Planning and Strategy Phase
The planning and strategy phase is critical to the overall budget process. Without proper planning and strategic vision, decisions regarding the district’s operating budget will lack the efficiency and effectiveness required in investing the district’s resources.
In early November, the Springfield (Massachusetts) Public Schools’ Office of Business and Financial Services creates a budget calendar, which lists activities and key dates for developing the budget. As an essential part of the budgeting process, the budget calendar communicates the overall project timeline and critical deadlines.
The goal is to balance the budget with a positive impact on classrooms and instruction.
Additionally, personnel meet with stakeholders to establish priorities and goals for the coming year and identify the district’s major opportunities and challenges. The objectives identified during these meetings chart the district’s path.
Finally, the office develops projections and assumptions crucial to the budgeting process. These include program changes, contract increases, enrollment projections, and anticipated funding levels to compile in a preliminary budget projection. This procedure gives management an early look at potential challenges in the coming months.
Budget Development Phase
Springfield’s municipal school district is not mandated to raise revenues through taxes. Total funding is determined by a state formula. Because 90.3% of the district’s general funds budget comes from state aid, the district must also follow the state’s budget time frame in estimating its budget.
The budget development phase aligns the district’s strategic priorities and objectives with the required resources. During this phase, the Office of Business and Financial Services distributes to all departments the information they need to facilitate the budget process. Departments return their funding requests with priorities for the upcoming year, identifying specific areas where they would make cuts, should the economic climate warrant it.
The Office of Business and Financial Services compiles departmental requests along with other district-wide costs and forecasted revenues and formulates a budget projection that specifically identifies the district’s budget deficit. Working to balance the budget, we analyze departmental submissions for inefficiencies, inaccuracies, and faulty assumptions.
Performing projections and trend analyses and reviewing collective-bargaining agreements and vendor contarcts are important for accurate budgeting.
Performing projections and trend analyses and reviewing collective-bargaining agreements and vendor contracts are important for accurate budgeting. Springfield Public Schools uses an all-funds approach, using available grants and supplemental funds for the upcoming fiscal year.
If a specific grant or supplemental funding source will no longer be available, the district reviews the programs and services that will be affected and redirects funds accordingly. We then examine other areas of the budget where cuts, efficiencies, or revenues can be realized, and present them to the superintendent’s Budget Advisory Committee for review and recommendations. The goal is to balance the budget with a positive impact on classrooms and instruction.
Budget Projections
Through all phases of the budget process, the Office of Business and Financial Services tracks budget projections to gauge where the district stands fiscally. There are four stages of budget projections:
- Initial projection. An initial forecast of next year’s budget is developed in November. Since most major assumptions are unknown at this point, we use conservative assumptions. This “worst-case scenario” projection allows the district to begin planning potential contingencies.
- Governor’s budget. In late January, the Massachusetts governor releases the recommended budget for the following year. Since the assumptions in the general fund budget rely on the state budget, this gives stakeholders a better idea of the projected revenue.
- Level-services budget. Each March, department chiefs are asked to submit a level-services budget. These budget requests are compiled to establish a baseline for the budget. The level-services projection demonstrates the true budget gap if the district wishes to provide the same level of service as the previous year.
- Final balanced budget. When the budget is finally balanced, a budget projection is released. This projection includes all cuts, additions, and assumption changes that were made to the level-services budget.
Budget Adoption Phase
After the operating budget is balanced, the superintendent’s proposed budget is submitted to the school committee for consideration. The proposed budget is also presented to the mayor as part of the city’s budget process.
During this time, if the state legislature decides to change the revenue amounts from the original recommendations or if the district’s expenditure assumptions change, additional meetings are held to adjust the proposed spending plan.
After final revisions are made, the budget is officially adopted by the school committee and is submitted to the city to be combined with the overall budget for adoption by the city council.
School-Based Budgets
In Springfield, we believe that the leaders closest to the work should play a major part in determining the spending at their schools. Rather than someone in the “central office” deciding what initiatives are important at each school, the district provides each school with significant allocations across all funding sources that empower them to make school-specific decisions on a portfolio of research-based programs, such as tutoring, counseling, interventions, and wraparound services at their school.
After meeting with stakeholders, such as parent–teacher organizations and school staff, school leaders allocate funds within their own spending plans (budgets) toward initiatives that they believe are in the best interest of their school. All spending must align with their school improvement plan. A financial analyst and chief school officer coordinate with principals to build individual school spending plans.
Budget Monitoring
After the budget is adopted, it is time to maintain and monitor all accounts. Departments and schools enter orders, which should coincide with the programs and plans in their budget. If plans change or grants are added, expenses may be reclassified or funds transferred between accounts.
To help keep budgets in line with appropriations, analysts meet with department heads, chief school officers, and principals on a monthly or bimonthly basis to review spending activity. Monthly budget projections are monitored by the chief financial and operations officer and budget director to ensure that any projected deficits or surpluses are addressed appropriately.
These stages in our annual budget development process are designed to guide participants in constructing a budget along with its expenditures in a timely and transparent manner. Every step in this cyclical process is important to the overall budgeting goal.