PowerPoint on Budget

The first step in budgeting is creating the goals for the school. This entail establishing the number of students admitted, facilities needed and the number of workers (skilled and unskilled) needed in the institution. This is a very important step. The second step is to determine how much the institution has in the bank account. This is meant to help establish how much will be needed (Borough of Staten Island, 2019).

The third step is projecting the expected income or revenue. This could be obtained from tuition fees, or from the government grants. The fourth step is to categorize spending. This where the priorities are made on what is needed and what can wait. The last step is to create the budget spread sheet.

Challenges

There are many challenges that are encounter when making budgets for any company, small or large. First, there is the change in prices of items because of many forces in the market. It has been known that minimum wages keep on changing from one state to another for one reason or another.

Price of items can change because of forces of supply and demand. This is true especially where the trade wars are common. For instance, in the past administration, there was heavy levies on all goods imported from certain countries. This increases the cost of stationary and other learning materials. Changes in prices and cost of operation requires the management to draw supplementary budget which increases the cost incurred.

Inflation is hard to account for when drawing the budget. While the government makes effort to keep the inflation rate very low, there are things that causes the inflation increase significantly. Things affect by inflation is the cost of utilities such as the water, fuel, and electricity ( Potter,Barry, H., & Diamond, 2014).

Assumptions

The assumptions are important when making budgets. The first assumption is that the prices of the items in the budget including the labor will not change. This will help setting prices for all the items needed. The other assumption is that there will be no interruption during the scheduled learning time table. Disruption could be due natural disasters or pandemic such as the COVID-19. Disruption fatally affects the anticipated sources of income even when the recurrent costs are incurred. For instance, during the pandemic, some workers had to be paid even when there were no schools.

The other assumption is that there will be no policy changes from the government that will affect tuition fees or how the government grants are to be spend.

A statement of budgetary priorities.

1. The general reserve for the school should always be maintained at 12%

2. The activities that are supported by the student should be fully recoverable.

3. The budget development should be support by long term budget plan.

4. The ongoing expenditures in school should be supported by the income revenues from tuition fees and government grants.

5. Once a budget is adopted, it should be amended only when there are emergencies.

The first basic principle of the school budgeting framework is very important in funding the school priorities.

The funding formula and its purpose

The main source of the revenue is the tuition fees from the students. The high tuition fees charged the students when used well can fundamentally support all ongoing school operations. From the tuition fees, the board can pay the teachers, buy learning materials pay utilities and pay for the field trips and studies. Also, the equipment needed for technical courses and sciences can be bought using this money ( Potter,Barry, H., & Diamond, 2014).

The second source of funds is the government grants. The good thing is that there is annual state budget allocation to support learning in various institutions. While the grants may have limited uses according the federal and state laws, they help ease the burden of the operation costs.

Lastly there is the money from non-government organizations and donors. This money is not limited like the government grants are. However, it is a requirement by the law for the institutions to report whatever amount of money they receive from donors. Most of the time, this money is used to buy equipment, and sometimes hire teachers and technicians.

Expenditures and bonds

When the expenditures are more than what the revenue can provide, the bonds can be used to fund the operations. Such bonds can be issued public. They could have coupon or can be zero coupon depending on what the board determines (Borough of Staten Island, 2019).

Long range planning

The goal of every school is to make enough revenue to support its operation. To achieve this, most of the money is spend on the education related things such as hiring teachers, buying equipment among others. Highly performing school gets better chances of having more students and receiving more grants from the government. Therefore, the goal should be to get more students through high performance in classes and in the fields.

Prediction of responses

Since the worst case scenario is occurrence of activities that can paralyze learning operation, the school ought to have good credit scores so it can borrow from the financial institutions and from the public.

References

Borough of Staten Island. (2019). Statement of budget priorities: Fiscal year 1992. New York, NY.

In Potter,Barry, H., & In Diamond,A, J. (2014). Guidelines for Public Expenditure Management. Washington: International Monetary Fund.

Budget Worksheet and Template

Use this sheet to calculate prior year (PY) and current year (CY) revenue, expenditures, fund balances, operational balances, and budget balance. You may move or add items as necessary.

Fund 1: Salary

Fund 2: Operating

Fund 3: Building and Construction

Fund 4: Debt Service

Fund 5: Capital Outlay

Fund 6: Federal Grants

Fund 7: Activity

Fund 8: Food Service

Fund 9: Fixed Assets

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Remodeling

Renovations

Installation of service system

Land and building improvement

Purchasing buildings, vehicles, lawnmower and furniture