GovernanceCorner Practical tips from our MIG faculty

Reviewing the first interim budget
Board trustees have a responsibility to ensure the fiscal solvency of school districts and county offices of education. How is this accomplished? By monitoring the budget at regularly scheduled board meetings. December and March are the designated times to officially review budgets. December’s interim review is the first snapshot of the real numbers for the current school year. The revenues and expenditures from July 1 through Oct. 31 will be reported. The first interim review allows a board to ask important questions about the current budget and look for possible fiscal trends.

CSBA suggests submitting questions ahead of the board meeting to the superintendent and chief business official. Items to consider while reviewing the first interim budget include:

  1. How much is the reserve? Is the reserve adequate? Is it above the mandated percentage?
  2. Does the budget funding reflect the board’s priorities?
  3. Is equity inherent in budget priorities? Does this budget serve each and every student?
  4. Does the budget spend more than the anticipated revenue? If so, what is the current deficit amount? Is the deficit planned? For which programs were these funds used? Are these expenditures one-time or will they repeat in future years?
  5. Are there unanticipated revenues or expenditures in the budget?
  6. Reflecting on previous and multiyear budgets, is there an ongoing or increasing deficit where the expenditures exceed the revenues?
  7. Do you need to reallocate funds or make cuts so you can cease structural deficit spending?
  8. When projecting out three years, do your financials improve? How or why?
  9. Do you have annual budget workshops to gain a better financial understanding of the district’s budget?

The information gathered by asking these important financial questions supports trustees in developing a deeper understanding of the fiscal health of the school district or county office.

Balancing district budgets is expected to be especially challenging in the coming years. The 2020–21 state budget signed in June leaned heavily on deferrals in lieu of cuts to K–12 education funding and counted on significant additional federal funding to bolster schools financially in their monumental task to safely reopen schools — money that did not materialize. Additionally, as local educational agencies look to balance their budgets during these tight times, they face the prohibition of layoffs for certificated and specified classified employees (nutrition, transportation or custodial services) in fiscal year 2020–21.

CSBA’s Online Learning Center module, Smarter School Spending, as well as Course 3 in CSBA’s Masters in Governance program, School Finance, offer further training to school board members on LEA budgets.