1. Financial Management & Accountability - The Board’s Role - BCSTA Leadership Academy December 2005 Presenter: Sterling Olson

2. Introduction What is a budget?  A Financial Plan to help you achieve your goals and objectives  Aligns financial resources with your vision, mission and values  Provides a basis to monitor your actual versus planned expenditures  Helps communicate how you are utilizing your financial resources

3. Outline  Roles and Responsibilities  Provincial Funding System  School District Revenue & Expenditures  Budget Process & Accountability Cycle  Trends & Challenges

4. Roles and Responsibilities Provincial Government (MOE Core Business )  Provide funding to the 60 school districts  Improve literacy  Establish governance structures  Set educational standards  Monitor student performance and report results to the public

5. Ministry Goals  Make B.C. the best educated, most literate jurisdiction on the continent  Improved student achievement  A high quality performance-oriented education system Key Strategic Issues: 1. Literacy – Whole Family  from preschoolers to grandparents 2. Student Health and Physical Activity  Healthy school plan  Eliminate junk food over the next four years  Free serving of BC grown fruits or vegetables to all students by 2010 3. Making schools the centre of the community  Including review of underused schools for daycare, senior or parent centres

6. Roles and Responsibilities School Boards  Govern schools in a fiscally responsible and cost effective manner  Provide education programs that reflect the aspirations of the local community  Manage the district’s operating budget and capital plan  Approve local courses  Adjudicate complaints from parents and students  Administer public school legislation and regulations  Jointly accountable to the Minister and the district’s constituents

7. Roles and Responsibilities  Performance of students (Accountability Contracts)  School Planning Councils  Ensure that a school planning council is in place in each school  Maintains policies and procedures to support school planning councils  Communicates district timelines and the processes for the development, receipt and approval of school plans to school communities, parent advisory councils and school planning councils  Provides information about the allocation of resources to the school  Consults with school planning councils about: Allocation of staff and resources in the school Matters contained in the district accountability contract relating to the school, and Education services and programs in the school  Maintains processes to ensure school planning councils consult with the entire school community  Approves, approves with modifications, or rejects school plans

8.  The Provincial Cabinet and Treasury Board establish budget targets for individual Ministries  Ministry Budget covers all MOE responsibilities  Part of their budget is for provincial operating grants to public schools Provincial Funding School Year Operating Grants ($ Billion) Lift from Previous Year 2004/05$3.877 2005/06$4.027$150 million 2006/07$4.047$20 million 2007/08$4.067$20 million

9.  The funding system provides for:  Student Allocation of $5,806 per FTE student  Allocation of $250 per homeschooler  Enrolment Decline Grant  Unique student needs of ESL ($1,100), aboriginal education ($950), special education Level 1 ($32,000), Level 2 ($16,000), Level 3 ($8,000), and adult education  Teacher salary differential between districts  Unique geographic factors of climate, dispersion, remoteness, school district size, small communities  Transportation and Housing allocation  GAAP Funding Allocation of Provincial Operating Funding

10.  School-age enrolment ranges from 271 to 61,870 fte  Funding varies from $4.7 to $419 million  Average teacher salaries vary from $58,035 and $66,495  Dispersion, remoteness, climate and size of schools vary  Enrollment changes 2004/05 to 2005/06: SD #36 Surrey699 1.14% SD #93 Conseil Scolarie301 9.26% SD #61 Victoria(413) (4.81%) SD #85 Vancouver Island North(41) (8.47%) Total(5,706) (1.01%) School Board Variations

11. School Districts manage financial resources in three funds :  OPERATING FUND  the main operating expenditures of a school district are recorded here.  SPECIAL PURPOSE FUNDS  report the expenditures for funding provided for a specific purpose and as such spending is restricted.  CAPITAL FUND  holds the capital assets of the district of land, buildings, buses and vehicles. Five year capital plan budgets are approved by Boards Operating, Special Purpose & Capital Funds

12.  The majority of school district grants come from provincial grants through the funding allocation system.  In addition, grants are provided for pay equity, provincial resource programs, annual facilities, Community Link etc.  School districts have small amounts of local revenues from rental of facilities, interest revenue on short-term deposits, international students and continuing education. Sources of Revenue for School Boards

13. Provincial Grants95.1% Miscellaneous Revenue 4.2% Operating Surplus 1.7% Referendum 0% School District Sources of Revenue: A Provincial Picture

14.  School Districts allocate their spending between 4 key functional areas:  Instruction School District Operating Spending

15.  School Districts allocate their spending between 4 key functional areas:  District Administration School District Operating Spending

16.  School Districts allocate their spending between 4 key functional areas:  Operating and Maintaining buildings School District Operating Spending

17.  School Districts allocate their spending between 4 key functional areas:  Transporting and Housing Students School District Operating Spending

18. Instruction83.0% Operations & Maintenance11.9% District Administration 3.0% Transportation 2.1% School District Operating Spending: A Provincial Picture Salaries71.7% Employee Benefits15.6% Supplies & Services12.7%

19. Budget Process and Accountability Cycle School Planning & Goal Setting (Involvement of School Community) School Planning Councils Accountability Agreement Budget Goals & Guiding Principles of Board of School Trustees District Budget Preparation, Consultation and Approval Allocation of Budget to Programs and Schools Continuous Process Continuous Process

20. School District Accountability Contracts  The purposes of Accountability Contracts are:  to focus district attention and resources on improving student achievement.  to detail the specific goals that school boards have set as they work to enhance student achievement and to describe the steps they are taking to achieve those goals; and  to communicate these efforts to a variety of audiences  They link and reflect annual school plans.  Incorporate recommendations of the District Reviews  Outline goals, objectives, performance data, strategies and structures.

21. SD #91 Guiding Principles  Addresses board goals  Complies with school act, collective agreements, etc.  Supports school plans and school planning councils  Ensures resources support accountability contracts  Plan/estimate conservatively  Sustainable for three years  Stays within existing resources  Equitable  Understandable  Predictable  Encourages efficiencies  Decision neutral

22.  Project the costs of providing existing services into the next year such as salary and benefits, utilities, etc.  Determine the factors that will change such as student enrolment, inflation, contract changes, one time items  Project revenues, project any surplus or deficit from the previous year and determine net budget position (shortfall or surplus)  Identify options and strategies to address net budget position  Review the guiding principles and priorities from the Board  Finalize decisions Preparation of the Budget

23.  School Districts need to establish their own process for preparation, consultation and approval of their operating budgets. Communication throughout the budget process is vital for the understanding of the decisions and effective implementation  When establishing Budget timelines, Boards need to take into account staffing deadlines and implementation processes Budget Process- A question of Balance

24.  Begin with the end in mind;  Develop strategies to engage the community in the budget process;  Establish consultative committees;  Establish a communications plan;  Set public and staff information and consultation meetings Consultation and Communication

25. Trends/Challenges  Aging population (increased health costs)  Declining enrolment  Increasing proportion of Aboriginal students  Increasing costs  Targeting of Funds  Labour Relations (Ready recommendations)

26. Thank You! Questions?