Budgeting is one of the most labor-intensive undertakings a school district will ever experience.
It's also one of the most vital. Your district's budget is about more than fiscal planning — it's a ledger of your promises to the community, including faculty and students.
Let's talk about how you can make sure you fulfill those promises while also helping administrators set better goals and allocate resources more effectively. It all starts with making the right budgeting decisions.
The school budgeting process can be broken down into four broad steps: reviewing, planning, forecasting, and implementation.
Reviewing prior years is crucial for ensuring your current year's budget is accurate — mostly because it allows you to identify areas where overspending or underspending occurred. Make sure you consider your cost base during these reviews, and benchmark your budgets against similar schools or school districts. You should also assess how well those budgets aligned with your forecasts if any exist.
Remember: Unless you start your budget from scratch, you're basically writing a sequel to prior years. Take a look at last year's budget and how well it aligns with your forecasts.
You'll also want to look at any lapsed or uncommitted budget appropriations so they can be addressed in the current year.
Next, note your staffing, accommodation, and resource needs for the coming year. You'll need to model a range of cost and income scenarios based on your data and benchmarks. You'll also want to consider critical factors such as:
Some educational budgets are built by projecting the revenue and then using that to tell the administrative side what they can afford. While that's fine for most districts, we still recommend setting priorities for the team. Start by reaching out to administration for a statement of budgetary priorities.
These may include additional support for special education students, reducing class size, adding emotional learning to the curriculum, learning aftercare, or raising test scores. All of these factors must be developed outside the business environment. However, the business must keep the admittance to rank priorities, define them, and keep expenditure discussions on track.
Getting accurate staffing composition costs can be challenging for any budget development team, though it's a bit easier if you're within the contract terms for your district’s collective bargaining agreement, the process can be easier for you. In that case, the only real unknowns in your budget are retirements, disability, or maternity leaves.
With that said, unsettled areas in a collective bargaining agreement can cause problems. If that is the case, you might have to use different tactics for your budget.
You should now assemble your models into several "best guess" three-to-five-year forecasts for your budget. We recommend using a combination of historical data and benchmarks from both your district and other school districts to try to get as accurate a prediction as possible. You'll want to account for factors including, but not limited to:
AI-driven analytics can help immensely in terms of making more accurate predictions, as you'll be able to leverage algorithms capable of parsing and assessing far larger datasets than if you were working manually.
Once expenditures match revenues, you can share the budget with the administrative team, board, staff members, and the community for finalization and approval. Just bear in mind that as priorities shift, you may still need to make the occasional modification.
Once your budget gets approval from the governing body, it's time for implementation. Make sure you continuously monitor all areas of your spending, and review your budget monthly to identify areas of potential risk. This feeds back into step one, providing you with datapoints to assist in the next year's review and forecasting.
A good school budget starts with a solid foundation — so with that in mind, these best practices will get you on the right track.
A budget calendar plays a key role in both planning and execution, specifying deadlines and milestones while also designating responsibilities to any involved stakeholders. It can also serve as an index for tracking your development process. Build yours by working backward from the current year, then share it with both the board of education and your administrative team.
According to the National Center for Education Statistics, staff salaries represent the largest percentage of most education budgets. With that in mind, it's essential that you're as accurate as possible. That means you'll need to build a staffing roster and account, to the best of your ability, for new hires, retirements, lateral movements, leaves, terminations, and resignations.
For certain expenses, it's better to work with an experienced professional rather than attempting to forecast costs on your own. Health insurance is one of the best examples of this in practice, mostly because of how complex it can be to plan. This is, at least in part, due to the fact that while some districts provide their own insurance, others belong to regional or state joint insurance funds.
Making cuts is part of the process, like it or not. At some point, you're going to need to remove a line item or two from your budget. Ranking your line items in order of importance will make it a lot easier to figure out what to axe — especially since you can do it without engaging in endless back-and-forth conversations.
A financial management system like what you'd find in an enterprise resource planning (ERP) tool takes the guesswork out of your budget planting, allowing you to maintain greater visibility into and control over transactions and financial data. Some platforms even incorporate HRP and workforce management, making things even easier on your accounting team.
Need help managing the budgeting needs of your educational institution? That's our specialty — hosted in the Microsoft intelligent cloud, Sparkrock simplifies purchasing, reporting, budgeting, and workforce management. Book a demo to learn more.