What is Budgeting in a School?


“What is budgeting in a school?” you may ask. You need to know how money is being budgeted. School budgets are not complicated once you know the basics.

Budgeting in a school is a delicate process these days. More and more schools are being asked to do more with less. There are quite a few people as well as taxpayers that don’t really understand just what a school budget is, or how it is structured.

This article will attempt to answer questions on what a school’s budget consists of and how it is structured. You will see how schools use different school management systems for budgeting purposes. If you are a school owner you can use this Excel template for your school management.

The Structure of a School Budget Covers Many Areas and Has Several Parts

Budgeting is the process of developing a spending plan on paper before the month or year even begins. Every department within the school has their own budget. When all of the department budgets are combined they form the “school budget”. Schools must develop budgets annually. Each budget contains statements of the year’s beginning and ending cash estimates. There are four main parts to a school budget. The four parts are:

  1. Receipts and revenues in tentative form
  2. Disbursements and expected expenditures
  3. A beginning of year summary
  4. An end of year summary

Each year school boards hold budget hearings where the budget is explained and the public may ask questions. Later the budget is voted on and accepted or rejected. Once accepted and adopted, departments further separate the budget into funds. Each fund is a separate entity with its own assets, liabilities, and balances. Schools have many different fund accounts.

Budgets are Divided Into Separate Fund Accounts

One of the separate fund accounts in the school is educational. The educational fund is the largest because it includes not only educational materials but support staff salaries. The support staff is people other than salaried teachers in the school. Other separate funds are bond & interest, transportation, retirement & social security, fire prevention, and safety, working cash, and site & construction/capital improvements. Lastly, there are operations & maintenance which include fuel, water, electricity, and telephone. Many people simply are not aware of how many different fund accounts there are within the school budget.

Schools know what training and activities they can schedule throughout the year based on their budget. Sometimes unexpected expenditures come up and they have to schedule or change events based on budgets or fund additional revenue or transfer to cover the cost. Many states have requirements that school districts create their budgets to anticipate what they will need for the next five years. The information produced enables districts to help justify infrastructure needs and demonstrate to the public that serious, thoughtful consideration is given to the health and safety needs of the students, staff, and the community.

Budgeting is a necessary aspect of making sure that money is available to carry out ongoing operations and future needs. Developing a spending plan on paper before the month or year even begins is called budgeting.

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