managing the budget process: school district budgeting€¦ · managing the budget process: school...
TRANSCRIPT
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Managing the Budget Process:
School District Budgeting
Prepared with permission from the GFOA Budget Alliance
Florida School Finance Officers Association June 23, 2016
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Background
“Spending Money Smartly”
• Gates Foundation Project – Started in June 2013o 4 Districts included in original project
– Lake County Schools, FL
– Rochester City Schools District, NY
– Fayette County Public Schools, KY
– Knox County Schools, TN
Smarter School Spending• The 4 initial districts provided the foundational knowledge for
Smarter School Spending.
• The result of the initial research and work was the development of tools, resources, and a practical step-by-step process that helps districts make smarter budget decisions.
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Project Development/Status
Best Practices in School Budgeting developed by GFOA in conjunction with the Smarter School Spending website with input of several districts and other experts.
Smarter School Spending developed in partnership with four districts working closely with consultants on their budget process (http://smarterschoolspending.org/)
After development, the Best Practices were piloted by several districts, including 3 of the districts from SSS development.
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Project Development/Status
Award for Best Practices in School Budgeting is a new GFOA budget award based on the Best Practices in School Budgeting
Alliance for Excellence in School Budgeting is an early adopter group of 35 districts formed by GFOA to aide in implementing the new Best Practices
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Current Budget Process
“Traditional” Budget Model
• Limited resources drive spending plan
• More reactionary than pro-active
• Recent hard times have limited ability to effectively
plan multi-year strategies
Budget process needs to be better aligned with
student achievement
• Attempts have been made
• May not be sustainable
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Proposed New Process
Best Practices in School Budgeting and Smarter School Spending
• Pro-active approach
• Budget driven by district’s strategic plan and focusing on student achievement rather than limited resources
• Credibility
• Continuous improvement principles
• Academic Return on Investment (A-ROI)
• Strategic Finance Plan
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Best Practices in School Budgeting
Focus on 5 major areas:1. Plan and Prepare
2. Set Instructional Priorities
3. Pay for Priorities
4. Implement Plan
5. Ensure Sustainability
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What the Best Practices are Not
Not meant to as an outright replacement
of your existing budget process
Framework to integrate current efforts to
help move the bar forward
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Best Practices in School Budgeting
The Best Practices in School Budgeting serve as the basis for this training
The Best Practices are a significant time and resource investment
The process isn’t a linear path – focus on areas of most immediate benefit to gain quick wins
Everyone has likely completed some steps of the process - and all will be at different stages
This process will help to frame and move forward from wherever your district may be
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“Roadmap”
Levels of Implementation – the ‘Roadmap’
Introductory District Diagnostic Tool
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1. Plan and Prepare
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1. Plan and Prepare
A. Develop Principles and Policies to Guide
the Budget Process
B. Establish a Partnership between the
Finance and Instructional Leaders
C. Analyze Current Levels of Student
Learning
D. Identify Communications Strategy
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1A. Develop Principles
and Policies to Guide the
Budget Process
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Develop Principles and Policies to Guide the
Budget Process
Principles• Goals for Student Achievement Should Drive the
Budget Process
• Decisions Should be Data Driven
• Base Resource Decisions on the Total Value Created for Students
• Critically Re-Examine Historical Patterns of Spending
• Ensure Equality of Opportunity for Students
• Take a Long Term Perspective
• Be Transparent
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Develop Principles and Policies to Guide the
Budget Process (continued)
Policies• General Fund Reserve
• Definition of a Balanced Budget
• Financial Emergency Policy - School
• Long Term Forecasting
• Asset Maintenance & Replacement
• Budgeting and Management of Categorical Funds
• Budgeting for Staff Compensation
• Program Review and Sunset/Alternative Service Delivery
• Year End Savings
• Funding New Programs
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1B. Establish a Partnership
between the Finance and
Instructional Leaders
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Establish a Partnership between the Finance and
Instructional Leaders
Governance and Ownership over the
Budget Process
• Maintain a single owner of the process
• Develop a governance structure to help the
process owner
• Use existing committee structures, if possible
• Define decisions rights and accountabilities
• Show how the budget process will make the
process more effective
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Establish a Partnership between the Finance and
Instructional Leaders (continued)
Establish Criteria and Measures for Success of the Budget Process
• Time – timeliness of process
• Cost – time and effort well spent?
• Quality – did the process fulfill its intended purpose:
oFinancial –sustainable financial decisions
oEngagement – stakeholders engaged/participate
oDecisions – ultimately, were good decisions made?
• Bottom Line: Does it move the bar for students?
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Collaboration
Collaboration between the Instructional and
Financial leadership of a district is key to the Best
Practices in School Budgeting
Aligning the district’s scarce resources to programs
that have the greatest impact cannot be effectively
or efficiently done with departments working in
silos…
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1C. Analyze Current
Levels of Student
Learning
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Analyze Current Levels of Student Learning
Collecting Performance Data• Develop a well-rounded perspective on student
performance
• Ensure data is: o Relevant
o Consistent
o Can be disaggregated
Measuring Student Performance • Comparison against a standard of proficiency
• Relative improvement
• Changes over multiple years
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Multi-Year Comparisons and Data
Use multi-year comparisons for proficiency Make sure data can be disaggregated to drill down on
specific sub-groups
Incorporate levels of proficiency as opposed to just “Pass” or “Fail”
Data, Data, DataFoster a climate and culture of trust for effective use
of data – be transparent about how data will be used to help promote this
Gather data using the guidelines of relevancy, consistency and can be disaggregated
Focus on data needs going forward - not wasting too much energy on pulling historical data
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1D. Identify
Communications Strategy
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Identify Communications Strategy
Communication Strategy Components:
• Process Overview
• Stakeholder Engagement
• Explanation of decisions
Implement Communication Strategy
• Identify the messengers
• Identify target audience and tailor messages
• Select communication channels
• Gather feedback and adjust
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How can I apply this to my district?
First Step
• Develop an Elevator Speech
Already there?
• Identify target audiences and
tailor messages accordingly
• Use several communication channels
Ready for the next step?
• Develop methods to engage and encourage participation of a large cross-section of stakeholders
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2. Set Instructional
Priorities
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2. Set Instructional Priorities
A. Develop Goals
B. Identify Root Cause of Gap between
Goal and Current State
C. Research and Develop Potential
Instructional Priorities
D. Evaluate Choices between Instructional
Priorities
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2A. Develop Goals
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Develop Goals
Format for Goals – SMARTER Framework:
• Specific - precise outcome or result
• Measureable - verifiable, ideally quantifiable
• Achievable - grounded in reality
• Relevant - focused on student achievement
• Time-bound - short and long-term objectives
• Exciting - reach for ambitious improvement
• Resourced - finances aligned with goals
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Develop Goals (continued)
Defining Goals for Academic Achievement
and Distributing Goals to Schools
• Assess the District’s strategic environment
• Set SMARTER goals for multi-year district-
wide improvement
• Understand baseline performance at the
school level
• Set school site goals
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Set Goals with Manageable
Expectations
Start with goals that include specific
outcomes
Aim for outcomes that are of a significant
nature – but manageable
Establish what data will show whether
progress is being met on goal
Goals may be set by senior leadership
with Board input
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2B. Identify Root Cause of
Gap between Goal and
Current State
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Identify Root Cause of Gap between Goal and
Current State
Rationale for Root Cause Analysis
• Move beyond addressing symptom level
solutions
• Find underlying true cause of issue
• Results may be surprising
• Process should involve different perspectives
– not only to assist analysis - but also develop
a broad base of support to implement
solutions
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Potential Root Causes of Underperformance
Root cause analysis can start from scratch –but may be helpful to examine ‘likely suspect’ categories, such as:
• Instructional guidance
• Professional capacity
• School learning climate
• Parent-community ties
• School leadership and management
• Physical plant
• Measurement systems
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Example: 5 WhysPROBLEM: Lower-than-expected performance on a reading program
1. Why? Teachers weren’t using appropriate instructional strategies.
2. Why? Teachers did not receive appropriate professional development.
3. Why? Insufficient pupil-free days to complete all needed training.
4. Why? The days weren’t budgeted.
5. Why? The budget didn’t identify the full costs of implementing the instructional strategy.
Solution: We need a Plan of Action that shows all the resources necessary to implement the strategy.
3. Why? The teachers received insufficient coaching after the training they did receive.
4. Why? Principal diverted coaches to administrative tasks.
5. Why? Principals are tasked with administrative duties for which they are unsuited, so they require extra help.
Solution: Redistribute responsibilities to other positions, freeing up principal time for instructional leadership.
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Example: Cause-and-Effect
Diagrams Start with problem and then identify potential causes and sub-causes
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2C. Research and Develop
Potential Instructional
Priorities
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Research & Develop Potential
Instructional Priorities
Research on Proven Effective Practices:
Data Collection and Analysis
Adopt effective instructional and
curriculum programs
Struggling kids get additional instruction
time
Articulate Instructional Priorities
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2D. Evaluate Choices
between Instructional
Priorities
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Evaluate Choices between Instructional Priorities
Identify the Options under Consideration
• Research into leading practices and
development of guiding practices
• Analyzing the environment, goal setting and
root cause analysis
• Stakeholder input
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Evaluate Choices between Instructional Priorities
Describe Options Available to Evaluate
Effectively
• Reduce the number of options
• Make consequences of choices concrete
• Categorize
• Structure the order of options to ease into
decision making
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Evaluate Choices between Instructional Priorities
Making the
Consequences of
Choices Concrete
• Potential impact on
student learning
• Long-term affordability
• Feasibility of implementation
• Level of stakeholder support
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Evaluate Choices between Instructional Priorities
Public Engagement in the Evaluation
Process
• Public pressure for practices that are less
effective than alternatives
• Pressures caused by changing demographics
• Pressures for equity
• Pressures for job preservation
• Pressures for lower taxes
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Equality vs Equity
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How can I apply this to my district?
First Steps
• Identify top instructional priorities with senior leadership
Already there?
• Expand circle of prioritization to include other staff in district
Ready for the next step?
• Bring prioritization process to public for their input
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3. Pay for Priorities
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3. Pay for Priorities
A. Apply Cost Analysis to the Budget
Process
B. Evaluate & Prioritize Use of Resources to
Enact the Instructional Priorities
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3A. Apply Cost Analysis
to the Budget
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Apply Cost Analysis to the Budget
Staffing Analysis
• Analyze staffing by programmatic elements,
based on school site
Cost of Service Analysis
• Fully Loaded Cost of Compensation
• Per Unit Costs
• Cost Effectiveness Measurements
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Staffing Analysis
Analyze staff by school site
Also group staff by major functions or programs they support, examples include:• Teachers of core subjects
• Specialty teachers
• Teachers for English Language Learner (ELL) students
• Teachers for special education
• Instructional facilitators/coaches
• Tutors for struggling students, for extended day programming, and for summer school
• Pupil support staff, including guidance counselors, nurses, social workers, etc.
• Other support and administrative personnel, such as principals, school office staff, central administration, operations and maintenance, transportation, food service, etc.
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Example
Academic Return On Investment (A-ROI)
• Basic formula:
S51
A-ROI = ((Learning increase) x (Number of students helped))
Dollars Spent
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3B. Evaluate & Prioritize
Use of Resources to Enact
the Instructional Priorities
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Evaluate & Prioritize Expenditures to Enact the
Instructional Priorities
Preparing to Evaluate and Prioritize Expenditures:
• Complete inventory of programmatic elements
• Apply cost-effectiveness measurements
Finding Resources to Pay for the Instructional Priorities:
• Revenues – increases unlikely, but examine structure
• Sun set programs
• Find efficiencies
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Evaluate & Prioritize Expenditures to Enact the
Instructional Priorities
Weighing Trade-Offs• Do the benefits of funding the Priorities outweigh
the costs of funding shifts?
• Use a structured approach to determine -centered on transparency and data
Overcoming Constraints on Change:• Categorical funding limitations
• Legal mandates
• Organizational structure
• Contractual or practical limitations on personnel moves
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4. Implement Plan
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4. Implement Plan
A. Adopt Strategic Financial Plan
B. Develop a Plan of Action
C. Allocate Resources to Individual School
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D. Develop Budget Presentation
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4A. Adopt Strategic
Financial Plan
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Adopt Strategic Financial Plan
The following elements should be included in the Strategic Financial Plan, at minimum:
• Reference to District’s Strategic Plan
• Goals for the District
• Description of the Instructional Priorities
• Evaluation criteria for student outcomes
• Funding of Instructional Priorities
• Long-term forecasts
• Analysis of scalability to impact
• Review trigger
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4B. Develop a Plan of
Action
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Develop a Plan of Action
The following elements should be included in the Plan of Action:
• Instructional Priorities
• How the Priorities will be funded
• Actions intended to implement Priorities
• Actions intended to fund Priorities
• Sponsorship structure
• Sources of evidence that action is occurring
• Guidance on critical resourcing assumptions
• Process for review and adjustment
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4C. Allocate Resources to
Individual School Sites
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Allocate Resources to Individual School Sites
Districts, particularly those with multiple
schools sites, need to have a clear and
transparent method for allocating resources
to each school site.
GFOA does not advocate a specific method,
but the following slides offer guidelines for
the two main methodologies, including:
• Staffing Ratio allocations
• Weighted Student Funding methods
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Allocate Resources to Individual School Sites
Consider the following for staffing ratio allocations:
• Use current as opposed to historic enrollment
• Any ratio should be tied back to district’s priorities
• Resist ‘ rounding up’ – flexible staffing instead
• Ratios should be widely available and understandable
• Process for principals to shift resources – if justified
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Allocate Resources to Individual School Sites
Consider the following for weighted student funding methods:
• Use current as opposed to historic enrollment
• Weighted categories and weights should be clear
• Categories and weights should be tied to district priorities
• Support principals on making better budget decisions
• Differentiate levels of budget authority given to principals based on performance
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Allocate Resources to Individual School Sites
Actual Dollars Allocated
• Allocate to programmatic elements – as
opposed to object/account
• Show full cost of personnel compensation
• Consider actual vs average cost in budget
• Consolidate all funding in budget
• Allocate majority of funds to school sites
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4D. Develop Budget
Presentation
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Develop Budget Presentation
Fundamental Organization of the Budget:
• The Challenges
• Goals – remember SMARTER framework
• Strategies and programs
• Financial Plan
• Risks to long-range financial sustainability
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Develop Budget Presentation
Financial Plan – further points to consider:
• Revenues
• Expenditures
• Reserves
• Debt and capital
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Develop Budget Presentation
Long-Range Financial Sustainability –
include the following:
• Long-range enrollment projections
• Long-range financial projections
• Risk analysis
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Develop Budget Presentation
Special Issues/Considerations for Budget
Presentation:
• Include all funds
• Demonstrate transparency in spending
• Use true program accounting judiciously
• Provide context
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Develop Budget Presentation
Budget presentation must be clear and
transparent, focusing on:
• Challenges
• Goals
• Strategies
• Financial Plan
Make sure needs of user are basis for
design
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How can I apply this to my district?
First Steps
• Clear and concise presentation centered on how
goals and strategies will address the challenges
Already there?
• Outline risks to financial sustainability
• Ensure all funds included in budget presentation
Ready for the next step?
• Show budget by programmatic element
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5. Ensure Sustainability
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5. Ensure Sustainability
A. Put the Strategies into Practices and
Evaluate Results
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Put the Strategies into Practice and
Evaluate Results
Monitor Strategy Implementation• Assign responsibility for implementation
• Develop timeline and milestones
• Develop progress reporting process
Evaluate Interim Results throughout the Year• Interim data analysis can help to identify
problems with strategy earlier
• Use experiences of both results and implementation of project to inform next year’s process
• Report on performance and implementation
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Next Steps
Join the GFOA Budget Alliance
• Alliance 2.0 will kick off in late October/early
November – if you know of anyone who is
interested please have them apply -
http://www.gfoa.org/application-alliance-
excellence-school-budgeting - or contact
Matt Bubness, GFOA Sr. Manager.
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Questions?
Comments?
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Thank You!
Carol MacLeod
Chief Financial Officer
Lake County [email protected]
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Matt Bubness
Senior Manager
GFOA
312-578-2267
773-430-1802 (cell)