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Take a Walk through School Budgeting Process

posted May 31, 2018, 1:18 PM by Brenda Williams
Depending on who you are talking to, budgeting is one of those things that you really don’t want to do, but you do it anyway because it’s good for you and your family. It’s like taking vitamins, getting that flu shot or giving the cat a bath. Budgeting is an ongoing task as life happens and something the majority of us can improve on every day. According to a Gallup Poll, “only thirty percent of Americans prepare a detailed written or computerized household budget each month that tracks their income and expenses.” For many of us, two-thirds of Americans, do not budget. Budgeting and sticking to a budget is essential, especially in school finance. So, what does budgeting look like in the world of school finance? Allow me to share with you the roadmap to a fiscally sound and responsible District that places conservancy as a high priority when it comes to our taxpayers' dollars.

A budget requires a reliable roadmap that results in good stewardship of public funds. As simple as budgeting might sound, the work behind the scenes is an integral part of impacting the work we do every day in our schools to ensure we are making a positive difference in the lives of our students, families, community members and employees.

The school budget process and timeline run on a fiscal year, July 1st to June 30th each year. As we work through the budget process and timeline at a macro level there are multiple years involved in the process; in fact, three years. It begins in the fall of each year with levy projections and a finalized levy in December. The levy impacts the school district budget a full calendar year later. Starting in January, after the levy is finalized, and through February, resource tools and content experts provide data to aid us in projecting enrollment for the next school year, which also is a factor in the amount of revenue we receive. Eighty percent of our funding for each school year comes in the form of state aid which is based on an average daily membership of students in our classrooms multiplied by an amount designated by the State of Minnesota and the Department of Education. An accurate enrollment projection is key to knowing how much money we will have to work within any given year.

In early spring, meetings with principals and department leaders take place to build an expenditure budget that meets the needs of the District for the upcoming year. In May, the School Board sees the preliminary budget for the first time and provides input and direction for finalizing a budget by June 30th, which is state law. The goal every year is to establish a balanced budget (money coming in equals money going out). Another important part of school finance is having the capacity to rely on a savings comparable to 15% of our annual expenses to safeguard from having to make cuts in the budget when funding is not at a level that supports the needs of the District. As the new school year begins, continuous monitoring of revenue coming into our bank account and approval and payment of expenditures is all part of a day’s work. In the event there are changes to be made to the budget throughout the year, there are options to revise the budget based on several factors, one being most prevalent is the actual number of students in the fall compared to the enrollment projected back in January of the previous year. If enrollment is higher than projected, additional revenue will be a factor and if the opposite is true, less revenue. Ongoing due diligence is important to track these types of changes throughout the year. In our world of school finance, reasonable budgeting supports our mission to “inspire a passion for learning to ensure success for every student.” Warren Buffet, business magnate, investor, and philanthropist says, “Someone is sitting in the shade today because someone planted a tree a long time ago.” Together, let’s plant a tree!

-- Heidi Hagen, Business Manager