How Much Budgeting Must You Know?

by HOWARD C. CARLSON
An interim superintendent in a nearby school district recently shared with me how much time he was spending to untangle the financial woes he inherited. The director of business affairs had been moving funds around to cover his budgetary errors over many years and the shady practices finally caught up with him.

His incompetence and underhanded attempts to cover his missteps had left the school district seriously in the red, much to the shock and dismay of the superintendent, the board of education and the community. The district had to make painful cuts to the academic program to right the ship. The business director subsequently was fired, but the debacle also cost the superintendent his job. The board hired an interim superintendent to clean up the mess.

Is this scenario out of the ordinary? Sadly, it is not. Each year I hear of a situation where a superin-tendent somewhere is caught unaware of the true financial picture of the school district. Yet such blindsiding can be prevented. Superintendents can keep their fingers on the budgetary pulse of the district and prevent themselves from ever facing this type of destructive situation.

• Staffing Plans.
Costs of staff salaries and benefits typically make up 85 percent of the school district budget. If things go wrong in this area it can be disastrous.

One way for superintendents to keep track of the district’s staffing costs is to ask the business office to develop a report that compares ongoing staffing changes to what is reflected in the budget. If generated on a monthly or quarterly basis, this can provide information related to how the budget is affected by staffing changes throughout the school year.

• Expenditure Reports.
Another helpful tool is to compare the expenditures by program area to the current budget and the previous school year. This report is simple for business staff to generate and will provide a monthly comparison of budgetary progress.

Reviewing this report enables you to detect whether abnormalities or anomalies are occurring. If you detect problems you can work with business staff in a pro-active manner to understand where the budget, in total, is headed. If adjustments are needed you will know ahead of time and can properly plan for contingencies.

• Revenue Reports.
Not unlike the expenditure report, a revenue report for state and local dollars can be designed to compare revenues to the existing budget and the previous school year. Again, this report is simple to generate and will provide a picture of any variation that may require attention.

One note of caution here is that states flow dollars to school districts using varying methods. You will want to ask your business staff how accurately the district can track revenue throughout the year. Local dollars are normally easy to monitor, but state and federal revenues can pose a greater challenge.

• Student Count Reports.
Student numbers drive the greatest portion of school funding in most states. It is important to understand comparative data that outlines differences between actual enrollment and what was budgeted. This comparison, like the others mentioned, will give the superintendent a picture of where revenues should be headed. Additionally, it allows the district to make changes to the expenditure budget if enrollment changes significantly.

Clearly, many methods allow you to predict enrollment trends, but they all tie back to predicting potential kindergarten enrollment and to the mobility and loss of students to optional programs.

Howard Carlson is superintendent of the Delano Public Schools, 700 Elm Ave. East, Delano, MN 55328. E-mail: hcarlson@delano.k12.mn.us.