Chapter 12
Administering the School Budget
This multimedia product and its contents are protected under copyright law.
The following are prohibited by law: any public performance or display, including transmission of any image over
a network; preparation of any derivative work, including the extraction, in whole or in part,
of any images; any rental, lease, or lending of the program.
Copyright © Allyn & Bacon 2008
Evolution of Budgetary Practices
•early development of budgetary practices occurred in England
•slow development in America
•first law for national budget 1921
•urban school systems developed budgetary patterns first
•gradually states enacted law
Copyright © Allyn & Bacon 2008
The Budget
•budget--a financial plan with four elements
planning
receiving funds
spending funds
evaluating results
Copyright © Allyn & Bacon 2008
Steps for Developing a Financial Plan
Evaluation
Needs
Budget
Goals
Programs
Objectives
Copyright © Allyn & Bacon 2008
Plan of Action
for the
Future
Public
Information
System
System of
Management
Controls
Appraisal of
Past
Activities
Benefits of
Budgeting
Orderly
Planning and
Coordination
Formulation of
Work Plans
Expenditures
and
Estimating
Revenues
Copyright © Allyn & Bacon 2008
•purposes of budgetary practices
projects proposed school program and education plan for fiscal
year
shows sources of funds, anticipated expenditures and
allocation of authority for administering budgetary items
informs public about educational program
provides a guide for evaluating a year’s program and making
past comparisons
motivating for careful planning, establishing systems of
controls, and efficient and effective expenditures
shows relationship of three units of government
Copyright © Allyn & Bacon 2008
De Young’s Three Dimensions of a Budget
Revenue Plan
Cost of the
Program
Educational Program
Copyright © Allyn & Bacon 2008
•determining the educational program
directly related to purposes and objectives of the school
superintendents responsible for involving staff, school board
and parent groups in setting policies and objectives
•preparing the budget document
personnel need budget allotments and expenditures
some districts-teachers indicate wants and needs for
educational program
using previous year’s budget as sole basis perpetuates
inequities and imbalances
Copyright © Allyn & Bacon 2008
•the budgetary process
tentative budget prepared and presented to the board
tentative budget accepted
summaries of tentative budget prepared
superintendent and board prepare for a budget hearing
Copyright © Allyn & Bacon 2008
•suggested materials to accompany the budget
letter of transmittal
statement of introduction related to school philosophy
justification
recapitulations of sections of budget
salary schedules
statistical summary of salary program
enrollment with trends and projections
expenditure and revenue items for 2-3 previous years
Copyright © Allyn & Bacon 2008
•the budget hearing
use audiovisual materials
all states don’t require a hearing
final approval rests with school board
city or county boards usually pass budget levy in fiscally
dependent districts
•general provisions of the budget
should provide for emergencies using a contingency fund
provisions for an amount controlled by a percentage of state
law at beginning of fiscal period
comparisons of new budget items with the past 1-2 years
establishing of priorities
Copyright © Allyn & Bacon 2008
Administration of the Budget
•formally adopted budget effective on 1st day of new fiscal period
•budget daily guide for expenditure of school funds
•purpose of budget—not to save money but to spend it wisely and
expeditiously
•evaluation of the budget
board of education can make changes within legal
requirements
responsibility of superintendents to demonstrate budget is
helping district to achieve its main processes and
purposes
budget is business of all people in the district
superintendent’s responsibility to keep board/public
informed and determine the effectiveness of the
budget
Copyright © Allyn & Bacon 2008
•the budget calendar
should be specific
planning should begin 1st day of fiscal year for next year
organized to include minimum requirements
fixed dates should be predetermined
must follow state code
overlaps and includes operation of current budget
finalizes previous year’s budget
plans for following year
Copyright © Allyn & Bacon 2008
Budgeting at the School Level
•principals-chief financial officers of schools
•sources of funds at school need to be identified
•all funds should be processed through principal’s office
•good practices
signed, prenumbered receipts
record of all transactions
deposits made daily and copies of deposit slips kept
specific notation made for each transaction
flexibility one expenditure side of ledger essential
idle funds should be invested
fees and other revenues used for those who paid them
Copyright © Allyn & Bacon 2008
•monthly reports needed
•independent, time audit should be conducted
Copyright © Allyn & Bacon 2008
School/District Coordination
•most principals have limited formal training in principles of accounting
•variety of funds used in schools
•principals need familiarity with day-to-day responsibilities of school
finance
•principals need to monitor budgets and appropriate expenditures
•district expenditure procedures
requisition form should be used
principal should designate fund category on requisition
purchase order should be generated and signed by
appropriate person
purchase order mailed to vendor
invoice should be signed when purchase received
Copyright © Allyn & Bacon 2008
payment made by check when invoice submitted to
school
copy of purchase order, invoice and check filed together
•revolving imprest fund of $500 approved by board
used for nominal purchases not requiring purchase order
should be charged to proper account
•limited purchase draft
district check requiring two signatures not to exceed
certain amount
shouldn’t mingle district and personal funds
•annual order sometimes used to pool all school requests
•two yearly budgets may overlap
Copyright © Allyn & Bacon 2008
Systems of Budget Administration
•systems analysis
a way of looking at the functions in administration
philosophy of how to assist decisions makers with complex
problem
•elements of systems analysis
formulation
search
explanation
interpretation
verification
structuring of the problem, design of the analysis, and
conceptual framework
Copyright © Allyn & Bacon 2008
•planning/programming/budget systems (PPBS)
introduced by U.S. Department of Defense
designed to provide better and more objective information
for planning educational programs and making
choices among alternatives
way of extending planning period and duration of a program
Copyright © Allyn & Bacon 2008
PPBS Cycle
adding to &
improving
alternative
plans
establish
objective goals
determining
financial cost
of
alternative
plans
improving the
objectives
evaluating
results
Copyright © Allyn & Bacon 2008
•zero-based budgeting (ZBB)
developed 1970’s-Phyrr
cardinal principle-nothing is sacred
every program must be justified to receive continued
funding
no reference to previous appropriations
decision-making from lowest levels of management
starting point is zero
a decision-making process, working bottom-up
emphasizes identifying, ranking and choosing alternatives
advantages—annual evaluation and determination of
programs, development of priorities with alternatives
Copyright © Allyn & Bacon 2008
critics of ZBB-increased paperwork and administrative
time, too complicated and impractical for small
districts
•site-based budgeting (SBB)
teachers, community and administration develop the
budget
a decentralized system
need to match student need with available resources
central office become facilitators
administrative, capital outlay and maintenance costs
remain district responsibility
gives principal and staff more control
Copyright © Allyn & Bacon 2008
•strategic planning
setting district goals for 3-5 years
board of education
adopts plan
broad segment of
community go
through intensive training
action teams
organized
mission statement designed,
belief statements outlined,
goals or vision
statements
defined
Copyright © Allyn & Bacon 2008
•total quality management (TQM)
basis for total organization reaching a shared vision of
excellence
group task force collects data to analyze a problem
task force recommends solutions based on data
solution is selected and planned, implemented and
evaluated
Copyright © Allyn & Bacon 2008
Challenges of Leadership
Objectives
Criterion
(Criteria)
Alternatives
Common
Elements
of
Systems
Analysis
Model(s)
Costs
Copyright © Allyn & Bacon 2008