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Revised (Dec 18 2009)
Operating budget-setting
School district finance is complex, but the basics are simple. The provincial cabinet and treasury board establish budgets for individual ministries based on a funding allocation system and these are adopted by the provincial legislature. The Ministry of Education provides 95 per cent of school district funding.
The budget-setting process may have begun before you were even elected to the board.
There are three types of funds managed by boards of education:
- Operating: This fund reports assets, liabilities, revenues and expenses for general operations. Expenses include salaries and benefits, classroom supplies, cleaning, heat, light, administration and student transportation for the day-to-day operations of the district.
- Capital plan: This fund reports the assets, liabilities, revenues and expenses for capital assets (land, buildings, buses and vehicles). The assets are funded through debt financing similar to a mortgage. Capital assets are amortized or written off over the life of the asset.
- Special purpose funds: These funds report assets, liabilities, revenues and expenses for specific restricted expenditures such as distance education, capital projects and provincial resource programs. Other funds are those restricted by external bodies and funds collected and used at the school level (school-generated non-public funds).
Each fund’s budget has two sides, expenditure and revenue. Expenditure is how much will be spent and on what. Revenue is where the money will come from. Although the majority of public education funding is allocated by the provincial government, boards do have the ability to generate revenue from other sources.
Boards can raise additional revenue through a variety of means. For instance, a board may create an independent board business, establish a charitable foundation or sell excess capacity (i.e., rent out school facilities after hours). School districts also generate local revenue from the rental of facilities, interest revenue on short-term deposits, international students and continuing education.
Each year, boards must prepare an operating budget, consult with the community on budget decisions and approve and submit a balanced operating budget. Boards are not permitted to operate on deficit budgets.
The fiscal year for boards runs from July 1 to June 30. Budget preparation for the coming school year usually begins in late fall and continues through to the following June. As the year progresses, the board monitors spending and makes adjustments as needed.
When preparing the budget, school district staff determine:
- the projected cost of providing existing services into the next year (salary, benefits, utilities, etc.)
- factors that will change such as student enrollment, inflation, contract negotiations
- financial implications of goals set out in the achievement contract
- legislative requirements, and
- the projected revenue, surplus or deficit from the previous year and the net budget position (shortfall or surplus)
- government taxation directives (GHG emission tax; MSP increases, etc.)
- school calendar.
The School Act outlines dates various decisions must be made and mandates the budget be prepared in a form specified by the ministry.
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Liaison trustee
