Skip Navigation
Financial Accounting for Local and State School Systems: 2009 Edition
NCES 2009-325
June 2009

Chapter 3: Budgeting — Operating Budget Responsibilities and Guidelines

The development of annual budgets is part of a continuing planning process. The advent of site based decisionmaking in some states has increased the integration of planning and budgeting at the school level; however, even if site-based decisionmaking has not been adopted, state laws generally allow considerable district autonomy in budget preparation. The organizational structure of a district, including the size and complexity of its administration and the degree of centralization, will affect the budgetary approach, the budget development process, and the final budget document. Beyond the requirements for federal and state programs, the budget preparation process and related responsibilities will be largely determined by the local school board and superintendent.

This section contains information related to the significant aspects, phases, and outputs of the school district budgeting process. Although it is not meant to establish standards or requirements, it may be useful in the development of sound budgeting procedures. Given the diversity of budgetary and financial reporting found in individual states, the process described here may be customized to conform to particular local and state requirements. The discussion in this section describes a typical site-based budgeting approach.

Roles and Responsibilities

The local school board and the superintendent should establish guidelines and a meticulous budget preparation process. To achieve this, the delegation of budget responsibilities among administrators at the district and school levels should be deliberately designed to require consensus at the highest levels of management. Because individuals may serve in a variety of roles in the budget development process, the division of duties may differ among districts. It is important, however, to clearly define the staff assignments and parameters if the budget development process is to operate efficiently. With the advent of site-based decisionmaking, individuals lacking previous budget experience need clear direction in order to provide effective input.

Budget Preparation Guidelines

Budget preparation guidelines typically are prepared by the assistant superintendent for business and finance or by an employee with similar responsibilities, such as a chief business official or a budget administrator, with direction from the school board, the superintendent, and other district and school administrators. A presentation with subsequent board approval of the budget process, guidelines, and calendar may be legally required or may be a locally imposed procedure. However, at a minimum, the guidelines should contain the following elements:

  • a budget transmittal letter from the superintendent, that provides the overall context for budget development at the school level;
  • a budgetary overview, that explains the budgeting philosophy and approach, outlines the budget development process, and refers to major assumptions and changes in the budgetary process from the previous year;
  • fiscal limitations to be observed, such as maintenance of service levels, specific percentage increases or decreases in resource allocations, and personnel hiring guidance;
  • a calendar of critical dates for budget completion, submission, and review;
  • instructions concerning expenditure items to be budgeted at the school level and the detail required for submission;
  • a copy of standard budget preparation worksheets, submission forms, and diskettes; and
  • a list of the account codes necessary for preparing the budget.

Many of these elements may be combined into the budgetary overview. The preparation guidelines may also contain the following:

  • guidelines for estimating standard school resource allocations, that are determined by the budgetary approach used by the district and the availability of resources;
  • guidelines for estimating the costs of specific expenditure categories, such as salaries and benefits, supplies, or fixed charges; and
  • instructions for submitting school budgets to the district office, including the number of copies, due dates, and personnel to contact for assistance.

Preparation of the Budget Calendar

The budget calendar provides critical dates for the preparation, submission, and review of school budgets. It is prepared during the planning process by the district budget office. A variety of simple techniques may be used to build the calendar, such as beginning with the previous year's calendar and modifying it for the current year. Problems that occurred in the prior year's budget cycle should be identified for change in the current year's calendar. Also, the current year's calendar should incorporate changes in the budget development process. If the process has been substantially altered, creating an entirely new calendar may be necessary. The following steps may be used:

  • Determine the necessary level of detail. If several calendars with varying levels of detail are used, they should be summarized in a master calendar to ensure that all activities and dates are consistent and compatible.
  • Identify all activities that must be included in the calendar and arrange them chronologically.
  • Assign completion dates to each activity. Some districts may also assign suggested or mandatory start dates for certain activities to ensure their timely completion.