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Reaffirming Your Budget Assumptions

By Tahir Ahad - December 5, 2008
(Part five in a series on managing school district finances during challenging economic times.)

In the previous articles in this series, we discussed cash flow management, and development of enrollment projections.  We also talked about holding conversations with your partners in education such as your employee unions, and communicating with the community and informing the community about budget realities.

Now, it is the time to start preparing for real budget reductions.  Most of the school districts have board-approved budget assumptions in place.  If you have not clearly delineated budget assumptions, now is a good time to develop them.  As a starting point, the existing staffing and budgetary allocation practices can be formalized in a written document as preliminary budget assumptions.

Already existing budget assumptions should be carefully reviewed, and actual budgetary practices should be compared with the board approved assumptions.  During the course of day-to-day district management, variations from the approved budget assumptions usually creep up.  And these variations almost always cause an increase in the allocated resources above those recommended by the budget assumptions.  A simple review may help one realize immediate savings without the drawn out, painful budget reduction process.

We recommend that you schedule a board discussion of board-approved budget assumptions.  This will allow an opportunity to refresh all memories and to ensure that each decision-maker has the same understanding of the budget assumptions.  Although it would be premature to discuss specific reductions, a discussion of budget assumptions may still help you identify areas of board support (or opposition) regarding various reduction scenarios.

We recommend that you review your staffing allocation formulas and re-familiarize yourself, and in turn your boards and superintendents, of collective bargaining contract or legal limits that may exist in term of class size and student contacts.  A review of the current staffing levels at each school site and each program may be helpful.  We have found that actual staffing assigned to schools, particularly the secondary schools, often exceeds the level required by the collective bargaining agreements.  Please refer to the articles regarding master scheduling in the "Curriculum and Instruction" section of this website.

Making reductions in the budget is seldom a comfortable and pleasant process.  However, it is much easier to eliminate overage than to negotiate or obtain approval for reductions in staff below the contractually required levels.  The elimination of these positions does not  require negotiations and may not even need board approval; although keeping the board informed would be prudent and smart.

School site allocation formulas need to be reviewed and compared with the actual practices.  This is the time to question any past exceptions made in the school discretionary funds allocation.  Any anomalies should be resolved before the actual budget reduction process begins, to avoid any allegation and/or appearance of favoritism.

Also, we recommend that you consider using budget assumptions as the basis for reductions during the budget deliberation process.  A discussion of ratios and allocations is much more comfortable for the board members to discuss, as compared with a list of names and/or positions.  By allowing them to discuss reductions generically, you may help avoid situations where decision making gets tainted because familiar names – in some cases family members – are likely to be affected.

During the times of difficult decision-making and high stress, the administration should utilize all means that assist in keeping budget reductions less personal.

Editor's Note: Tahir Ahad is President of the educational consulting firm Total School Solutions.