GFOA has developed a series of Best Practices in School Budgeting, which clearly outline steps to developing a budget that best aligns resources with student achievement goals. This document summarizes the key themes from those Best Practices which are available at www.gfoa.org.1
The budgeting process presented in these Best Practices is focused on optimizing student achievement within available resources. It encompasses a complete cycle for long-term financial planning and budgeting, including planning and preparing to undertake the budget process, developing a budget, evaluating how the budget process worked, and adjusting accordingly. Within this cycle, the district’s instructional priorities provide a guide for decision-making.
GFOA recommends that all districts go through the following steps as part of their planning and budgeting process
Step 1. Plan and Prepare. The planning and budgeting process begins with mobilizing key stakeholders, gathering information on academic performance and cost structure, and establishing principles and policies to guide the budget process.
A. Establish a partnership between the finance and instructional leaders. A collaborative process increases the likelihood that the decisions made will be supported after the budget process is over.
B. Develop principles and policies to guide the budget process. Budget principles and policies formalize standards and fundamental values that should govern the budgeting process.
C. Analyze current levels of student learning. The current state of academic performance must be assessed to determine what course of action to take.
D. Identify communications strategy. The budget process should include a plan to inform participants, stakeholders, and the general public about how the budget process works, why each decision was made and how to provide input in the process.
Step 2. Set Instructional Priorities. The budget needs to be rooted in the priorities of the district. Intentionally created instructional priorities provide a strong basis for developing a district’s budget and strategic financial plan, as well as presenting a budget document.
A. Develop goals. Goals should be thoughtfully developed and structured to be specific, measurable, and reasonable in order to provide a strong foundation for the budget process.
B. Identify root cause of gap between goal and current state. By finding root causes of problems, a district can identify the most effective solutions to achieving its goals.
C. Research & develop potential instructional priorities. The district’s instructional priorities should be informed by practices proven by research and also be limited in number to focus on items critical to optimizing performance.
D. Evaluate choices amongst instructional priorities. A district needs to weigh its different options for achieving its goals against one another in order to focus on those with the greatest potential for student achievement impact.
Step 3. Pay for Priorities.Current resources and expenditures must be thoroughly analyzed in order to find capacity to pay for top instructional priorities.
A. Apply cost analysis to the budget process. A cost analysis and staffing analysis are essential to identifying how the district might allocate its limited resources.
B. Evaluate & prioritize use of resources to enact the instructional priorities. Instructional priorities need to be thoroughly quantified as a first step to determining how much money is needed to implement the priorities and where that money will come from. Trade-offs need to be weighed to examine whether the costs, financial or otherwise, of implementing an instructional priority are viable.
Step 4. Implement Plan. The "strategic financial plan" is the long-term road map for implementing the district’s instructional priorities. A "plan of action" describes how the strategic financial plan will be translated into coherent actionable steps.
A. Develop a strategic financial plan. A strategic financial plan provides a three to five year perspective on how the district will pursue its instructional priorities and how success will be determined.
B. Develop a plan of action. Roles and responsibilities for implementing the strategic financial plan should be made clear for greater accountability.
C. Allocate resources to individual school sites. Resources have the most direct impact at school sites and should be allocated transparently and consistent with the district’s overall strategy.
D. Develop a budget presentation. A budget document needs to be well organized and also clearly lay out the challenges the district is facing and how the district’s strategies and financial plan will address these challenges.
Step 5. Ensure Sustainability. The planning and budgeting process should be one that can be replicated in the future in order to ensure the district remains focused and plans accordingly for reaching its student achievement goals.
A. Put the strategies into practice and evaluate results. To ensure timeliness and accountability, the district should establish a system to implement the plan and monitor its progress while making necessary adjustments to stay on track.
1 Note that titles of the practices described under each step in the recommendation are clickable links to more detailed guidance.