Finance in Education Chapter 12

Budget A budget is a financial plan that involves at least four elements: (1) planning, (2) receiving funds, (3) spending funds, (4) evaluating results.

Budget A budget can follow a pattern as Identifying needs Establishing goals Organizing objectives Building a program in meeting those objectives Providing a budget to fund those programs

The Budget’s Three Dimensions The school district budget has been represented by an equilateral triangle. Revenue Plan Cost of the program Educational Program

The Budget’s Three Dimensions In theory the educational program is determined first. It is then converted into cost terms, and finally the determination of the sources of required revenues is made. The idea is for the educational program to be developed without letting the available funds be the master or limiting factor in determining the bounds of the educational program.

Administration of the Budget The superintendent of schools should administer the budget, and the school board has legal authority for its formal adoption. The budgeting process should be continuous and provide for citizen review and appraisal. In preparing the budget, the superintendent should work with the entire school staff in order to provide an instrument that reflects the goals and objectives of the district.

Budgeting at the School Level The administrator is the chief financial officer of a school. It is essential that all funds be recorded and deposited into one school account. A specific notation must be made for every financial transaction that takes place. The simplest school accounting form contains a single vertical line where increases are entered to the left and decreases are entered to the right of the line. One such form is required for each activity that needs to be monitored.

Zero-Based Budgeting ZBB requires justification of every program each time the budgeting process is redone. Its chief advantages are the involvement of nearly all staff members, the requirement for an annual evaluation, and the development of priorities with alternatives.

Site-Based Budgeting SBB involves teachers, community, and principals at the local school level. It provides funds for supplies, materials, equipment, texts, and library books and sometimes salaries for teachers, aides, and custodians.

Strategic Planning It is an approach to setting district goals for three-to-five year period. A mission statement is designed, belief statements may be outlines, and goals or vision statements are defined for the district. Action teams may be organized to refine the goals and prescribe strategies for achieving them. The board of education is required to adopt the plan to complete the process.

Total Quality Management TQM is an opportunity to conceptualize a systematic change for school districts. School board members, administrators, teachers, support staff, parents and students meet on a peer level to reach consensus about a shared vision of excellence. It requires the total organization to take the authority and the responsibility.

Challenge The leadership challenge is to develop the best possible budget process and document that which will convey to the board and community what is needed and why.