School District Budget Development Research Paper

The inconsistency of information flow between the school district authorities and the school staff often results in major complexities with defining a school district budget and distributing the district resources properly and efficiently. Seeing that the school district budget is influenced heavily by the students that attend the school in question, their social status, etc. (Silverman, 2011), its calculation requires an understanding of the key economic processes within a school.

It is immaterial whether one is running a big, small, or medium size of business. However, a budget is essential for an organization to deliver a successful performance. Budgeting is the most fundamental and effective tool for managing the invested money. Nevertheless, several people think budgeting operations to be excessive and view developing a budgeting strategy as extra work. However, budgeting helps essentially in allocating and managing the organization money and other resources properly. Budgets play a crucial role in a range of organization’s processes, including not only financial transactions but also allocating the existing resources, planning partnerships with other organizations, designing new financial strategies, and helping consumers to pay off debts (Rabovsky, 2012). Thus, it alerts the owner of the organization about what is going on with the money and helps organize spending and savings, makes the leader decide in advance how the financing strategy will work within a certain context, and enables the leader to save for expected and unexpected costs. It also can provide one with an early warning of potential problems and enables one to deploy an efficient communication strategy (Moynihan, Pandey & Wright, 2012).

Therefore, to make the system work, the organization leader has to pay attention to the subject matter. It is crucial to explore the innovative ways of managing limited resources to get the maximum benefit of it.

Estimated Budget Information

The estimated budget for the years 2012-2013 shows a projection of the items discussed in detail below.

About Revenue:

1. The Assessor projects a 4 % reduction in assessments, which affects the items like Current Taxes, Delinquent Taxes, Sales Tax, and Intangible Taxes to reduce by 4% as compared to the actual figure shown in the year 2011–12.
2. It is assumed that the interest received from the investment will increase by $ 75,320 in the budgeted year.
3. The food service funding will increase by 3%, which will result in a rise in all local, state, and federal food services.
4. As new enrollment for the budgeted year is accepted, so an increase in Student Activities, Other Local, and Gate Athletics will be estimated.
5. The budgeted year expects an increment in the fund sourced from Railroads/Utilities.
6. Formula Projections are decreased by 2% as per the stated term.
7. The budgeted years 2012–2013 also anticipate an increase from the funding provided by Exceptional Pupil and Early Childhood Education. As new enrollment for the budgeted year is registered, an increase in Vocational Aid can be expected.
8. The instruction demands the fees to be enhanced by 3%, which affect an increase in Drug Awareness fee and Eisenhower ESL fees.

Thus, by adjusting all the figures to the total revenue, one will retrieve $5,072,279, which is $83,144 more than the actual total expenditure of the years 2011–2012 amount, $4,989,135.

Expenditure:

1. The cost of living increase mandated (1.5%) reflects an increase in Salaries, Substitute Teachers, Administrative Assistant, etc.
2. Teacher retirement is assumed to make 11% of the teacher’s salary, whereas the non-teacher retirement fee makes 5% of non-certified or classified employees’ salaries.
3. An increase of 7% is noticed in Health Insurance.
4. The amount of classroom supplies, textbooks, and equipment has already been reduced, and the Board would prefer these budget areas to be maintained at current levels. However, a curtailment in Library Services has been made, including supplies, books, periodicals, and equipment, keeping the number of library staff members intact to adjust the deficit of the budget.
5. For the current budget period, a travel moratorium is being considered by the administration.
6. Crude oil price is rising, resulting in a utility increase of 7% (Baumeister & Pierceman, 2011).
7. Because of the deficit, the amount of money spent on Elections and Advertising is reduced in the budgeted year.
8. The expected rise in the Fuel prices increased the amount to be spent on Gas/Diesel by 4%.

Thus, by adjusting the entire figure, one will have the Total Expenditures of $5,045,160, which is $70,748 more than the Total Actual Expenditure of the years 2011–2012 ($4,974,412).

Outcome

At present, the budgeted years 2012–2013 are clearly showing a positive balance of $27,119 as a result of adjusting the Total Revenue of $5,072,279 and a Total Expenditures of $5,045,160. So the budget policy is considered to be fair as the budget does not have a negative balance. The School Board is not comfortable with the carry-over amount for the next year, however.

The Board would like three additional positions in the high school to meet the new state requirements for foreign language, physical education, and math. However, the proposal is delayed as the fund does not permit any extra expenses. Basing on the inflow of fund the management, one may assume that the financing policy should be based on a detailed analysis of the specific needs that schools have.

As the funding does not allow the project members to purchase a new 70 passenger bus for $35,400, the latter is kept on hold for the moment. Buying a new car will require an investment of $35,400, at the same time increasing the operating cost as a result of the rise in fuel cost. Thus, based on the availability of the allocated resources, only the school management can make a correct decision in terms of the financing strategy and the allocation of resources, as well as the budgeting of the latter.

Reference List

Baumeister, C. & Pierceman, G. (2011). The role of time-varying price elasticities in accounting for volatility changes in the crude oil market. Journal of Applied Econometrics, 28(7), 1087–1109.

Moynihan, D. P., Pandey, S. K. & Wright, B. E. (2012). Setting the table: How transformational leadership fosters performance information use. Journal of Public Administration Research and Theory, 22(1), 143–164.

Rabovsky, T. M. (2012). Accountability in higher education: Exploring impacts on state budgets and institutional spending patterns. Journal of Public Administration Research and Theory, 22(4), 675–700.

Silverman, R. M. (2011). How unwavering is support for the local property tax? Voting on school district budgets in New York, 2003–2010. Journal of Education Finance, 36(3), 294–311.