Financial Management

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Financial Management Accountability- The
Boards Role -
BCSTA Leadership Academy December
2005 Presenter Sterling Olson
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Introduction

• What is a budget?
• A Financial Plan to help you achieve your goals
  and objectives
• Aligns financial resources with your vision,
  mission and values
• Provides a basis to monitor your actual versus
  planned expenditures
• Helps communicate how you are utilizing your
  financial resources

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Outline

• Roles and Responsibilities
• Provincial Funding System
• School District Revenue Expenditures
• Budget Process Accountability Cycle
• Trends Challenges

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Roles and Responsibilities

• Provincial Government
• (MOE Core Business)
• Provide funding to the 60 school districts
• Improve literacy
• Establish governance structures
• Set educational standards
• Monitor student performance and report results to
  the public

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Ministry Goals

• Make B.C. the best educated, most literate
  jurisdiction on the continent
• Improved student achievement
• A high quality performance-oriented education
  system
• Key Strategic Issues
• Literacy Whole Family
• from preschoolers to grandparents
• Student Health and Physical Activity
• Healthy school plan
• Eliminate junk food over the next four years
• Free serving of BC grown fruits or vegetables to
  all students by 2010
• Making schools the centre of the community
• Including review of underused schools for
  daycare, senior or parent centres

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Roles and Responsibilities

• School Boards
• Govern schools in a fiscally responsible and cost
  effective manner
• Provide education programs that reflect the
  aspirations of the local community
• Manage the districts operating budget and
  capital plan
• Approve local courses
• Adjudicate complaints from parents and students
• Administer public school legislation and
  regulations
• Jointly accountable to the Minister and the
  districts constituents

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Roles and Responsibilities

• Performance of students (Accountability
  Contracts)
• School Planning Councils
• Ensure that a school planning council is in place
  in each school
• Maintains policies and procedures to support
  school planning councils
• Communicates district timelines and the processes
  for the development, receipt and approval of
  school plans to school communities, parent
  advisory councils and school planning councils
• Provides information about the allocation of
  resources to the school
• Consults with school planning councils about
• Allocation of staff and resources in the school
• Matters contained in the district accountability
  contract relating to the school, and
• Education services and programs in the school
• Maintains processes to ensure school planning
  councils consult with the entire school community
• Approves, approves with modifications, or rejects
  school plans

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Provincial Funding

• The Provincial Cabinet and Treasury Board
  establish budget targets for individual
  Ministries
• Ministry Budget covers all MOE responsibilities
• Part of their budget is for provincial operating
  grants to public schools

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Allocation of Provincial Operating Funding

• The funding system provides for
• Student Allocation of 5,806 per FTE student
• Allocation of 250 per homeschooler
• Enrolment Decline Grant
• Unique student needs of ESL (1,100), aboriginal
  education (950), special education Level 1
  (32,000), Level 2 (16,000), Level 3 (8,000),
  and adult education
• Teacher salary differential between districts
• Unique geographic factors of climate, dispersion,
  remoteness, school district size, small
  communities
• Transportation and Housing allocation
• GAAP Funding

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School Board Variations

• School-age enrolment ranges from 271 to 61,870
  fte
• Funding varies from 4.7 to 419 million
• Average teacher salaries vary from 58,035 and
  66,495
• Dispersion, remoteness, climate and size of
  schools vary
• Enrollment changes 2004/05 to 2005/06
• SD 36 Surrey 699 1.14
• SD 93 Conseil Scolarie 301 9.26
• SD 61 Victoria (413) (4.81)
• SD 85 Vancouver Island North (41) (8.47)
• Total (5,706) (1.01)

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Operating, Special Purpose Capital Funds

• School Districts manage financial resources in
  three funds
• OPERATING FUND
• the main operating expenditures of a school
  district are recorded here.
• SPECIAL PURPOSE FUNDS
• report the expenditures for funding provided for
  a specific purpose and as such spending is
  restricted.
• CAPITAL FUND
• holds the capital assets of the district of land,
  buildings, buses and vehicles. Five year capital
  plan budgets are approved by Boards

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Sources of Revenue for School Boards

• The majority of school district grants come from
  provincial grants through the funding allocation
  system.
• In addition, grants are provided for pay equity,
  provincial resource programs, annual facilities,
  Community Link etc.
• School districts have small amounts of local
  revenues from rental of facilities, interest
  revenue on short-term deposits, international
  students and continuing education.

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School District Sources of RevenueA Provincial
Picture

• Provincial Grants 95.1
• Miscellaneous Revenue 4.2
• Operating Surplus 1.7
• Referendum 0

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School District Operating Spending

• School Districts allocate their spending between
  4 key functional areas
• Instruction

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School District Operating Spending

• School Districts allocate their spending between
  4 key functional areas
• District Administration

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School District Operating Spending

• School Districts allocate their spending between
  4 key functional areas
• Operating and Maintaining buildings

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School District Operating Spending

• School Districts allocate their spending between
  4 key functional areas
• Transporting and Housing Students

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School District Operating SpendingA Provincial
Picture

• Instruction 83.0
• Operations Maintenance 11.9
• District Administration 3.0
• Transportation 2.1

Salaries 71.7 Employee Benefits 15.6
Supplies Services 12.7
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Budget Process and Accountability Cycle
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School District Accountability Contracts

• The purposes of Accountability Contracts are
• to focus district attention and resources on
  improving student achievement.
• to detail the specific goals that school boards
  have set as they work to enhance student
  achievement and to describe the steps they are
  taking to achieve those goals and
• to communicate these efforts to a variety of
  audiences
• They link and reflect annual school plans.
• Incorporate recommendations of the
  District Reviews
• Outline goals, objectives, performance data,
  strategies and structures.

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SD 91 Guiding Principles

• Addresses board goals
• Complies with school act, collective agreements,
  etc.
• Supports school plans and school planning
  councils
• Ensures resources support accountability
  contracts
• Plan/estimate conservatively
• Sustainable for three years
• Stays within existing resources
• Equitable
• Understandable
• Predictable
• Encourages efficiencies
• Decision neutral

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Preparation of the Budget

• Project the costs of providing existing services
  into the next year such as salary and benefits,
  utilities, etc.
• Determine the factors that will change such as
  student enrolment, inflation, contract changes,
  one time items
• Project revenues, project any surplus or deficit
  from the previous year and determine net budget
  position (shortfall or surplus)
• Identify options and strategies to address net
  budget position
• Review the guiding principles and priorities from
  the Board
• Finalize decisions

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Budget Process- A question of Balance

• School Districts need to establish their own
  process for preparation, consultation and
  approval of their operating budgets.
  Communication throughout the budget process is
  vital for the understanding of the decisions and
  effective implementation
• When establishing Budget timelines, Boards need
  to take into account staffing deadlines and
  implementation processes

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Consultation and Communication

• Begin with the end in mind
• Develop strategies to engage the community in the
  budget process
• Establish consultative committees
• Establish a communications plan
• Set public and staff information and consultation
  meetings

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Trends/Challenges

• Aging population (increased health costs)
• Declining enrolment
• Increasing proportion of Aboriginal students
• Increasing costs
• Targeting of Funds
• Labour Relations (Ready recommendations)

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• Thank You!
• Questions?