Republic of the Philippines

State Universities and Colleges

Guimaras State College
Graduate School

Ed. 220 SCHOOL FINANCE AND BUSINESS

ADMINISTRATION

THE EDUCATIONAL BUDGET

Topic:

GAY FLOR V. DUEÑAS

Reporter and Researcher

MA. FE ABELLA-PANES, Ph. D

Professor
 Republic of the Philippines
State Universities and Colleges
Guimaras State College
Graduate School

Introduction:

Budgeting is the translation of programs, projects and activities into their

resource requirements which are expressed in monetary/financial terms. It allocates

resources to specific actions deemed necessary to achieve predetermined

objectives.

William Hartman, author of School District Budgeting (1999), defines

education budgeting as a “working tool” for the successful operation of states and

local school districts, and as a “significant opportunity to plan the mission, improve

their operations and achieve their education objectives”(p.1). As such, the

budgeting process allows various levels of government to “make better financial

and program decisions, improve operations and enhance relations with citizens and

other stakeholders”

I. The Budget and Educational Purposes

The School Budget- accompanying process- provides school districts and

their leaders with an opportunity to justify the collection and expenditure of public

funds. In its most simple definition, a school budget describes a district’s plan for

the upcoming year as related to anticipated revenues and expenditures. School

budgets allow districts to translate sometimes intangible missions, operations and

objectives into reality by outlining and providing specific programs and

funding/financial terms. A school budget helps bridge the gap that can exist

between a district’s stated goals and resource allocation. The budget process forces
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State Universities and Colleges
Guimaras State College
Graduate School

the discussion that will to inform choices among various programs competing for

the limited available resources. As William Hartman writes, key steps of the school

budget process include, “establishing the district’s objectives and priorities;

allocating resources; involving the public through budget hearings, school board

decisions and other means of representative democracy; and in some states,

conducting budget elections.” (Hartman,1999)

A. STEPS IN BUDGETING PROCESS

A budget process refers to the process by which government create and

approve a budget.

1. Identification of programs, projects and activities to be implemented

during budget period. These largely drawn from the planning process wherein

specific interventions are formulated to respond to problems and issues and or to

attain specific targets.

2. Identification of resources – manpower, financial, physical and other

resources required to carry out the programs, projects and activities and the

quantities of each resources.

3. Costing or resources which would translate the resource requirements into

monetary values.

4. Preparation of the budget in accordance with the mandated form and

content spelled out in guidelines issued for this purpose.

5. Securing official authorization to allocate and use resources.

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State Universities and Colleges
Guimaras State College
Graduate School

B. THE SCHOOL BUDGET CALENDAR

A calendar indicating the key dates in the process of preparing and

approving the budget. These would include the date the budget circular is issued,

time period for discussing estimates with the ministries and departments, the date

the executive budget is submitted to the legislature, legislative review including

dates for budget for budget hearings, and the date the budget appropriations bill

should be passed by the legislature. There may be other important steps in the

process, which varies by country.

An example of budget calendar from a sectarian school.

BUDGET CALENDAR

September 15 School unit submits preliminary budgets to the coordinator.

For this purpose, revised statement of Income and Expenses of

the previous year will suffice.

October 1 University Budget Committee meets with school heads to

determine the source of revenues to meet projected

disbursements.

October 15 Budget Coordinator sends out budget forms to budget units.

October 20 School units starts to work on faculty performance evaluation.

Personnel Office sends out performance evaluation forms for

non-academic personnel to budget administrators.

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State Universities and Colleges
Guimaras State College
Graduate School

November 20 Budget administrators submit final budget request for salaries

and Benefits, Supplies, and Expenses, Major Improvement and

New Equipment to the Budget Coordinator.

December 1-15 Rank and Tenure Committee meetings. Faculty members

whose contracts will not be renewed for the coming year

should be notifies by January 1st.

December 20 Budget Administrators submit non-academic personnel

evaluation forms to Personnel Office.

January 15 School submits tabulated summary of faculty performance

evaluation to Personnel Office.

January 20 Salary Administration Committee starts to work on non-

academic performance evaluation results, promotions and

positions.

February 1-15 University Budget Committee meets with Auxiliary and service

units

March 15 University Budget Committee work to be completed. Summary

and other schedules to be prepared for sub,ission and review to

the University President.

May 5 University President presents budget to Board of Trustees for

Approval.

May 13 Approved budget documents sent out to budget units. These

documents include details and breakdown of Salaries and

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State Universities and Colleges
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benefits, supplies and major improvements and new

equipment.

May 15 Personnel Office prepares official plantilla for distribution of

budget.

C. LONG RANGE BUDGETING

It refers to the type of budgeting that usually lasts for more than a year.

Planning this kind of budget has involved a lot of uncertainties since predicting how

the market moves and how business cycles can change can be difficult. The Long

Range Budget is the kind of planning that is important for any business or individual

who is concerned about sustainable profitability. A budget with a term usually

longer than one year. A long-range budget involves more uncertainty than a short-

term budget because, typically, market movements and the business cycle are more

easily predictable in the short term. On the other hand, planning for the long-term

is necessary in order to ensure sustainable profitability. Thus, planning for the long

term is necessary, one’s plan must be flexible to account for the uncertainty

inherent to it.

Planning Your Business’ Long Range Budget

 Start by setting up a plan that will cover the next year on a monthly

basis. Establish the budget for the categories within the first month.

Determine your sales numbers so you can calculate the gross profit

margin.
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State Universities and Colleges
Guimaras State College
Graduate School

 The amount of your company’s product or service that you can sell

will be determined through a careful study of the market where you

operate.

 The cost of all the goods sold by your business can be computed by

using the actual costs that are linked to the production of the item on

percentage.

 When computing the operating expenses, think about the insurance,

advertisements, depreciation and auto. The tax rate that you will

factor in should be based on the actual tax rates of your business.

 Breakdown the contents of the inventory by category. You can get the

total amount if you base it on an estimated number of days.

 Consider your business’ intangible assets. These refer to your

investments, equipment’s real estate, patents, or copyrights.

 For the liabilities, make sure that the bank loans are broken down

separately. This should also be observed when dealing with the equity

of the stockholders.

D. PARTICIPATORY BUDGETING

Participation in Budget Making is an umbrella term which covers a

variety of mechanisms that delegate power or influence over local budgets,

investment priorities and economic spending to citizens.

Participatory budgeting involves citizens directly in making decisions about

budget issues. This can take place on a small scale at the service or neighbourhood
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State Universities and Colleges
Guimaras State College
Graduate School

level, or it can be done at the city or state level. In practice, the power delegated to

the citizens in the decision processes varies, from providing decision-makers with

information about citizen preferences to processes that place parts of the budget

under direct citizen control. Generally, the amount of power devolved has tended to

be larger in Latin America where participatory budgeting was developed compared

to in Europe and North America. Discussions are often limited to new investment

rather than discussing spending as a whole. It can be run a one off process, but

long-term benefits such as social capital and ownership, require a reoccurring,

cyclical process. Participatory budgeting can deliver increased transparency and re-

establish the legitimacy of government budget decisions. It has also been shown to

build the skills and awareness of participants through the process of deliberation.

The ‘classic’ participatory budgeting model as developed in Brazil makes use of area

meetings where all citizens can attend and determine the spending of local budgets

(set based on population and poverty levels). Citizens also elect representatives to

attend larger city wide meetings where wider ranging priorities are determined.

Peer grant giving has also been carried out under the banner of participatory

budgeting. This allows a group of citizens the power to assign grants for community

projects and other spending.

E. EVALUATING THE BUDGET

Budget Evaluation refers to the final stage of the budget cycle when there is

an assessment of whether public resources have been used appropriately and

effectively. In order for this stage in the budget process, to actually support good
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State Universities and Colleges
Guimaras State College
Graduate School

governance and the effective and efficient use of public resources, assessments of

the budget implementation and its impact must include assessments by bodies that

are independent of the government and that have sufficient capacity and resources

to perform their task. Almost every country legally mandates the existence of an

entity to oversee public expenditures, often referred to as the supreme audit

institution (SAI) but also known as the National Audit General. Unfortunately, these

institutions often lack the requisite independence from the executive branch or the

resources and capacity to ensure adequate oversight. Civil Society Organizations

CSOs often can help to fill oversight gaps and support the SAI. Another critical role

for CSOs in the evaluation process is to use the findings from their analysis of audit

reports and other efforts to evaluate the impact of budgets to pressure the

legislature to follow up on audit recommendations.

CONCLUSIONS:

Good financial practice means managing money and money processes so

that the budget and the school’s strategic plan are aligned. Budgeting is an

important process that allows for some delegation of financial tasks and

responsibility within larger schools. Managing the educational budget includes the

management of its implementation. Once approved by the appropriate authority,

your budget becomes the basis for your financial decisions in the school. Within the

appropriation for various budget headings you are entitled to make commitments to

spend money. Each type of expenditure you make can be subject to particular
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State Universities and Colleges
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Graduate School

norms designed to guarantee that you follow the rules and good accounting

practices.

REFERRENCES:

Franco, Ernesto A. (2006), Educational Planning

www.scribd.com

www.educationalleaders.govt.nz/Managing-your-school/Guides-for-making-your-

schoo/Understanding-school-finances

www.scribd.com/doc/16060146/Participatory-Budgeting

www.openknowledge.worldbank.org/handle/10986/24747