FOLLOW THE MONEY$$$ SCHOOL FUNDING IN NORTH CAROLINA Presented by Jennifer S. Bennett Jennifer S. Bennett Assistant Superintendent Business & Finance Assistant Superintendent for Business & Finance Vance County Public Schools Vance County Schools
My Background 24 years School Finance experience Worked at the State Dept. level and LEA level so understand both sides of the policy to reality coin Have done consulting work related to School Business in NC, SC, and VA Enjoy helping districts figure out how to maximize the resources for their students Best project lately is getting to start an Art-Internship project with our HS students in Vance to create job opportunity experience and create fun spaces for our school district
4 Anyone Can Engage with Students Helping create avenues for QUAD D Learning opportunities Quad D-JBennett-VCS
KEY OBJECTIVES How Schools are Funded in NC Budget/Spending Basics Adjusting a School’s Budget Short walk-thru adjusting a school’s budget after “reality” hits with students and revenue Final Thoughts
How Schools are Funded is Legislated NC Constitution, Article IX School Machinery Act of 1931 & 1933 “ State revenue sources the instructional expenses for ” current operations… “… facilities requirements for a public education system will be met by county governments. ” School Budget & Fiscal Control Act 1975 General Statute 115C-408(b) Defines State Public School Fund and Local County Appropriations General Statute 115C-12 (18)(a) & (b) = Uniform Education Reporting Systems (1989-90) Ensures consistent reporting of data across public schools Leandro Court Ruling: Sound Basic Education Still in the court system
8 UNIFORM EDUCATION REPORTING The budget code is defined by the NC Department of Public Instruction under UERS General Statutes. LEAs can define the last 5 digits only of the budget code. Purpose Object Departm ent 1 -5 3 3 0 -0 6 1 -4 1 1 -XXX-RCC-YY FUND PRC Location Use The PRC and Object codes tell you funding pot & type of expenditure. Most Board of Education ’ s Budget Resolution during the fiscal year is at the Fund-Purpose Code level of the Budget Code.
Typical Breakdown of Revenues Grants - Child Nutrition Restricted Fund 5% 6% Capital Outlay Fund 6% Federal Grants State Public Fund School Fund 10% 62% Local Current Expense Fund 11%
Low Wealth Counties – FY 17-18 Why NC relies on State Funding so heavily for its Public Schools
Most School Systems < 10,000 Students
Great Document for Reference is the Highlights of the NC Public Schools Budget http://www.ncpublicschools.org/fbs/resour ces/data/ Page 5 = Overall State Budget for Schools Shows all the different categories districts receive Charter Schools receive their per-pupil share from most of the categories in one What is lump pot (PRC 036). Funded by Info on Lottery funds, Federal, Charter School data, Teachers Salaries, etc. the State?
13 Education Budget “ Drivers ” Average Daily Membership (ADM) – STUDENTS Is your enrollment growing or decreasing? Salaries & Benefits Are you adjusting staffing up or down for student shifts? What do you need for each 1% salary increase for staff? Hospitalization Rates averaging increase of $150 per person – current rate $6,104 per employee Retirement Rates increasing 1.5% annually, current rate 18.86% CONTINUATION Funding What do you need to remain “AS-IS” for any fluctuations in the above plus CPI, Operational Costs, etc.?
Budget Timing – NOT IN SYNCH January - March – Planning for next year Also, have to true-up current year for any state adjustments April – BOE’s have to finalize request for County Funds May BOE request due (by law) to County May 15 th BOE must finalize Teacher Contracts for the next year by end of May (What is wrong with that timing?) June – Counties approve their budgets We all hope the State has approved their budget but… August-Sept – Students return October-November – Federal funds released (see potential cash flow problem??) State Adjusts funding for ACTUAL students in December
Charters - Transfers Capital Projects Child Nutrition 3% 2% 6% Supporting Services 19% Instructional Services 70% How Most Districts Spend Funds Most in the Classroom – Supporting Services includes Transportation & Maintenance
Basic School Budget Components Staffing --- Salary and Benefits – 80-85% of School Budget will be Personnel Operational Costs Electricity, Water, Waste, Gas, Network, Telecommunications Maintenance/Custodial Costs Transportation Services Child Nutrition Services Central Support Services (Insurances, Fiscal Support, BOE Costs, etc.) Instructional Supplies & Materials Special Programs Exceptional Children, Limited English, Academically Gifted, Disadvantaged, Homeless
18 Flexible Financial Management Most school districts have declining student populations due to competition, declining birthrates, or aging populations. So the new reality is creating flexible budgets to allow for unforeseen revenue adjustments. Small districts have more problems since there is less margin for error and little fund balance or safety net from the county, yet still have state and federal compliance standards.
Sample ABC Elementary School Small <400 students – in city limits Low-Performing (D or F) for over 5 years 2 nd Year Principal (at this school – total 10 yrs. exp.) High Poverty - 75% Low Income 60% Black, 25% Hispanic, 15% White High Staff Turnover – over 25% annually Most staff has less than 7 years experience No PTO/PTA formed Became a “RESTART” school so has flexible use of funding and staffing
Who's Accountable?
What are the Priorities vs. Wants? Adults Students Stabilize Staffing WE WANT TO LEARN! Offer Incentives – More $$ Reading Professional Development Math Coaching FUN stuff – keep me interested Classroom Management Technology Leadership
Budget Adjustments to Reality Have to adjust the budget to match Revenue You planned in April-May for 350 students (down 30 from prior year) You retained your staff in May (under state law) and started hiring for August State increased Retirement rate by 1.73% and not the estimated 1% projected….yikes! Actual students who showed up = 269….NOW WHAT?
Key Components-Strategies 85% is Payroll so if significant revenue reduction it will impact staff. Are there any vacancies? Is there room in class-size? Are there non-classroom positions that can be eliminated or delayed? What do you need as the priority for STUDENT Achievement? What is essential to get you where you need to go? What other items are optional for the year? What can the district do to help? Anything?
School Level vs. District Level In NC Schools (Principals) don’t have to worry MUCH with funding sources They get staffing positions They get Title I $$ They get Non-Salary funds from State and Local They have to stay balanced with what they get They’ll have school level funds from fund raisers and grants District Level worries about how it all fits together to maximize the funds while staying compliant with the intended use We want the schools concentrating on Instruction and not worrying about all the varied complexities with school funding
Key for Schools is to Know What They Want to Accomplish in the Year Schools should do a data-driven problem analysis to determine how to focus on school reform. They should make sure that all options are laid out in the Restart plan and how all the funding and staffing will work together. Lay out the contingencies… ex: what to do with vacancies – replace, save the dollars, use for something different? Know WHY? Include options in the plan so that the school is able to react effectively as the year unfolds and take advantage of situations to maximize resources. (ex: you have lapse salary from vacancies of $8,000 in March and have 2 weeks to effect the PO.. Ask what would you do?) Understand the District needs as well as your own – how can flexibility help the overall district budget (operational costs, maintenance offsets, etc.)
Maximize Financial Flexibility Include Finance in discussions or you just have 2 parts of your triangle School Goals SCHOOL FUNDI NG & I m provem ent Flexibility PLAN
Thank you for your Time
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