Financial Management Program. GASBO 2016 Strategic Budgeting John G. Hulsey, CGFM, CPFO

Transcription

1 Financial Management Program GASBO 2016 Strategic Budgeting John G. Hulsey, CGFM, CPFO

2 Learning Objectives At the end of this session, you will be able to - Explain how strategic planning impacts the budget Recall definition of a balanced budget Discuss characteristics of a budget policy Recount how fund balance is determined Discuss different budget formats 2

3 STRATEGIC PLAN S ROLE IN BUDGET PROCESS 3

4 Strategic Planning is A systematic process that helps you identify: why your organization exists, whom it serves, what benefits it provides, and the vision of how citizens can best be served

5 Strategic Planning Why do it? Reflects mission Communicates goals and objectives Develops ownership

6 Strategic Planning Why do it? Focuses resources Measures progress Ensures that everyone is working towards the same mission and vision Focuses organization

7 Fulton County Public Schools Vision Statement Our Vision is for all students to learn to their full potential.

8 Fulton County Pubic Schools Mission Statement Our Mission is to educate every student to be a responsible, productive citizen.

9 Question How does your school s vision and mission translate to the budget?

10 Goals & Objectives A goal is a broad statement of what an activity/function expects to achieve An objective is the method to accomplish an established goal Well written objectives are S-M-A-R-T 10

11 Goals and objectives Should be related to budget requests Should roll up into overall school strategic plan goals Budget requests not consistent with goals and objectives = unfunded budget requests Goals = desired outcome or state Objectives = steps taken to achieve the goal 11

12 Performance Measurement vs. Performance Measures Performance measurement refers to the process for tracking a government s progress toward achieving its mission, goals and objectives. A performance measure is defined as a specific quantitative or qualitative assessment of results obtained through a program activity. 12

13 Balanced Scorecard Approach is based on balancing performance in four key areas - Financial perspective - Internal process perspective - Learning and growth perspective - Customer perspective 13

14 Fulton County Schools Balanced Scorecard 14

15 Accountability Assign budget to areas of focus in the strategic plan What are the goals and objectives in the strategic plan Goal Develop customized programs of study responsive to the individual interests and needs of all students. Objective Diversify instructional delivery methods through technology (such as virtual and blended classes) and flexibility (such as independent study programs). 15

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17 BUDGET BASICS 17

18 What is a Budget? Allocation of scarce resources among various competing alternatives Financial plan to achieve government s objectives 18

19 Process or Product? Budgeting is as much as a process as a product All participants should know what is expected of them The public should be informed 19

20 Balanced Budget Estimated Revenue = Budgeted Expenditures Adopt by official school board action One-time expenditures should be funded by one-time revenue or fund balance Fund balance, difference between revenues and expenditures over time 20

21 Fulton County Schools Fund Balance 21

22 Budget Amendments Changes to original budget require return to school board for approval Budget policy will determine at which time this is required 22

23 What is a Budget Policy? Set of guidelines or statements which set the parameters, or boundaries within which the budget process takes place 23

24 Budget Policy Addresses Balanced budget Level of control Authority levels for budget changes Amendments to budget Contingency options Capital expenditures vs operating expenditures 24

25 Budget Process Elements of a successful process Goals and objectives (sense of direction) Performance measures Administrative plan Budget calendar 25

26 Question What are some performance measures your school currently collects? How might you align these measures with the budget? 26

27 Administrative Plan Administrative Plan Describes the various steps involved Describes the persons responsible It is a policy statement 27

28 Budget Calendar WHO is responsible for the task WHAT is to be accomplished within the task WHEN is the task to be completed 28

29 Fulton County Schools Budget Calendar June/July, Budget Development Starts November, Develop Strategic Initiatives and priority list for the next budget cycle December, Enrollment Forecast Released, Prepare Preliminary Revenue Assumptions March, 5 year enrollment forecast presented including impact on construction 29

30 Fulton County Schools Budget Calendar March, Preliminary Budget presented to Superintendent and Cabinet for review followed by presentation to Board for discussion April, Budget presented to the public Mid-May, Tentative Board Approval June, Board Approves Final Budgets and Millage Rates 30

31 Fulton County Schools Budget Calendar June, Millage Rates approved by Fulton County Commissioners Tax Digest and Millage Rates presented to GDOR to be certified 31

32 Fulton County Schools FY17 Budget Calendar 32

33 Fulton County Schools Revenues Common Revenue Sources Property Taxes, 62% State, 37% QBE Local Funds, 1% Interest, tuition, rentals, field trips, donations 33

34 FY17 Fulton County Schools Activity Budget Format 34

35 FY17 Fulton County Schools Program Budget Format

36 Line Item Traditional budgeting Most frequently used Primary emphasis CONTROL Focus is on inputs (what is to be spent) Use to provide additional detail regarding program or activity budgets 36

37 Fulton County Schools Line Item Best to use line item within activity or program budgets 37

38 Sample Budget FY17 Fulton County Schools 38

39 Budget Message Highlights significant changes in revenues and expenditures Includes significant budgetary assumptions Explains significant staffing and salary changes Identifies budget priorities 39

40 MONITORING THE BUDGET 40

41 Expenditure Controls Purchase orders method of authorizing expenditures and controlling spending May encumber contracts and budgeted expenditures Unallocated reserves may hold a portion of the budget in a contingency line for unexpected expenditures or in case of revenue shortfall 41

42 Expenditure Controls Position control ensures positions are limited to those funded in the budget process Ceilings or freezes used in financial crisis to freeze spending on some or all items or cap expenditures for some or all purposes 42

43 Revenues Actual revenue should be compared to budget estimates to ensure spending can occur at budgeted levels Revenue downturn, spending levels must be reduced 43

44 Periodic Reporting At least quarterly, a financial report should be prepared that compares actual to budgeted information Report should be presented to management and the governing board Explanations of unusual variances should be included 44

45 CAPITAL BUDGETING

46 Operating budget Two Components of Financial Planning Ongoing costs for staffing, materials, supplies Capital budget Equipment and vehicle replacement and additions New facilities

47 Key Point If new facilities are planned, make sure the operating costs have been determined Often initial capital outlay funds are available Ongoing operating costs are problematic

48 Ongoing Operating Costs Staff required Utilities cost per square foot Maintenance cost for cleaning, grounds, repairs Instructional materials

49 Capital Replacement Maintain listing of all items such as computers, servers, printers, and other costly equipment Include original purchase date and cost Estimated date for replacement with associated costs Include in annual budget costs of those capital assets to be replaced in the current year

50 Advantages of Capital Worksheet Facilitates planning for the current and future years capital replacement Provides information in the event an unexpected funding source becomes available Provides information to elected officials when planning for future facilities

51 Budgeting for Capital Determine funding options ESPLOST Grants Bonds Leases Include cost escalations

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53 The Carl Vinson Institute of Government. All rights reserved.