Budget Preparation
Who, What, Why, When, Where
By Nancy Mongon
SBA, Old Bridge Township Public Schools
Who Prepares the Budget?
The SBA prepares the budget document by assigning a dollar value to support the programs and
policies that the members of the Board of Education and the Chief School Administrator have
adopted for the school district.
What is a Budget?
The school district budget identifies the sources of revenue and the planned expenditures during
the fiscal year, July 1 through June 30. The majority of any school budget is made up of fixed
costs and contractual obligations, such as salaries and benefits.
Why is there a Budget?
According to laws, 18A:7F-5 and 18A:7F-6, districts must prepare an itemized budget and
submit the budget to the Executive County Superintendent of Schools. The submission date is
usually the first week of March, after the Governor’s Budget Address and state aid is announced.
When and Where Does the Budget Process Begin?
The budget process begins and ends in the school business office, no matter how circuitous the
route. However, when asked, any SBA will probably say the budget process never ends. The sun
sets on the last budget, rises on the current budget, and the next budget is a twinkle in the SBA’s
eyes.
The Budget Process
The first step I take in the budget process is to ensure that all staff are accounted for in their
proper line item account, on their proper step and salary guide; staff who have retired or were
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terminated are removed; new hires have been added; and staff budgeted in NCLB or IDEA
applications are charged to the grants and not local funds.
If your district has a contract in place for the new school year, you can budget salary costs. If
not, what do you budget? Faced with a two percent tax levy cap, my approach has been to
budget estimated salaries at the mandated cap.
Once staffing is in place, you look at the contractual benefits. Additional wrinkles have arisen as
a result of Chapter 78 Legislation (covered in a separate article). What is beneficial to the
budget’s bottom line is the offset to premium costs of requiring no less than a 1.5% contribution
of contractual salaries toward health benefits. For those districts in the state health benefits plan,
contributions toward medical and prescription apply; for those in private health plans,
contributions are based on medical, prescription, dental and vision plans.
During this time of staffing and benefit calculations, your district’s administrators, directors,
principals and supervisors are sharpening their #2 pencils and working on their budget requests
to meet the needs of anticipated enrollment. There may be a need for new adoptions due to
mandated changes in Core Curriculum Content Standards. The Director of Special Services will
be looking at current placements and requirements for the next school year. The Facilities
Director may recommend capital improvement projects. The Transportation Director may
require new buses or vans. Meetings are held with administrators to review and prioritize based
on the level of funding.
Meetings, Meetings, and More Meetings
Starting in October, the board finance committee meets monthly to receive input from the
community and the entire board of education. These meetings become more frequent as the
budget/board election calendar and guidelines are set by the NJ Department of Education and
released, usually in mid-January.
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Transfers, Administrative Costs and February 1
Districts may not submit a budget in which the 2011-12 proposed per pupil administrative costs
exceed the lesser of either the prior year adjusted as of February 1 or the per pupil cost regional
limit. What does this mean? If your administrative costs are $1,000 per pupil as of your
February 1 adjusted budget for your Program Function Accounts including; General
Administration (230), School Administration (240), and Central Services and Administrative
Information Technology (251/252), and your 2012-13 cannot exceed $1,000 per pupil, even if
your regional limit is $1,500! What do you do? Monitor, assess and transfer up to 10% into
these cost centers prior to the February 1 deadline, especially if your enrollment is flat or
decreasing.
Christmas in February
After the Governor’s budget address in February, every SBA looks forward to their belated
Christmas present, known as state aid allocations. These are the make or break figures for your
district, unless you have a private benefactor or entrepreneur with an open wallet to add revenue.
Your tax levy may increase by a maximum of two percent per year. Your excess fund balance
must be included as revenue, as well as any other additional fund balance you have in the bank
for a rainy day. Otherwise, interest on investments or miscellaneous revenue and state aid will
cover the costs of staff, programs and services for your district.
Beware the Ides of March
In March, after you have input the budget into the Department of Education Network Software
(DOENET) and received the required “Edits Were Run and No Errors Were Detected” message,
the budget package is submitted to the County Superintendent. Following his/her approval, the
budget and the public hearing, usually scheduled the last week of March, are advertised. The
proposed budget is adopted at the public hearing and goes to the voters for approval.
April Showers Bring May Flowers
On the third Tuesday in April the registered voters of your district get to say yeah or nay to the
proposed budget. If they say "yeah," you are done. Get your A4F (Tax Levy Calculation) signed
by the District Clerk and transmit your budget.
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If the voters say no, you must follow the infamous Defeated Budget Procedures: schedule
meetings with the school board and the township council as well as the township appointed
auditor, to review your budget and supporting documentation. This process must be complete by
approximately mid-May to ensure that a tax rate can be set for the tax bill. If your district is
providing services that exceed the core curriculum content standards, which is calculated by the
budget software, your appeals options are limited, if at all.
The End
Remember to stay calm, take yoga breaths, and seek assistance from the available - always
helpful - support provided by NJASBO, your County Business Administrator and your fellow
SBAs.
Nancy Mongon is SBA for Old Bridge Township Public Schools. She can be reached at
(732) 290-3952 or nmongon@obps.org.
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