How to Develop an Award Winning Budget

1

How to Develop an Award Winning

Budget

ASBO International’s

Meritorious Budget Awards Program

2

Welcome & IntroductionsPresenters

Donna Peterson, MBA Review CoordinatorBob Horwath, MBA Advisory Commitee Chair

Gary Frisch, MBA Advisory Committee Vice-ChairGeorge Lingel, MBA Reviewer

Paul Kelly, MemberDavid Means, Member

Samuel Rippin, MemberLee Legutko, Retired, MemberScott Kies, Review Coordinator

Ketul Thaker, ING, MBA Sponsor

Shirley Broz, Brian Mee, Board Liaisons

Vee Boehringer, Michelle Williams, ASBO Staff

3

AgendaReview MBA Criteria Application ProcessIndependent StudyGroup Budget ReviewQ & A CriteriaReview Process-Reviewer ExpectationsEvaluation/Wrap-UpRoundtable For Questions

4

Overview of MBA Criteria

(Page numbers on following slides tie to the ASBO Publication

“Standards of Excellence in Budget Presentation”)

5

General Criteria

The budget document cover contains:The title “Budget”Fiscal yearFull name of the entityCity/County of the entityState/Providence of the entity

Website address if available

6

7

8

Budget Document is divided into the four major MBA sections

Consecutive page numbers

Table of Contents

General Criteria

9

10

Budget document contains Graphs and ChartsCover letter identifies any information required by criteria that is not relevant to the school entity.Written response to previous year review team comments.

General Criteria

11

12

13

14

15

16

General CriteriaFinal Points

Technically well prepared No spelling, grammar or math errors

Easy to read Clear understandable language

Flow in logical sequence Follow MBA criteria

17

Introductory SectionExecutive Summary

The Executive Summary can be a stand alone document and presents the budget in narrative, numeric, and graphical form.

Pages 3-14

18

Executive Summary

Make sure to include:All fundsKey issuesBudgeting processLead-in to other budget sections

Pages 3-14

19

Introductory Section

MBA Certificate Include a copy of the Meritorious Budget

Award certificate if received for the prior year. Page 16

20

Introductory Section

School Board Members and Administrators

Include a listing of members of the school board and first level administrative personnel.

Page 15

21

Introductory Section

Other InformationBuild a picture of the district using varied methodsSustain reader interest, highlight major pointsExplain budget decisions and recommendations Pages 3-16

22

Organizational Section

The document should provide an explanation of the school entity which includes the following:•Legal autonomy, fiscal independence/dependence•Level of education provided•Geographic area served Pages 17-18

23

Organizational Section

Number of students and number of schoolsNumber of funds and fund types and titles

Page 17

24

Organizational Section

Explanation of classification of revenues/expendituresExplanation of measurement basis for budget revenues/expenditures

Pages 23-25

25

Organizational Section

Budget and Financial Policies

Include significant budget and financial policies, rules, procedures, and regulations at the legal, board, and administrative levels.

Pages 21-33

26

Organizational Section

Organizational Chart Include an organizational chart which includes the administrative

staff by position or title.

Page 20

27

Organizational Section

Mission Statement Include a coherent statement of the

mission of the school entity.

Page 19

28

Organizational Section

Major Goals and Objectives

Include the major goals for the school entity. If the cost of a goal or objective is significant and measurable, include the cost.

Pages 21-22

29

Organizational Section

Operating and Capital Budget Process

Describe the budget development process and timeline including capital.

Pages 26-27

30

Organizational Section

Budget Administration and Management Process

Describe the budget administration and management process. Pages 26-27; 32-33

31

Financial SectionThe “Heart” of the Budget Document

32

Financial Section

All governmental fundsAll proprietary fundsLevel of detail required by law or adopted by the governing body

Pages 34-116

33

Financial SectionRevenues by sourceExpenditures by function and object Comparative

Pages 40-41; 43-47

34

Financial Section

A pyramid approach should be used. This is a summary of all

funds, followed with the presentation of individual funds.

35

Financial Section

Pyramid Approach

Optional: The presentation may be followed by program, location, and/or administrative unit budgets.

Pages 48-116

36

Financial SectionFund balancesRevenuesExpendituresChanges in Fund balances

Pages 35-36

37

Financial Section

Other financing sources/usesThe current year budget or estimated current year actualThe proposed budget year

Pages 34-116

38

Financial Section

Three prior years of actual data is preferred in the Financial Section. The information may be presented in the Informational Section in a form and format which is comparable to the current year and proposed year.

Page 38

39

Financial Section

Budgeted capital expendituresMajor capital projects for the budget year (whether authorized in the operating budget or in a separate capital budget).

Pages 98-99;

137

40

Financial Section Describe to what extent capital

improvements or other major capital spending will affect the school entity’s current and future operating budgets.

Page 98

41

42

Financial SectionFocus on reasonably quantifiable additional costs and savings (direct and indirect) or other service impacts that result from capital spending.

Pages 98-99

43

Financial Section

Include financial data on current debt obligations.Describe the relationship between current debt levels and legal debt limits.

Pages 96-97

44

Financial Section

Explain the effects of servicing debt levels on current and future budgets.

Pages 96-97

45

Informational Section

Present the assessed value of taxable property

and the market value of taxable property for: A minimum of three years actual Current year budget and/or estimated current

year actualThe proposed budget year

Pages 119-

120

46

Informational Section

Calendar Year

Fiscal Year Market Value

District Assessed Value

% Increase in Assessed

Value2002 2002-2003 7,015,660,839 2,338,553,6132003 2003-2004 7,324,028,445 2,441,342,815 4.40%2004 2004-2005 8,105,046,993 2,701,682,331 10.66%2005 2005-2006 8,642,540,676 2,880,846,892 6.63%2006 2006-2007 9,054,472,803 3,018,157,601 4.77%2007 * 2007-2008 10,087,602,812 3,362,534,271 11.41%2008 * 2008-2009 10,670,363,697 3,556,787,899 5.78%2009 * 2009-2010 10,940,724,114 3,646,908,038 2.53%2010 * 2010-2011 12,145,924,393 4,048,641,464 11.02%2011 * 2011-2012 12,788,640,432 4,262,880,144 5.29%2012 * 2012-2013 13,081,009,792 4,360,336,597 2.29%

47

Informational Section

Include property tax rates and collections for: A minimum of three years actual The current year budget and/or estimated current

year actual The proposed budget year Describe the tax rate relationship versus taxable

value Pages 119-120

48

Informational Section

Include an analysis of the budget’s effect on taxpayers for:Minimum of three years actualCurrent year budget and/or estimated current year actualProposed budget year Page 119

49

50

Informational Section

Provide five-year summary comparison of revenues and expenditures (three prior years actual, current year budget and/or estimated actual, and the proposed budget year). If the three prior years actual data is presented in the Financial Section, this presentation is not required.

Pages 123-126

51

Informational Section

All years must be presented in a comparable form and format, whether presented in the Financial or Informational Section

52

Informational Section

Five-year summary must be presented for all governmental funds. (Presentation of similar data for other funds is optional.)

Pages 123-126

53

54

Informational Section

Three years of budget forecasts for all governmental funds. Three year historyCurrent budgetThree year forecasts

Page 122

55

56

Informational Section

Include revenues, expenditures and beginning and ending fund balances. Forecasts for non-governmental funds is optional.

Page 122

57

Informational Section

The document should present:A minimum of three years of actual student enrollment history by schoolCurrent budget and/or estimated current year enrollmentProposed budget year enrollmentA minimum of three years of enrollment projectionsEnrollment forecasting methodology and techniques

Pages 129-130

58

59

Informational Section

Present personnel resource allocations for:

Minimum three prior years actualCurrent year budget and/or estimated current year actualProposed budget year

Page 128

60

61

Informational Section

Include the bond amortization schedule(s) of the school entity.

62

Informational Section

Provide performance measures for three prior years such as:

Standardized test scoresDrop-out ratesAccomplishment of goals and objectivesParent/student satisfaction surveysOther performance measures

Pages 131, 132-136

63

Informational Section

ISAT Performance History 1999 - 2007MATHEMATICS

Percent of District 220 Students Meeting and Exceeding State Standards

89

80

76

92

83

75

93

88

78

9390

78

95

91

82

97

91

82

94 93

80

9896

93

9997

94

40

50

60

70

80

90

100

1999 2000 2001 2002 2003 2004 2005 2006 2007

Grade 3 Grade 5 Grade 8

64

Informational Section

Include other information that would help the reader understand the past and future directions of the school entity.

65

Informational Section

Include a glossary of terms to improve understanding.

Pages 142-145

66

Application Process

67

Applicants of the Program

Any school entityEducational service agencyPrivate schoolCollege or universityMembership with ASBO International not required

68

Criteria Location Checklist

The final document is not complete until applicants review their budget against the criteria using the checklist and adjust if necessary.

69

Criteria Location Checklist

Applicant lists the page number(s) where each of the criteria are satisfiedReviewers rely on checklist to evaluate the budget

70

Application MaterialsApplication and PaymentCover letter explaining criteria not relevant to the school entityFour copies of the budget if hard copyFour copies of the checklist if hard copyFour copies of written response to each of the previous year reviewer comments

71

Application Materials

Budgets should be submitted in the same form in which they are approved

Applicants are discouraged from submitting supplemental materials

72

Application Deadline

Submitted within 90 days of FINAL legal adoption dateAdoption processes may include several datesMay not be submitted prior to final adoption

73

Receiving the Award

Notification of the award and confidential comments.

Continuing education credit in ASBO’s Professional Registration Program.

74

Receiving the Award

Notification sent to the Superintendent and School Board.

A personalized award plaque and certificate.

75

Receiving the Award

Recognition in ASBO Membership Directory, Accents Online, ASBO Affiliate newsletters and ASBO’s Web site

News release for the local media

76

The award is granted for only one year.

Encourages applicants to apply every year.

MBA Award

Presented To

77

Criteria and budget documents are not static.

Real excellence is achieved through the perennial award.

MBA Award

Presented To

78

Denial of the Award

Notification is sent only to the applicant with confidential comments.

79

Conditional Award

Warning that they have not followed program criteria

Still receive recognition of award

Must make reviewer changes or may not receive award in the future

80

Appeal Process

Within 30 days, a school entity may appeal the decision. Materials sent to Appeal Review Team.Process takes approximately 90 days.

81

Questions and Answers Regarding General Criteria

and Budget Document Sections

82

Independent Study of Budget

83

Group Budget Review

84

Questions and Answers Regarding Criteria

85

MBA Review Process

“The reviewer comments rank as the number one benefit of participation”

86

Budget ReveiwReviews take 3-4 months

Completed by professionals skilled in evaluating school budgets

Includes comprehensive comments

Reviewers make final recommendation

87

What Reviewers Expect

Document satisfies MBA criteria (not all budgets satisfy every criteria)

A cover letter to include:

a)List and explain any exceptions to the MBA criteria

b) If any previous year reviewer recommendations were not incorporated in the current document and why

88

MBA Reviewers’ Responsibilities

Follow criteria, make written comments

Evaluate whether failure of document to meet any one or a combination of criteria is sufficient to deny an award

Detail reasons for conditional award or denial

Refrain from personalized comments

89

Complete Workshop Evaluations

90

Roundtable for Questions

91

MBA Award Winning Budgets

Sample budgets are available. Visit ASBO’s Web site for more information.

www.asbointl.org

92

ASBO International11401 North Shore Drive

Reston, VA 20190

(703) 708-7067

williamsmd@asbointl.org