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Looking Back to Plan Ahead

The importance of historical spending in the budgeting process.

Like any remodeled room, your school’s “new” budget is often the product of the budget that came before it, so understanding your school’s or district’s historical spending is key to crafting a blueprint for a better financial plan. In this post, we’ll identify what you need to efficiently build a “new” budget using historical spending and past financial data.

I often compare the school budgeting process to the act of remodeling a kitchen. Both are seemingly massive and daunting undertakings that require a blueprint, a clear understanding of the existing structure, a vision for the future, and a lot of planning and hard work to turn that vision into reality.

First, like a kitchen remodel, a budget manager must assess their existing structures.

  • How much do I typically spend to run my school?

  • Are there areas where I usually overspend or underspend?

  • What does my current strategic blueprint for my school look like, and can any of those foundations be repurposed or do I have to knock everything down and start from scratch?

With a clear understanding of what exists today, the process of planning and designing the new structure takes off.

  • What does my new enrollment look like? How will I adjust my budget to support more or fewer students with differing demographics and academic challenges?

  • What current strategies aren’t as effective and should be scaled back?

  • What new strategies will be implemented in the coming school year?

  • How much will the new programs cost? Have they been implemented elsewhere that could serve as cost benchmarks?

Like even the most optimistic remodelers or property flippers, once a blueprint is developed, principals and district leaders also must go through a “can I afford it” process. They revise the design and budget to separate their must-haves from their nice-to-haves, to ensure the strategies that do make the cut are aimed at having the greatest impact on student success.

Reviewing Historical Financial Information

To accurately plan for the upcoming year, access to your historical spending is essential. But what historical information should be reviewed during the budget process? There are three areas to consider:

1. Spending by Cost Categories

First, it is important to review how your current spending breaks down subgroups.

  • How much is typically spent on personnel, supplies, contracted services?
  • How much is spent by program or cost type (instruction, staff training, school administration, parent engagement, etc.)?
  • How much is spent by student types (special ed, English-language learners, Free and Reduced lunch)?
  • How much is spent by grade levels?

2. Historical Spending

Second, as your strategic design is being developed, historical spending (both yours and that of your peers) should inform how your plan takes shape.

  • How much did my new program(s) cost to implement at another school?
  • Will I pilot this new strategy at a lower cost in the first year?
  • How will my costs change over time?
  • What results have others seen with these strategies?

3. Available Funds

Finally, an assessment should be made about the funds that are available to carry out your plan.

  • Do I typically spend all of the funds I have available to me?
  • Was my budget built using grant monies or one-time funding previously? Are those funds still available in the coming year?
  • Do I have restricted funds in my budget that must be used in a certain way?
  • Is there an opportunity to seek additional funds to support my plan?

With the right tools in hand, the process of reflecting on your budget does not have to be daunting. An evaluation of historical spending can put the right blueprint in place for a successful financial plan.

Allovue’s budgeting solution provides the link between current year spending, historical trends, and future year budget planning to help you strategically plan for the needs of your students and staff in the coming year. Learn more about how Allovue can help your next budgeting process go more smoothly, quickly, and efficiently today. Contact us for a demo at: laila@allovue.com

About the Author

Image of Kate Kotaska Kate Kotaska is a Senior District Partner for Allovue, Inc. Before joining Allovue, Kate spent the majority of her career in Denver Public Schools shaping the district’s resource allocation model and building a backbone of financial support known as the Financial Partner Network. As DPS’ Executive Director of Budget and Finance, Kate was responsible for streamlining the district’s budget process to maximize stakeholder engagement and transparency. Kate earned her undergraduate degree from Pace University in Pleasantville, NY.

January 18, 2017