Developing a budget that optimally aligns resources with student achievement is for many school districts the guiding principle in their budget development process. The budget objective should be to allocate available dollars in a way that creates the most benefit for students vis-à-vis the money spent.
Due to many factors, school officials in Shelby County, Tennesee found themselves in the enviable position of operating in the black in the 2017 fiscal year after having to face down $50 million in proposed budget cuts in 2016. While this may have kicked off a positive cycle that should strengthen the district’s future budget picture, officials say the district still doesn’t have enough money to propel students to academic success. As the district’s leaders complain of being woefully underfunded by the state, an $84 million “rainy day” fund has raised eyebrows in a district serving a significant number of impoverished students (Chalkbeat.org, 2017).
Shelby County school officials credit “making smarter decisions using data more than we ever have before” for the dramatic swing from operating in the red to landing solidly in the black. Statistical methods, such as data mining and modeling, used to identify the factors that predict the likelihood of a specific result have long been a standard in the private sector, but many in education consider data analysis a luxury rather than the foundation for making decisions.
A needs assessment process can be used to frame and guide budget deliberations. This process is designed to collect and analyze relevant data to understand the most pressing needs of students, schools, and/or educators; determine root causes; and then prioritize strategies to address greatest needs.
Data collection and analysis consists of three parts:
- Collecting existing data from the school district’s data system with several years worth of data in multiple areas
- Collecting new data from multiple external sources to address the gaps not covered by existing data
- Analysis of data to identify needs
Setting an appropriate reserve fund level is a balancing act and should be unique to each school district. The objective is to have the resources necessary to meet both planned and unplanned financial challenges, while spending as much of the current year’s resources as possible on the current year’s programs and students. Each district would examine the risk factors that apply to determine how much is needed in reserves. It requires the careful analysis of data to rank and score said risks and establish reserve levels commensurate with those risks.
Some possible risk factors include:
- Declining enrolment
- Private school voucher initiatives
- Delays in cash receipts
- Unstable labor relations
- Debt service risks
- Reliance on one-time revenue sources
- Exposure to significant one-time expenditures
The capability to analyse vast amounts of data and perform adequate risk assessment is not available when using conventional Excel-based spreadsheet budgeting.
Through Questica’s K-12 budgeting platform, school districts can gain granular insight into their funding by streamlining data from multiple sources. With all the data in one place, there is no longer a need to re-key the summary data from spreadsheets, while advanced searches are simple and have eliminated the need to slice through massive quantities of data.
Questica Budget is a web-based budgeting tool that gives school districts the ability to add data and make modifications, then roll the information forward into future years without any complications. Creating different “what-if” scenarios for modifications to reserve fund requirements is straightforward, and the impact of each scenario is immediately understood through an easy-to-use interface.
Dedicated to serving the North American public and not-for-profit sectors, Questica’s budget solutions have been implemented by some 600 customers.
To find out more about developing a budget that is based on the identified needs and risk factors of your school district, contact us to arrange a demo of Questica Budget.
