Ed Management Services

Budgeting Handbook

Budget Process


The school district's budget essentially follows the format prescribed by the Commissioner of Education based upon the Uniform System of Accounts for School Districts promulgated by the Office of the State Comptroller. General fund appropriation are classified by major function codes are as follows:

  • General Support
  • Instruction
  • Pupil Transportation
  • Community Service
  • Undistributed Appropriations

These major function codes are broken down into related functional units such as supervision, teaching, instructional media, and interscholastic athletics.

Functional unit codes have expenditure descriptors called object codes, such as, instructional salaries, materials and supplies, equipment, and contractual expenditure.


The board of education establishes objectives and priorities for the operation of the district and sets that course by establishing policy. The chief school officer is responsible for planning, organizing, directing, coordinating, and reporting the budgeting process. The chief school officer must be aware of both the district's financial capacity and its external environment (public) whose approval is required in order to achieve the district's objectives. Recognizing that the district must respond to a wide variety of pressures, it is appropriate that the chief school officer communicate the district's objectives and gather a coalition of inside and outside groups to participate in the budget decision process.

Participation in the budget process by both inside and outside groups will give the process a broader prospective and will lead to a better communication and a wider support system once the proposed budget is completed and public support is required.

To reach a realistic assessment of the district's educational needs and the community's ability and willingness to finance the school program, it is important to have accurate information regarding:

  • the community's receptiveness to tax increases;
  • enrollment projection;
  • capacity and limitations of facilities;
  • staff expertise;
  • educational program objectives.

Once this data has been analyzed and the parameters governing budget development have been established, a full staff meeting should be conducted in which educational priorities, fiscal constraints and the process itself are discussed in order to obtain full staff cooperation. This should take place prior to the budget development process.

The professional staff should help by analyzing the district's operations, identifying problems and needs and then creating potential solutions. This includes determining which programs or services should be supported with increased resources, maintained at current levels, reduced or eliminated.

To effectively balance needs of the students with the resources of the community and to determine what approach should be adopted with regard to educational activities, it is suggested that the chief school officer setup a committee, including the people responsible for the educational programs and designated community representatives, to help in planning a rational distribution of identified resources among the district's programs. Potential solutions will be less effective without contributions from staff members at all levels, as well as interested community members.

Once the educational priorities have been established and the guidelines for dollar allocations determined, the chief school officer then can advise the building principals and department heads of the financial constraints to use in evaluating requests submitted by members of the staff.

When the instructional and support staff are requested to submit budget requisitions in accordance with the pre-established guidelines, the process can be facilitated and coordinated by:

  • distributing computerized standard supply lists;
  • designing forms and computerizing them for on-line systems, consistent with the budget codes established by the SBM.

The building principals should inform the respective members of the staff of budget procedures, and should distribute budget data collection forms or solicit direct input via the district's on-line system in conformance with budget timelines.

The format of budget request forms should include the following information:

  • the school building or department;
  • item description, supplier and cost;
  • intended use and frequency of use of the various items;
  • a ranking of requested items in order of priority using the following criteria:
    1. is it essential;
    2. will it expand service;
    3. will it save personnel time;
    4. will it affect safety.

Completed requests should be sent to the building principal for review and approval. Once approved by the building principal, the requests are sent to the central office. The business official puts revenue data information together relating to central services, employee benefits and debt service. Revenue estimates are also made in the business office. The major sources of revenue are state aid, the local tax levy and the appropriated fund balance. This information is then collated and placed in the budget by the business official.

The proposed budget is reviewed by the chief school officer, the business official and/or a budget committee. If adjustment is needed, it will be referred through the appropriate staff member for revision and adjustment. After acceptance by the chief school officer, the proposed budget should then go to the board of education for its approval. If reduction is necessary, the board should make the reduction by total sum rather than by item. Where the board makes budgetary increases, these should be for specific items and in sufficient detail to enable administrative staff to carry out the intent of the increased appropriations. Reductions should be discussed by the chief school officer with the administrative staff. The building principals should then discuss respective reductions with the educational staff so that budget decreases are determined according to priority. The current and proposed budget must be separated into the district's program, capital and administrative component costs before being resubmitted to the chief school officer, and subsequently to the board for final approval.



One good aspect of budget administration is an accurate prediction of the year-end surplus - the amount of the unreserved fund balance. Year-end surpluses are the result of revenues in excess of expenditures.

Information concerning fund balance is particularly valuable to the board of education and the administration when making final decisions about the upcoming budget, since the amount of surplus available has a direct impact on the amount of tax levy needed in the next fiscal year.

A fund balance projection should be stated in February of each year. A revised fund balance projection should then be calculated each month until the next year's budget is adopted. Such information is critical as the board considers a budget for the upcoming year, since the total amount of the fund balance, with the exception of up to four percent of the new year's budget, is used to reduce the tax levy in the next fiscal year.



Final approval of the tentative budget document for presentation to the district voters, where required, rests with the board. The chief school officer, and such members of his or her staff as he or she shall deem necessary, should be prepared to explain and justify the budget to the board in sufficient detail to make clear the importance of each item in the educational program.

Final authorization of the budget rests with the voters of the district. When the budget document has been adopted by the board, it becomes the responsibility of the board to ensure that the proposed budget is adequately explained to the public.


The popular budget document may be considered one of the most important publications compiled for a school district during the year. It portrays how the school district will operate for the next fiscal year and it conveys the continuity and improvement of the district's desired educational goals. This document should be easy to read, provide budget information in an organized manner, and in plain language. Its contents should include an explanation of three essential plans: the educational plan; the expenditure plan; and the revenue plan.

  1. The Educational Plan

    The introductory portion of the budget document should provide the setting for the requested appropriations. Among the items recommended for inclusion in such a section are:

    • a letter of transmittal from the board;
    • a statement of philosophy and major objectives of the program of education offered;
    • an overview of the education programs and services of the district;
    • a statement of the relationship of this year's budget to any long-range program;
    • any new services, or changes in present organization, that are being added or undertaken;
    • this year to carry out the educational objectives;
    • a list of budget recommendations which are being deferred for future consideration due to an inability to obtain the desirable appropriations.
  2. The Expenditure Plan

    The expenditure plan should classify budget items through the function and object codes in accordance with the Uniform System of Accounts. As previously noted, in order to provide the comparative statistics which are required to be included in the budget, it will be necessary to divide the current and the upcoming budget into the three components. The expenditure plan should also:

    • compare statistics for at least one year prior to the current proposed budget with respect to expenditures, revenues, fund balance, and tax rates;
    • describe the nature and types of service covered in some of the more general item classifications;
    • provide an attractive and interesting format through pictures, charts, tables, and graphs;
    • explain substantial increases or decreases in appropriations by reference to enrollment data, effects of inflation, or program expansion/reduction;
    • focus attention on past and present successful efforts to provide economy and efficiency in the district's operations.
  3. Revenue Plan

    The income plan should contain at least the following elements:

    1. a listing of anticipated revenues with an explanation of substantial increases or decreases;
    2. an explanation in general terms of state aid and types of programs funded by state aid;
    3. an indication of the estimated amount to be raised through local taxes.
    4. fund balance - appropriated and unappropriated

    Additional helpful information that should be included in the popular budget are:

    • a listing of voter qualifications;
    • information concerning budget hearings, annual meetings, and budget votes.

    The popularized form of the budget should be approved by the board prior to release.


School districts whose voters fail to approve the board of education's proposed budget must operate on a contingency budget (see APPENDICES C, F AND G). The board of education may present the original budget or a revision of the budget to the voters two times for approval. In the event the board declines this course of action, Section 2008 of the Education Law provides a means whereby a stipulated number of citizens may petition the board to call a special district meeting to vote on one or more budget related measures. It is generally considered good practice to submit a budget for a second vote.

If no budget has been adopted by the voters by the beginning of the new fiscal year, the board must identify those items of contingent nature and adopt a budget that includes only contingent items and is within the calculated administrative budget and tax levy caps (see APPENDICES C, F AND G). These items can then be entered in the district accounting records to enable salaries and bills to be paid. If a new budget is adopted records may be adjusted to reflect the changes. If no change occurs, care should be taken by the board and the administration to ensure that the administrative and contingent budget caps are not exceeded and that only expenditures for teachers' salaries and ordinary contingent expenditures are included.

Last Updated: July 11, 2013