Financial Management & Accountability- The Board’s Role -

BCSTA Leadership Academy December 2005

Presenter: Sterling Olson

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

Outline

Roles and Responsibilities

Provincial Funding System

School District Revenue & Expenditures

Budget Process & Accountability Cycle

Trends & Challenges

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

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:

1. Literacy – Whole Family from preschoolers to grandparents

2. 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 20103. Making schools the centre of the community

Including review of underused schools for daycare, senior or parent centres

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 district’s 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 district’s constituents

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

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

Provincial Funding

School YearOperating

Grants

($ Billion)

Lift from Previous

Year

2004/05 $3.877

2005/06 $4.027 $150 million

2006/07 $4.047 $20 million

2007/08 $4.067 $20 million

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

Allocation of Provincial Operating Funding

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%)

School Board Variations

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

Operating, Special Purpose & Capital Funds

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.

Sources of Revenue for School Boards

Provincial Grants 95.1%

Miscellaneous Revenue 4.2%

Operating Surplus 1.7%

Referendum 0%

School District Sources of Revenue:A Provincial Picture

School Districts allocate their spending between 4 key functional areas:

Instruction

School District Operating Spending

School Districts allocate their spending between 4 key functional areas:

District Administration

School District Operating Spending

School Districts allocate their spending between 4 key functional areas:

Operating and Maintaining buildings

School District Operating Spending

School Districts allocate their spending between 4 key functional areas:

Transporting and Housing Students

School District Operating Spending

Instruction 83.0%

Operations & Maintenance 11.9%

District Administration 3.0%

Transportation 2.1%

School District Operating Spending:A Provincial Picture

Salaries 71.7%

Employee Benefits 15.6%

Supplies & Services 12.7%

Budget Process and Accountability Cycle

School Planning & Goal Setting(Involvement of School Community)

School Planning Councils

Accountability Agreement

Budget Goals & Guiding Principlesof Board of School Trustees

District Budget Preparation,Consultation and Approval

Allocation of Budget toPrograms and Schools

ContinuousProcess

ContinuousProcess

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.

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

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

Preparation of the Budget

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

Budget Process- A question of Balance

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

Consultation and Communication

Trends/Challenges

Aging population (increased health costs)

Declining enrolment

Increasing proportion of Aboriginal students

Increasing costs

Targeting of Funds

Labour Relations (Ready recommendations)

Thank You!

Questions?