1 Something that many school districts have in
common these days are budget challenges.
Successful school officials are immersed in budgetary issues and have a
keen understanding of the districts financial position, but what about the
general public? Obtain a copy of a
monthly financial report from a board of education meeting. From it, develop an interpretation of what
could be understood by a reasonably perceptive layperson. Please share what that interpretation might
be.
A budget is the primary tool of public policy. The document at hand will explain the impact of changes on programs and agencies. The school budget is a financial plan for how a school will fund its educational goal. The budget will detailed a financial information about the school. The budget will lists specific needs that the money will go to and what the money will be used for.
ReplyDeleteAs many districts go through struggles and challenges so is my district, Detroit Public Schools. In this budget I observed that it has three important headings that the principal must concentrate. They are as follows: Revenue, Expenditures and other financial sources. The revenue encompasses the different funding sources where the money will come from such as local, state and federal funding. The expenditures will show where the funding is going based on enrollment, special needs of students, building operation, special programs, security needs, food services, etc. The school allocation goes into paying for staffing and personnel, textbooks, community services, facilities acquisitions & improvement, and categorical programs such as grants. In the budget one can distinguish that the highest expenditure is instructional staff support. Something to keep in mind at all times because, as a school leader, one needs to be aware what would be one of the high cost to run a school. In this budget operational & maintenance would be the second highest.
Usually the formula to analyze a budget would be Owned - Owed = Net worth. In accounting terms, these wordings will be replaced by Assets-Liabilities = Equity.
Assets are things owned (Revenue)
Liabilities are things owed (Expenditures)
Equity is the difference between both
This budget shows that it has been amended several times in order to have a balanced budget. The difference between the three columns is to point out the areas that have been increased or decreased accordingly to the financial needs.
To summarize this budget, as Guthrie points out on his textbook "Modern School Business Administration A Planning Approach", I can say that accounting deals with activities and events that affect both operational inputs ( money and material) and the school's program by recording, classifying, analyzing and interpreting the data. This is done within a given date and evaluation of the status and results of operations in terms of established objectives. Therefore, accounting function becomes an integral part of the planning process employed by the educational team.
The experience that I have acquired through this class, voice thread, text and research has been enlightening because I have been able to understand how crucial is for a school leader to be knowledgeable of the necessary pieces in the budget in order to make the right decision when creating a plan, understanding the funding source purpose, expenditure and revenues, and adhering to the mandates and constraints that comes with the territory. Furthermore, as a layperson's view, it is very important that the principal or site base management be very inquisitive of a school budget report because it will be the determinate factor to keep the school open or close. In addition, through its external or internal audits it will be able to verify accuracy, completeness and it will assist to improve practices.
I obtained a copy of Ithaca Public Schools Monthly Financial Report for February 2013. The report was a lot easier to read than other school districts monthly reports. Ithaca’s report was broken up into three different sections, revenues, expenditures, and excess revenue. Each section is broken down into more specific sections.
ReplyDeleteIn the first column of the report is the adopted budget for the 2012-2013 school year. This is the budget that the school is aiming to meet throughout the school year. Then in the next column is an updated list of the revenues, expenditures, and excess revenue activity year to date. The column shows exactly how much money the school has gained and how much money the school has spent.
The report even has a column of the remaining budget to date. It is very easy for a person to quickly see how much money the school has profited and how much money the school has spent. The final column is the percentage of the remaining budget. It is really simple for a reader to look at the one page report and understand the budget based on the percentages. By looking at the percentages, people can quickly take focus on any area of the budget that is struggling. There is also an additional page that explains each of the specific revenues and specific expenditures. Ithaca’s Monthly Financial Report was very easy to read. The other monthly financial reports I researched were very long and drawn out.
A reasonably perceptive layperson would be able to read and understand Ithaca’s Monthly Financial Report. From the information given in the report, a person would be able to ask principals (site-based managers) specific questions dealing with the budget. This gives community members a strong understanding of the budget where they can give beneficial input if needed.
The way that Ithaca’s Monthly Financial Report is presented assists principals to make the most cost efficient decisions for the school district. From this report, principals develop some basic knowledge of accounting practices so that they can deal with building budgets. Principals in site based management have a lot of accounts and account codes (used to track expenditures) they have to deal with throughout the year. A monthly financial report can assure that principals are recording the data correctly so that there isn’t a problem when the auditors review the accounts each year. The report can be a way that a district can audit itself throughout the year.
Principals also have to be aware of grants, state funds, federal funds, and local funds. For principals at Ithaca, purchase order procedures are accounting intense functions that have to be assigned to the correct account so that they stay within the requirements of the law, both state and federal.
Site based principals need to be able to read an annual budget and also monthly building budget report. The monthly financial budget determines how to categorize each purchase order. Principals and school districts use the report to monitor when certain accounts are depleted. An example my principal gave from this year, is that the school had no more money for professional development. She said that she could no longer approve teachers the opportunity to attend professional development conferences and workshops. This affects the school district as a whole because teachers are not prepared to the best of their ability for the students.
With the budget constraints of this time it is very important that funds are reported accurately. My principal appreciates that her report shows the adopted budget as well as the budget remaining. Principals also have to know how to handle fund raising money and all of the other revenues that get generated from all of the various activities.
Principals need a lot of practice and guidance when dealing with reports and budgeting. Financial reports and budgeting can be a very difficult and long process. The more principals learn from the reports and audits the more principals can ensure financial efficiency.
Thank you Jessie for your thoughtful response. Principals and school leaders should have the knowledge you described not only to guide the district but also to maintain the public trust and confidence. Dr.J
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ReplyDeleteHello,
ReplyDeleteI had the honor of attending a board meeting in February. During the board meeting, the members discussed professional development costs, 8th grade trip, staff changes and MAP results (district testing of students’ academic results from the winter testing cycle). The board focused on the cost associated with the professional development that occurred and will occur within the building and they discussed their own professional development.
As they worked through the financial document (budget), I was a little confused. I did notice that the budget was broken down into categories and included the funding sources associated with each category. The board members were discussing the professional development needs of the staff and some of the members did not understand the purpose of the professional development that was identified and implemented. Another board member clarified for the members that did not understand. I was also asked how the information gained from the professional development was used in the building and by the staff. I had to state the information in "laymen" terms and not in educational jargon. I also learned that revenue within our budget is also allocated to the professional development of the board. Actually, I learned they wanted to spend approximately $10,000.00 on a professional development trip for themselves. I was completely surprised.
In addition to discussing and explaining the professional development needs of the staff, they also discussed staffing within the building and wanted to know how all of the support staff was being utilized. The principal had to justify (legally) how the support staff helps support students and how their roles does help student learning and impacts our student achievement results.
I learned the principal has to write the report from a legal and educational perspective but they must also be able to explain and support with evidence what the report/budget means. The community, with all of its stakeholders, may not understand the document as written. Therefore, the principal must be able to translate it fluently into laymen's terms. They must be allowed to send the message appropriatley to the target audience and it must not appear that the principal is "talking down" to them.
I was surprised to read about the Board spending 10k on their PD and reading more about what the training would look like would be interesting. JMJ
DeleteI looked at the financial report for Plymouth-Canton Community Schools, as of February 28, 2013. The financial report is organized in a series of tables. The first table is a summary table showing both major categories of revenue and expenditures. This is followed by a more detailed look at revenues sources in one table and separate tables that show details expenditures reported both from a functional and object level. The report finishes a series of graphs showing year to date expenditures for five major categories. The graphs are a nice visual to help the layperson understand district expenditures.
ReplyDeleteAll the tables are organized the same in terms of the information in the seven columns. To provide a historical perspective, data for the previous school year are shown in the first three columns. The first column shows the final actual revenue/expenditure, the second column contains year to date (YTD) information for the same date in the previous year, and the third column shows YTD as a percent of the final. Combined, this information allows one to see the progress throughout the school year. It is particularly helpful to make sure that there won’t be a deficit by the end of the year due to a shortfall in revenue or overspending. The four columns for the current year are the same except that there are two budget columns. The first is the original budget and the second is the current updated budget.
The line items on the revenue detail are organized by major sources of funding: local, intermediate, state, and federal. The line items are largely self-explanatory and accessible to laypersons. On the revenue side, the tables in this report highlight the loss of revenue from the previous year. This is an important piece to be able to communicate to district staff and the public. The tables also highlight how much revenues can change during the school year. Revenues from local sources increased by nearly $5 million from the original to current budget. Unfortunately, these increases were nearly offset by cuts in the State’s foundation allowance.
On the expenditure side, the major expenditure categories are instruction, supporting services, and other financing uses. Details for the functional level expenditures follow the program-oriented accounting systems and a 3 digit code is shown after each item. Within instruction, it is broken down by instructional level (elementary, middle, high school) with special education separated out, as well as adult education, career and technical education, and compensatory education.
In addition to showing expenditures by function level, there is a separate table that gives expenditures by object level. This alternative accounting reporting allows the reader to see expenditures broken out by keys categories such as wages, benefits, purchased services, supplies and material, utilities, capital outlay, and other. This alternative view of expenditures complements the function level view by allowing the reader to look at different aspects of district expenditures. Function level reporting permits one to see where the money is spent by program and provides insight into the district’s program priorities. Object level reporting allows one to see the major drivers in the district’s costs. Is it salaries, benefits, or are there other factors?
As a principal the monthly financial report is helpful in tracking my expenditures and understanding where the district is as a whole. While I have limited control over revenues, it is important to understand the source of the revenues and also whether there are major changes in the level of revenues that will impact my programs. Overall, I feel the Plymouth-Canton financial report is fairly easy for the layperson to understand. This is important for me as a principal because I want to be able to have a document I can use to effectively communicate to staff and parents.
The ease of understanding is also demonstrative of the transparency that the public has come to expect from their school systems.
DeleteAfter reviewing the financial report for the Atlanta Public Schools from their April board meeting and viewing it as a layperson and as a building principal two very different perspectives are taken away. From the laypersons perspective there is a lot to be curious about and questions when it comes to the ways that the district generates revenue, or expects to generate revenue. There is also some questioning that would come in to mind when considered expenditures. The difficult thing about the budget report from the beginning is that it is district wide. Not being able to see a breakdown by school or by area automatically raises the flag in my mind as a community member of an under resourced community where we have witnessed school closings, is equity being taken into account here? Without a breakout of these figures there is no way to tell, and with the recent scandal of the district regarding cheating and the financial mismanagement issues of neighboring districts, this is unsettling. As for the revenue streams, outside of taxes and grants, some of the other ways the district expects to receive funds were interesting. For instance, the district expects to receive $10,000 worth of funding from tuition. Being a public school district, what would they be charging tuition for? There is also a line item for interest on investments that has greatly under achieved year-to-date. As a layperson, I’d be very curious about what these investments were. There is also a line item for “miscellaneous local” that shows funding received, but nothing budgeted in this category. Hodge podge categories like this raise questions in the mind of people not close to the budget. What is this money and where did it come from? Can we expect to receive it in the future? Lastly, revenues are only at 84% of what was budgeted and the same was true of the previous year, is some vastly miscalculating or is the budget not well figured? This seems like a large variance at this point in the fiscal year so as a layperson I would be concerned the district will not be able to meet all of its obligations in the end. On the expenditure side there is the same lack of clarity about line items. The one that sticks out is “other” which has a budget upwards of $8 million dollars, yet only a little over $1 million has spent. What falls under other? This does not appear to be very transparent or track able and raises questions about the stewardship of public money in the eyes of the lay person.
ReplyDeleteAs a building leader I would view this financial report as extremely unclear and insufficient to share with staff, community members, or parents of a school. I find the wording on the categories vague and over simplified to the point that there is too much room for error. The large variances automatically raise questions that would be difficult to overcome. I think that the approach to budgeting by the district should be less veiled for the purpose of gaining and maintaining public confidence in understanding the financial position of the district. It is very important for parents, community members, and stakeholders to see exactly how the goals of the school will be met through financial sustainability and solvency and this is not apparent on a budget that contains categories which are undefined and not budgeted for. I think this budget highlights one of the positives of site-based management. Dealing with a smaller amount of funds and the ability to walk through these line items with lay persons in such a way that they may understand and be competent themselves is extremely important and using this type of reporting from a centralized perspective throws the whole thing into a gray undefined space that may be hard to grain credibility and trust from.
APS has definitely endured their share of struggles recently and most of them headlined in the AJC paper. Your skepticism is understandable.
DeleteThe financial report I was able to obtain was one from back in June of 2012 for Central Montcalm Public Schools. This was a particular one in that it was an approval for the 2012-13 budget and an acceptance of the results of the 2011-12 budget.
ReplyDeleteWhen you're looking at the financial report, you need to take into consideration that there are quite a few terms on here that are difficult to put together. The Revenues mentioned at the beginning are the local, state, and federal funds the district receives and has to work with for the year. They mention a balance of $15,971,453 as the general balance the school has to spend for the year. A list of how the moneys will be spent is listed below. They break down the spending of each piece in the general education fund from instructional and student support to building maintenance and support staff. The report then goes on to mention the expenditures of the food service and the federal aid.
The report then goes on to get approval from the board for the upcoming school year that will begin in July. The general fund balance took a significant hit with $1.5 million decrease from the previous year. This was due to a decrease in revenue from state and federal aid. This could be attained from different reasons, more than likely it is the decrease in student population in the district.
I obtained the financial report from the Rockford Public Schools Board of Education meeting from July 8th, 2013. Included in every RPS Board Agenda is a statement of monthly bills. There are only eleven items listed and they are rather vague. Furthermore, for a layman, some of the terminology would be confusing. Being in education, I can decipher or sort of guess at what is included in the different categories. As a layman that, task would be more problem some.
ReplyDeleteFirst there are categories within the report that are vague enough that a layman would not what was included. For example, ‘Payroll’ is rather straight forward, yet ‘Building & Site’ and ‘Balance General Fund’ expenditures are a bit more bewildering. Questions I may have include, “Why is the district using a credit card for fuel,” “What is the world is ‘Northview Tuition’?” and “What services are supplied by ‘Great America Fin’l Svc’?”
Noteworthy is that the presentation of general fund bills portion of the agenda is under the larger title heading ‘Action Items-Consent Agenda.’ Having been to these meetings before I know that the Action Items are passed without explanation as part of a larger piece of the agenda. The only way a layman or person in general attendance at the meeting would know that the presentation of bills was passed or what was included is if they were examining the consent agenda that accompanies the meetings. Significant to note, the agenda does include the following language in the budget portion, “As always, please feel free to contact this office if there are any questions or concerns. You are certainly welcome to stop in and review any of the bills.” This line of communication being open for residents is impressive, and perhaps their motive is to simplify the consent agenda, but as a layman I would be confused by some of the category names while appreciative of the audience for concerns.
I obtained a copy of the financial report for a BC Board of Education meeting for January 2013, and obtained the following interpretation.
ReplyDeleteJust looking through the financial report, and not being a financial analyst in any sense, it is a little surprising on costs. The largest cost associated with the school is for school personnel which includes all staff. I can see from the perspective of an outsider though, the first thought is all these wage payments and insurance payments are made for teachers and administrators! In reality though, working within the school system these expenditures are also for support staff like bus drivers, Para-pros, kitchen staff, custodians and maintenance workers, which is also a fairly large group of personnel.
The other large expenditures are towards paying for the lunch program and then bills for electricity, heating and cooling. It was surprising to see the amount of smaller expenditures for athletics that seem to add up. The overall spending for the report I looked at was nearly $350 thousand dollars. As a community member I would look at this and think that if our school is in financial difficulty it is being caused by the overpaid teachers and administrators. Administrators would have to take it upon themselves to make sure they correct any misinterpretation to limit negative impact on the schools community support.
The financial report that I obtained and am basing this post off of is from the school district of Royal Oak. First off, the main thing that the layperson would notice is that it is not a standalone document; it is a portion of the “Spring State of the District” address, which also talks about school tests scores, availability of property, census numbers, bussing, and facilities.
ReplyDeleteThe information is created on a basic PowerPoint presentation, which helps with the ease and reading of the information. The district also uses the headings well within the presentation, as it explains to the reader exactly what the information is talking about. For instance, there is a slide entitled “2013 Sinking Fund / Property Maintenance Projects,” and underneath is a well written out explanation of what the projects are, what school is being worked on, and the progress of the project.
Though the formatting and short bullet points are easy for the layperson to handle, the tough part begins when trying to read the graphs and understanding the educational acronyms. The graphs tend to bounce around from one year to the other, which could be confusing for someone who was just trying to find a base number of dollars. The graphs also switch from bar to line, to plot, and then finally back to a table. It seems that the average layperson would become quickly frustrated with having to go back and check numbers and compare and contrast figures from multiple graphs.
Though the graphs can be confusing, the absolute one thing that would turn away the layperson from really getting into the financial report of the school is the use of educational acronyms. The terms PA-152, MPSERS, and J-20 all come up multiple times in the presentation, yet are not clearly identified as to what it means. These terms are strictly for educators and not for the school community. This is similar to when a staff meeting is run and the person in charge is really taking a lot of time explaining the process of giving out and maintaining lockers, but does not realize the 2/3 of the staff do not use lockers!
The presentation ends with a plea to continue to put pressure on the state government to help stop legislation to cutting funds, but by then, the layperson would have lost interest and not even read such an important piece of information.
Well the above comments amount to the same outcome, that we have in beautiful Ohio, the fed has reduced education funds to the states, the states have reduced funds to the school districts, and our statehouse wants our districts to depend on levies to make up the shortfall. Our citizens that vote for the levies have a clear vision of where the money goes from any scource, this info is available on the district website in various forms, we know the bulk of our monies go to the teachers and administratiors. but still we spend less per student and the grades the citizens see on the state report card does not match our outlay for the teachers. If we have more levies, increase pay and benefits to everyone that comes in contact with a student, is that the answer? I subbed for an art class Friday and one the students in the class a freshman, refused a handout I gave him, he said "I don't do work" I asked "why are you here"? his reply was I have to be, there are many students in the district and all districts with the same motivation, will additional monies help them?
ReplyDeleteI commented that the information about spending in the local school district was available in many forms, well they know have a 142 page story about spending so go to the table that shows the expenditures for personnel and benefits if you have time, it tells the story.
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