School Budget Development Process: Challenges and Oversight

1. International Group:

2. Table Of Contents • Torrington Public Schools, Connecticut 3 • Khartoum American School, Sudan 8 • Masconomet Regional School District, Massachusetts 16 • AISJ, Saudi Arabia 21 • Summary 26

3. Superintendent of Torrington Schools: Cheryl Clozko

4. Superintendent of Torrington Schools: Cheryl Clozko; pg. 1 of 4 Please describe the process used in developing the school budget. What are the steps? When does the process begin? • The process begins in early November. All principals and directors are given (electronically) the forms, budget codes, and the % increase or decrease they can expect to work within. In the beginning of January the leadership team meets with principals separately and the school or program based budget is reviewed. • The percent of increase and the dollar equivalent over the previous year’s budget is determined and the subcommittee decides with the Superintendent of this increase will be supported or if the leadership team should go back to the chopping block with advice and recommendations from the BOE. • In the middle of March the recommended budget from the Supt. is presented to the BOE (full board) at a BOE meeting. They receive it, Then a special BOE meeting is held to accept the budget. It will then be presented to the City Council and Finance Board who tell the BOE to cut or it is accepted. This occurs on May 1st. If we are told to cut, we are back on the chopping block.

5. Superintendent of Torrington Schools: Cheryl Clozko; pg. 2 of 4 During the budget development process, what is the most difficult step(s) for administrators to deal with? • The cuts in programs and personnel. Torrington has had a 0 budget for 2 years, if they ask for 0 increase this year there will be nothing left to the school district. Students are opting out from the high school to attend other local, smaller high schools or magnet schools. Who are the others involved that have a large role in the development of the budget? • Budget Subcommittee of the BOE, mayor, city council and board of finance, families and community members. What steps does the school go through to reach final approval of the budget? • See question 1. I also meet weekly with the newspapers and other media in order to educate the general public about the budget. It is posted on the district website, Supt. Blog, and anywhere people will read about it and learn about it.

6. Superintendent of Torrington Schools: Cheryl Clozko; pg. 3 of 4 Once approved; what is the role of management in oversight of expenditures? • The business manager watches the funds very carefully and provides information and data regarding expenditures, transfers, etc. to the BOE budget subcommittee on a monthly basis. We have to watch incase the budget must be frozen. With the snow storm in Oct. we experiences several hours of overtime in snow removal, tree and shrub clean-up, etc. and fear of other storms and overtime we kept a careful eye on the budget. We had to freeze the budget in January. She makes sure funds are spent on what they were asked for. In the management of the budget: What is the most difficult or time-consuming activity? • Unexpected expenses like major illness which impact insurance since the district is self insured, cold weather increases in heating fuels, damage to a building or if a furnace breaks down, need to add another bus route, out of district tuition for students with severe special education needs, etc. Big ticket items can cause havoc with the budget and more than one can kill us. Who else is involved the oversight to a large extent and what are their specific responsibilities? • Finance/Business manager monitors the budget for EVERYTHING, presents monthly updates to budget subcommittee, transfers, deficits, etc. • Superintendent, working closely with Finance/business manager in all of the same areas mentioned above.

7. Superintendent of Torrington Schools: Cheryl Clozko; pg. 4 of 4 What portion of personal time is spent on dealing with the system budget? What advice in the area of finance and budgeting is recommended for aspiring superintendents? • There is a special certification program for 093 required to be a superintendent and that includes 2 full days of training for the superintendent and role of finances in the job. There are monthly meetings through the school through CAPSS, a professional organization for superintendents state wide. What is the problem that causes the most concern in the process of management or development of the budget? • The unknowns. Request for an increase in the overall budget. Is there anything else regarding a future school administrator's involvement in the budget process that has not been covered in this interview? • It takes a long time to prepare a budget, you must know it intimately to respond to questions from BOE and public, you must be a good sales person, and you must know the impact on the entire district when making cuts, so you must know your priorities.

8. Khartoum American School; Khartoum, SudanSuperintendent Greg Hughes

9. Khartoum American School; Khartoum, SudanSuperintendent Greg Hughes; pg. 1 of 7 Background Information • Greg Hughes is the Superintendent at Khartoum American School in Khartoum, Sudan. Greg earned his Bachelor of Education and Master of Leadership & Management in Education from Newcastle University. Greg started teaching in 1987 and began his international career in 1996. Greg has held administrative positions at The American International School of Conakry, The American School of Kinshasa, The American International School of Lusaka, and The American International School of Bamako. Please describe the process used in developing your budget. What are the steps you go through? When do you begin? • Khartoum American School (KAS) usually begins developing its budget around February or earlier for the following academic year. KAS started later this year due to the currency crisis and the implication of it in Sudan. “But basically because the budget has been set for so many years we just keep to our known expenses, we plug those things in that are non-variables and then once the non-variables are put in you work around the variables and see how much adjusting you have to do” (Hughes, personal correspondence, March 12, 2012). The KAS budget is designed inline with the KAS strategic plan. • “The problem that we have had this year is that we have put a freeze on tuition increases for next year, meaning, we now have to go backwards and work within the budget and see what that will actually mean to us” (Hughes, personal correspondence, March 12, 2012). The finance committee will go back and see if the projected budget actually fits the expected tuition revenue and if not KAS will have to make some cuts.

10. Khartoum American School; Khartoum, SudanSuperintendent Greg Hughes; pg. 2 of 7 During the budget development process, what is the most difficult step(s) for you to deal with? • Greg feels “the most difficult steps are obviously making sure that you are not forgetting anything, making sure that you have counted in inflation, making sure you have counted in every variable” (Hughes, personal correspondence, March 12, 2012). Greg also finds difficulty in trying to prioritize. “When you have two things that you want to prioritize and you want to make sure you fund them well it’s not always that easy” (Hughes, personal correspondence, March 12, 2012). • With the transient nature of international schools, continuity and sustainability of programs is key. “The budget development is a tough process but at the same time it’s a good thing, in that we are actually looking to reduce costs this year in areas like teacher housing and things like that. So, it’s a good way of reflecting on what you are presently doing and make the most out of what you’ve got” (Hughes, personal correspondence, March 12, 2012).

11. Khartoum American School; Khartoum, SudanSuperintendent Greg Hughes; pg. 3 of 7 Who are the others involved that have a large role in the development of the budget? • The business manager and the treasurer constitute the KAS finance committee. The finance committee looks through the budget to make sure that KAS really has enough financial resources to fund it. “But at the same time because the tuition drives the budget, the whole parent-composed board will be in the decision making process as to how we actually get to the level of income we need” (Hughes, personal correspondence, March 12, 2012). What steps do you go through to reach final approval of the budget that you present? • Greg will ask the business manager to present a preliminary budget. He will go through it to make sure “I am comfortable the way everything is sitting” (Hughes, personal correspondence, March 12, 2012). Greg will review the entire budget but will focus on the projects in the strategic plan and analyze variables. Then he presents the budget to the treasurer and talks through it with the finance committee. “When the treasurer is content that we have a good budget prepared, he will then present it to the board for final approval” (Hughes, personal correspondence, March 12, 2012). Once approved; what is your role in management and oversight of expenditures? • Greg basically tries to live within the limits of the budget. He feels that “once you have set your budget it is always nice not to go on adventurous things that are above and beyond what you have actually planned for. So basically it is planning for and sticking to your plan” (Hughes, personal correspondence, March 12, 2012).

12. Khartoum American School; Khartoum, SudanSuperintendent Greg Hughes; pg. 4 of 7 What advice in the area of finance and budgeting do you have for aspiring superintendents? • The advice Greg would give an aspiring superintendent is to get everyone on board at the start of the year. “In other words, know what projects you are doing well in advance and let people know that that is what is being funded well in advance” (Hughes, personal correspondence, March 12, 2012). • The school board prioritized the initiatives with the community and that is where the money is going. Greg feels that if somebody were to come up with another huge project it would be easy for him to say “sorry, this is where we are going” (Hughes, personal correspondence, March 12, 2012). • Greg thinks the secret to maintaining your budget is to give yourself a little bit of room to maneuver. “If you set it to the last cent and then you have unexpected unforeseen costs then obviously you are going to go over budget” (Hughes, personal correspondence, March 12, 2012). Greg believes most administrators pad their budget to a small extent “but at the same time make sure you tell the board exactly what you are doing and how you are doing it.

13. Khartoum American School; Khartoum, SudanSuperintendent Greg Hughes; pg. 5 of 7 In the management of the budget: What is your most difficult or time-consuming role? • Really if you can stick to your plan, you don’t have a time consuming role” (Hughes, personal correspondence, March 12, 2012). Every month the finance committee looks at the KAS budget and every month the finance committee checks that KAS is on track. In terms of managing the budget, Greg feels that it “isn’t a problem if you stick with what you plan” (Hughes, personal correspondence, March 12, 2012). What is the problem that you would least like to have occur in the process of management or development of the budget? • Greg knows the biggest problem you can ever have at international schools is a massive enrollment drop. “The minute you have an incident where half your school leave overnight and with them go half your tuitions that are unpaid and things like that” (Hughes, personal correspondence, March 12, 2012). It is the biggest nightmare for any administrator and in those situations it is also good that the school have a big contingency fund set aside. • Greg highlights the problem with not having a contingency fund, and relying on insurance, is that it helps as a short-term solution but doesn’t help in the long-term “because the school then has to reopen and you can guarantee someone’s salaries until the end of the year but you are not going to guarantee salaries for life” (Hughes, personal correspondence, March 12, 2012).

14. Khartoum American School; Khartoum, SudanSuperintendent Greg Hughes; pg. 6 of 7 Is there anything else that I should know about your involvement in the budget process that we have not covered? • “Not really, it’s a very simple process, it’s just the case of getting your numbers and knowing where you are and the not going over those things” (Hughes, personal correspondence, March 12, 2012). Greg feels the thing that is very important that people don’t get is that the budget is a spiral. “If you get more kids, you get more tuition. If you get more tuition, you get more money, the more money you have the more you can say yes to people for different things that are going on. As your tuition drops, the amount of money drops, the more you have to say no to people, the more moral drops, the more buildings and things stop and unfortunately, it goes the opposite direction” (Hughes, personal correspondence, March 12, 2012). Who else is involved the oversight to a large extent and what are their specific responsibilities? • The treasurer is the person who is mostly involved with the oversight of the budget. It is the responsibility of the treasurer to make sure the school is viable and working. “I mean he doesn’t get into the nitty gritty of how we spend every dollar but at the same time he would question me if we were going over budget in a line item or he would ask me about large payments and things like that” (Hughes, personal correspondence, March 12, 2012).

15. Khartoum American School; Khartoum, SudanSuperintendent Greg Hughes; pg. 7 of 7 What portion of your time is spent on dealing with the system budget? • Greg stated that “this time of the year it takes a lot of time to make sure the initial budget is set up well, but after that, then it is just a case of executing the budget and sticking to what we are doing and usually that only involves a small meeting once a month just to check that we are on track” (Hughes, personal correspondence, March 12, 2012). Aside from tuition, the only other thing we have access to are grants from the office of overseas schools? 99% of our budget is tuition. • Greg agrees that 99% of our budget is from tuition. 80% of our tuition goes to teacher’s salaries, teacher’s accommodations, air tickets and other costs associated with the KAS teacher compensation package. “So realistically, if you take out everything else, the parents pay the money and the teachers receive most of the money and everything that goes on around it is just a bonus” (Hughes, personal correspondence, March 12, 2012). • “If a school increases its fees too much, you alienate your locals and if you alienate your locals then you end up with a lot of people dropping out and that saturation point ,to where people start dropping out, is the one you have to try and avoid. Because obviously, there is no point in getting x number of dollars from a tuition increase and have two times x leave your school” (Hughes, personal correspondence, March 12, 2012). • Reference: Odden, A., & Picus, L. O. (2008). School finance: A policy perspective. (4th ed.). New York: McGraw-Hill.

16. Superintendent of Masconomet Regional School District, Topsfield, MA; Darrell Lockwood

17. Masconomet Regional School District serving Boxford, Middleton and Topsfield

18. Superintendent of Masconomet Regional School District, Topsfield, MA; Darrell Lockwood pg. 1 of 4 Please describe the process used in developing the school budget. What are the steps? When doe the process begin? •  The budget development process starts in summer. The school committee goes on a retreat together to discuss the goals for upcoming year and budget process. • The vision and the goals are developed each year. • The committee starts with general goals and narrows this down to specific goals. The two areas this year include: • Priority 1: Enhance academic programs by optimizing class and section offerings. • Priority 2: Enhance the learning environment by optimizing support services. During the budget development process, what is the most difficult step(s) for administrators to deal with? • The “unknown”, (Superintendent of schools, personal communication, March 8, 2012). • Right now the unknown is “Health Insurance”. Superintendent Lockwood states it is taking over the budget. The largest expenditure is health insurance for retirees. The school budgeted 10-12% and thankfully this was a high number this year. There is also a change in the health plan design this year.

19. Superintendent of Masconomet Regional School District, Topsfield, MA; Darrell Lockwood pg. 2 of 4 Who are the others involved that have a large role in the development of the budget? • School committee (Set Policies, Adopt a budget) • Chief Financial Officer of Schools • Principals of both middle and high schools What steps does the school go through to reach final approval of the budget? The steps in the budget process employ a layered approach: • The process begins by the department heads talking with their teachers • The department heads then submit their budgets to the principals of the two schools • The three towns (community) contributions from property taxes is reviewed • Chapter 70 funding from the state of Massachusetts is reviewed • Budget is presented to school committee for approval • Budget is presented to three towns, Towns approve budget

20. Superintendent of Masconomet Regional School District, Topsfield, MA; Darrell Lockwood pg. 3 of 4 In the management of the budget: What is the most difficult or time-consuming activity? • The most difficult is presenting the budget. • The most time-consuming is development of the budget. Who else is involved the oversight to a large extent and what are their specific responsibilities? • Cost Control (Purchase order system) • Accountant cuts checks, School Treasurer approves (Checks and Balances) What portion of personal time is spent on dealing with the system budget? • November through March (At school one to two nights a week) • Time spent going out to individual towns (3) to attend meetings presenting budget to finance committees, selectman, and town meetings (presenting budget to the public).

21. Superintendent of Masconomet Regional School District, Topsfield, MA; Darrell Lockwood pg. 4 of 4 What advice in the area of finance and budgeting is recommended for aspiring superintendents? • Technical side and people side of budget • Numbers equate to programs • (Always remember budgets are more than bodies and bricks) The budget is about programs and children’s education. What is the problem that causes the most concern in the process of management or development of the budget? • “If expenditure estimates exceed revenue projections, the district’s administrators must make adjustments on one or both sides of the equation” (Odden, A., & Picus, L. (2008). School finance a policy perspective. (4th ed., p. 252). New York, NY: McGraw-Hill).  Is there anything else regarding a future school administrator's involvement in the budget process that has not been covered in this interview? • A person can be very good at numbers; however, the numbers need to come alive. The numbers represent education (students). Numbers equate to programs.

22. American International School of Jeddah, Saudi Arabia: Business Manager, Barry Edwards

23. American International School of Jeddah, Saudi Arabia: Business Manager, Barry Edwards; pg. 1 of 4 Breakout local, state and federal funding shares---- • Only source is grant money with safety and security and a very meager educational piece from the state department (175,000) the rest is 100% tuition from the parents. Provide per pupil expenditure data: • It will be different in every division…but we are close to 10,600 K per pupil Calculate property wealth per capita: • There are no records of such but an estimate would be 100K per household family State local school tax or tuition rate if private: • 10,600K average Minor differences in Elementary, Middle and High

24. American International School of Jeddah, Saudi Arabia: Business Manager, Barry Edwards; pg. 2 of 4 How does AISJ fulfill the finance standard of equity and adequacy so that "a sufficient level of funding is delivered for an adequate education for every student at AISJ? • Adequacy and equity is a process is developed through a series of meetings with the principals, the CC, and department heads as to what is required of each subject area Please describe the process used in developing your budget. What are the steps you go through? When do you begin? • The process begins in September, the Business Manager seeks School approval in November and to the Board of Trustees in January. Process is a bunch of individual meetings and then larger group principal meetings and then to the final decision makers. During the budget development process, what is the most difficult step(s) for you to deal with? • The most difficult steps that are dealt with are those to make sure that the school does not miss anything and trying to become more descriptive and taking out the ambiguity by adding a lot of line items. Who are the others involved that have a large role in the development of the budget? • Principals, Department Heads, Curriculum Coordinator, Superintendent, Board of Trustees

25. American International School of Jeddah, Saudi Arabia: Business Manager, Barry Edwards; pg. 3 of 4 What steps do you go through to reach final approval of the budget that you present? • There is a review meeting with the Superintendent and the Board of trustees where the BM goes over each line item step by step. The board then has two months to make a decision on the budget. Once approved; what is your role in management and oversight of expenditures? • There are budget line items that it comes out of and every month there is a budget monitoring report with three columns: total budget, charged items against that budget and, the balance within that line item. My role in this is the operational side of the budgetary needs of the school. In the management of the budget: What is your most difficult or time-consuming role? • The preparation of the budget is the most time consuming. The budget was completely revitalized in all aspects. Who else is involved the oversight to a large extent and what are their specific responsibilities? • Oversight of the budget is between the BM and the Treasurer of the Board and they have month meetings.

26. American International School of Jeddah, Saudi Arabia: Business Manager, Barry Edwards; pg. 4 of 4 What portion of your time is spent on dealing with the system budget? • The creation of a budget took 100’s of hours and the follow-up budget monitoring is about 2 hours on a monthly basis…but monitoring happens all the time throughout the year. What advice in the area of finance and budgeting do you have for aspiring superintendents? • Depending on the starting point…first to go over the budget and once you think that it is complete have meetings again with all of the department heads and review ten consecutive days before submittal. In these meetings the goal is to look for what might have been missed. Items might not be in a proper pigeon hole…where new line items may need to be created or others that might be duplicated or so ambiguous as to be non-descript. You always need to have a ready on hand reserve of about 10% and trying to add to those…reserves. What is the problem that you would least like to have occur in the process of management or development of the budget? • Realizing that the budget is insufficient to cover the cost of operating…you cannot go to parents in the middle of the year and raise tuition based on miscalculations. Is there anything else that I should know about your involvement in the budget process that we have not covered? • The budget is not a specific job that you start and complete in a short period of time it is an ever-evolving process that will never be finished.

27. International Group Summary pg. 1 of 6 • “School finance concerns the distribution and use of money for the purpose of providing educational services and producing student achievement” (Odden & Picus, 2008, p. 1). Overall, most budgets are prepared well in advance and are based on the previous years budget and known expenditures. Budgets are all designed differently but contain similarities and you should be able to analyze a budget and see the vision/priorities of the institution/school. There should be a framework in place for the budget development process, which includes a timeline. Most budgets are assembled collaboratively and must be approved by a Board. Budgets are primarily designed to meet a strategic plan or school/department needs. Private schools set their tuition based on their budget or their tuition revenue if no increase is possible.

28. International Group Summary pg. 2 of 6 • The most difficult step in the budget development process is to establish a framework so that nothing is forgotten or left out, otherwise you will have difficulty dealing with this later. Overwhelmingly, the most difficult steps to deal with are ensuring you are not forgetting anything and planning for the “unknown”. Another difficulty is prioritizing, which would include providing guidance for realistic spending and allocating funds appropriately for meaningful growth/strong programs. • There are many people that have a role in the development of the budget. The development of a budget is a collaborative process and in an attempt to avoid dealing with the most difficult step of “not forgetting anything” many stakeholders are involved. The budget development process usually includes the business manager, treasurer/accountant, principals, department heads/pedagogical leadership, superintendent, and a Board.

29. International Group Summary pg. 3 of 6 • There are steps that you go through to reach the final approval of the budget that you present for final approval. There is a framework for budget development and it can be unique to each institution. There are usually levels of approval/review as the budget works its way up the ladder before final approval is requested from a Board and some frameworks require final approval from the community. • The role of the superintendent in the management and oversight of expenditures should be minimal if everything is accounted for and you stick to your planned budget. Once approved the biggest role, in management and oversight of expenditure, is to make sure you are living within the budget. There is a process in place to continually monitor the budget. Monitoring the budget usually consists of (monthly) reports detailing total budget, charged items against that budget and, the balance within that line item or some like formula. • The most difficult and time-consuming part is the preparation of the budget. If a “good” budget is prepared then the management of it should go smoothly. “The budget becomes an important management tool to help ensure that educational resources are focused on the priorities established at the beginning of the budget cycle” (Odden & Picus, 2008, p. 253). The preparation of the budget is the most time consuming. If you stick to your planned budget and have reliable systems of communication in place, the management of the budget is less time-consuming but you must stay on top of income vs. expenses.

30. International Group Summary pg. 4 of 6 • There are usually several people involved in the oversight of the budget and there are usually established collaborative budget management meetings. Other than the Superintendent, the treasurer and business manager are the people most involved in the oversight of the budget. The Business Manager tracks the expenses and the Treasurer reviews the expenses against the budget. • The amount of time that a superintendent spends on the budget varies on the time of year and consistency of revenue. The time spent on the system budget depends on the time of year with the preparation of the budget being the most time intensive. The monitoring of the budget process should take up little each month throughout the year unless there is a crisis of some sort.

31. International Group Summary pg. 5 of 6 • There was solid advice for aspiring superintendents given in the area of finance and budgeting. “The heart of the budget process is estimating revenues and expenditures and ensuring that the budget is in balance- that expenditures do not exceed revenues for the year” (Odden & Picus, 2008, p. 242). Aspiring Superintendents should have a strong understanding of their finance and budgetary needs. Select a good Business Manager and be willing to work productively with the Board. Have multiple systems in place (e.g. department meetings, division meetings) so you do not miss anything. Be as transparent as possible (degree will depend on situation) and include as many stakeholders as possible. Make sure you “pad”/have a reserve built into your budget in case of overspending or the “unknown” that emerges.   • There is a technical side and people side of a school budget. Numbers equate to programs. Always remember budgets are more than bodies and bricks. The budget is about programs and children’s education.

32. International Group Summary pg. 6 of 6 •  “ The basic problem in school finance consists of providing sufficient resources to schools to enable them, in turn, to provide an equitable and adequate education to each child” (Odden & Picus, 2008, p. 29). The problem that everyone would like to avoid is insufficient funds. No superintendent would want to encounter the problem of not being able to provide a quality program within the confines of their budget. Other big problems could be a massive drop in enrollment, “the unknown” not budgeted for expense, and grant or revenue decreases. • It is important to remember the human side of the budget (salaries are the biggest part/represents students) and all members of the staff have to feel they are important members of a team contributing towards success. If you have to cut, try to find areas that will not affect the educational process. The budget is not a specific job that you start and complete in a short period of time it is an ever-evolving process that will never be finished.

33. International Group