Outline of a Budget Presentation
The Challenges Faced by the District (The Budget Message)
(Note to user: This is how GFOA suggests formatting what has traditionally been referred to as the “budget message.” The section could be titled “The Challenges Faced by the District” or something similar. Alternatively, a “Budget Message” but have a sub-section on “Challenges.”)
- Describe the challenges faced by the District
- Challenges could include, but are not limited to student under-performance, funding declines, changes in demographic trends, changes to the legal environment, workforce challenges, important capital asset acquisition or maintenance needs.
- Present data to put the challenges in context
- Historical trend analysis of the district’s own data.
- Use graphs to illustrate
- Benchmark analysis against other districts.
- Use tables to illustrate
- Make the information accessible to the reader
- Use anecdotes, as appropriate, that help to personify the challenge and add a human element to the story.
- Use presentation techniques that translate data to a personal scale (e.g., cost per student).
Responses to Challenges Faced by District
(Note: This section describes the district’s goals and could be written as a continuation of the prior section. Both sections could be sub-headers under a larger section titled “Budget Message.”)
- Present District-Wide Goals
- Specificity. The goal should be precise about the outcome or result that is desired by the district and references measureable performance objectives that relate to the goal. Student achievement outcomes should be most prominent among the district’s goals.
- Measurability. The description of the goals should include the sources of evidence (e.g., performance measures) that the district and its subunits will use to determine if the goals are being met. A limited number of measures should be presented for any goal.
- Relevance. Goals should focus on results or outcomes that matter most to students.
- Timely. The goals should identify a time period for achievement.
- Present (or at least provide access to) school site goals
(Note to user: Districts may include school site goals directly in the budget presentation or provide a link to another document where interested readers can obtain the goals. In any event, the reader should be able to access school site goals in some fashion via the budget presentation.)
Statutorily Required Documentation
- Provide any statutorily required documentation.
- Examples might include documentation of legally required steps in the budget process or descriptions of the basis of budgeting.
Instructional Priorities and Trade-Offs
- Describe and review prior year instructional priorities (i.e., those from most recent prior year, not those being budgeted for as part of this document).
(Note to user: Districts that do not have a prior year’s instructional priorities may skip this section, such as those that are using the Best Practice for the first time.)
- Short description of prior year instructional priorities.
- Name and description of each priority.
- Reference to strategic financial plan and/or annual plan of action to show connection between budget and strategic thinking undertaken by the district.
- Cost budgeted for each instructional priority for the prior year, if available.
- What was achieved versus what was expected to be achieved.
- Quantitative measures of performance should be used to help describe planned versus actual results.
- Ideally, the quantitative measures will address cost-effectiveness.
- Disposition of each instructional priority going forward
- Is it being continued in its current form and, if so, why? (e.g., expected results are being achieved, or more time is need for expected impact to fully manifest)
- Is it being continued, but in a modified fashion and, if so, how? (e.g., a successful pilot is being expanded, or the approach is being changed somewhat to get better results)
- If it is being discontinued, why?
- Describe instructional priorities the district will fund.
- Describe what each instructional priority will accomplish, relative to the district’s challenges and goals.
- The presentation should make clear why the district is undertaking each particular instructional priority and what will be different as a result.
- Describe current level of performance in the area that the instructional priority is expected to improve (e.g., if the instructional priority is expected to improve reading scores, what are reading scores now?)
- Describe expected future performance, over a multi-year period (e.g., what are reading scores expected to be one, two and three years into the future?).
- Describe expected number of students impacted
- Describe expected impact on those students’ academic achievement
- Describe milestones (i.e., dates) for achievement of results
- The presentation should describe the cause-and-effect relationships behind how the instructional priority is expected to impact student performance.
(Note to user: Important support service initiatives should also be included in this section, using the same basic presentation format described above, though performance metrics may be modified to reference a more relevant measurement than students. In other words, though a support service initiative should ultimately help students in some way, it will likely be more credible and useful to measure intermediate impacts).
- Describe the cost of the instructional priorities.
- The actual dollar cost of the instructional priority.
- The cost estimate should include estimates of important component parts of the instructional priority (e.g., teachers, instructional coaches, technology, etc.).
- The cost estimate, at a minimum, should include direct costs of the instructional priority. Important indirect costs should also be described, for example, the operating and maintenance costs of capital assets.
- Describe number of full-time equivalents (FTEs) involved with the initiative.
- The long-term implications of the costs.
- Do the costs cover a district-wide implementation or only cover an initial pilot or expanded pilot where costs might have to increase later in order to impact student achievement at scale?
- Is the cost a one-time or short-term cost (such as might be the case with a special project) or an ongoing expenditure (as might be the case with hiring new full-time staff)?
(Note to user: districts are encouraged to explore the use of innovative methods to present costs in a way that would be more meaningful to the reader, such as per student costs.)
- Describe the trade-offs made to fund the instructional priorities.
- Are there new revenues or are existing funds being repurposed? If the former, what is the source? If the latter, what activities are the district discontinuing or economizing?
Annual Financial Plan
(Note: The budget presentation should report all funds. Consider showing an organizational chart and a fund organization chart. Non-major funds may be aggregated.)
- Describe key principles that guided the budget process.
- Present a summary (i.e., one page or less) of key budget development policies.
- Limit the presentation to policies that directly impact budget development, such as those described in GFOA’s Best Practices for School Budgeting.
- Include a link to the official full-length policy documents, should the reader wish to see them.
- List the organizational units that are included in budget.
- Districts are encouraged to use this list to also show funding sources that each organizational unit draws on, if possible.
- If the list rolls up to important summary units, then that should be indicated.
- Provide access to allocation formulas.
- Provide brief summary description of the formulas’ role in the budget process.
- Provide a link to the formulas themselves. The link should provide a transparent description of the formulas (regardless of whether they are staffing ratio allocation or weighted student funding formulas).
- Discuss any major trends, assumptions, or other points of interest that are critical to a full understanding of the district’s revenue structure.
- Show the district’s total revenues for, at a minimum:
- The prior year actual
- Current year budget and/or estimated actual
- Upcoming budget year
- Present revenues from all funds and sources, and also by the district’s most important budgeted funds.
- Include all funding sources that the district can reasonably estimate in advance.
- Identify the most important specific sources and provide the reader with insight into major trends and analysis of salient points that are critical to the district’s financial capacity.
- First, discuss any major trends, assumptions, or other points of interest that are critical to a full understanding of the district’s cost structure.
- Then, provide an expenditure summary across the entire district, including all funds.
- Include all types of expenditures the district is budgeting for including current debt service and current capital expenditures.
- Include all expenditures that the district can reasonably estimate in advance.
- The presentation should show the district’s total expenditures for, at a minimum, the prior year actual, current year budget and/or estimate, and upcoming budget year.
- Next, present expenditures by organizational units.
- These should be the same organizational units that were listed under the key principles that guide the budget process (see "Describe key principles that guided the budget process," above).
- Districts often choose to budget by school site. For larger districts, especially, it may not be practical to include the budget for each site within the budget presentation. The budget presentation may include a link to the individual school site budgets.
- Show the connection between school district spending and the instructional priorities (at a minimum).
- Ideally, the budget presentation will be organized by programmatic elements, rather than just objects of expenditure. The programmatic elements within each school site will connect to the programs being implemented to achieve the instructional priority.
- In cases where it is not practical to develop programmatic elements (e.g., accounting system limitations), the district may show where the spending to achieve the instructional priorities is located by making prominent notations next to the appropriate budgetary lines.
- The notation should identify how many dollars within the budgetary line are devoted to the instructional priority.
- The total of all such notations across the budget presentation should total up to the same amount that was presented for the cost of each instructional priority in the “Instructional Priorities and Trade-Offs” section (see "Describe the cost of instructional priorities" under "Instructional Priorities and Trade-Offs" section).
- When showing personnel costs for an organizational unit, the cost should include, at a minimum, all current expenditures for fringe benefits, such as health care, pension, and other post-employment benefits.
- The guidelines described in "Expenditures" section, above, under "Then, provide an expenditure summary across the entire district, including all funds" also apply.
- Describe staffing allocations.
- At a minimum, show personnel by position, organization, and school sites
- This could be shown using a traditional organizational chart, with FTEs arranged by organizational units and school site and/or by classification.
- At a minimum, include figures on what is budgeted, current actual, and one year prior.
- The district is encouraged to show additional prior years.
- Ideally, staffing allocations will be shown by programmatic element.
- Provide additional contextual information on how resources are being used. Some of the informational elements could include those below. The district should put together a presentation that is relevant to its own circumstances.
- Student-teacher ratios, per pupil expenditures, average class size, free-and-reduced lunch students, English Language Learners, etc.
- If the district is budgeting salaries by average costs, the organizational chart should show average years of experience or other measure of teacher effectiveness at each site.
- Ideally, the presentation will break down these elements by school site.
- The information could be hyperlinked to a website at the district’s choice.
- Describe the district’s policy on reserves, including the target level of reserves for its major budgeted funds.
- Describe major anticipated changes to the reserve levels.
- Compare current reserve level to policy requirements.
Long-term financial sustainability
- Discuss the long-term sustainability of the annual financial plan, looking ahead a minimum of three years beyond the existing year. Specific elements that should be included in the budget presentation include:
- Long-range enrollment projections
- Long-range financial projections
- Risk analysis
- The district is strongly encouraged to address the risk posed by its long-term pension and OPEB obligations in this section. Even if these liabilities are fully funded, please include information about these issues.
- Debt and capital
- Describe the district’s principal and interest obligations by major category of debt, preferably through maturity.
- Describe the major purposes or use for that debt.
- Describe how current debt levels relate to relevant debt limits (e.g., as might be established by the district’s financial policies).
- Show sources and uses summary for major capital projects, preferably over a five-year period.
- Provide a reference to the district’s long-range capital improvement plan.
- Describe the capital projects currently being undertaken by the district.
- Discuss the extent to which the district’s capital projects are on budget and on schedule and the anticipated impact on the operating budget.
- Sustainability of the district’s long-term capital improvement plan
- Summarize the total long-term sustainability of the district’s capital improvement plan, considering the following:
- Affordability of current and projected debt levels.
- Ability of the current revenue streams to support planned pay-as-you go capital financing.
- Ability of the current revenue streams to support the operations and maintenance of planned capital projects.