declared in the budgetary reserve in the original budget.
The board changes the budget to accommodate emergencies such as natural disasters and catastrophes. Emergency funds are provided for, from the unexpended balances in existing appropriations.
All the budgets are submitted before May 1st of each year. All the funds received from the state and federal governments are expected to be used for their intended purposes only.
Relationships Between the Budgetary of a School System and the State Budgeting Requirements
All the schools and the Local Educational Agencies are expected to prepare, present and adopt a yearly general fund budget. The main objective of the budget as per the state Public School Code is to estimate all the expenditures and revenues needed to meet the requirements of the educational programs for the year. The school revenue funds and propriety funds from other entities within the school, such as the capital facilities and the cafeteria operations, may adopt other secondary budget documents. The state's budget code for the Local Educational Agencies also requires that a budget be comprehensive and limited to a single fiscal year. The school budget is vital to ensuring that the school expenditure and revenues are consistent with the administrative actions, the board decisions, the court decisions, statutes, state laws, and federal laws. The school budget not only serves as a public relations tool but also as a crucial management tool.
The budget document effectively guides administrations in achieving the objectives set by the Local Educational Agencies. The board depends on the budget for future planning, evaluation, and control to culminate a school’s resources and operational needs ( Saleem, 2020 ). The performance of the control activities set by the budget is evaluated by comparing the actual operations in the school to the budgeted operations for a fiscal year. Educational goals and programs are also translated into financial resource plans by the budget. Student educational goals and requirements therefore guide the budgetary allocations. Effective budgeting lies in the link between financial planning and instruction. The budget enhances the evaluation of educational and budgetary performance since the instruction plans are closely related to resource allocations ( Saleem, 2020 ). The budget remains a vital tool as it is a financial tool and an educational plan. All the school budgets must be consistent and abiding by the accounting guidelines provided by the Local Educational Agency.
Language Domains and Universal Design
DeAngelis, C. A., & Barnard, C. (2021). Effects of Charter School Competition on District School Budgeting Decisions: Experimental Evidence from Texas. Social Science Quarterly , 102 (1), 523-546.
Saleem, T. (2020). District Solutions for Resource Effectiveness: A Local Education Agency Leadership Approach.
Tamir, E., & Arar, K. (2019). High school managements resources allocation in an era of reforms. International Journal of Educational Management .
