Principal s Role in School Budget According to Continuous Improvement Plan

A t some point, every teacher will be responsible for part of their school's finances – from handling petty cash for a trip to explaining why you've overspent the departmental budget for a second term running.

But, if you aspire to join your school's senior leadership team (SLT), you're likely to be asked to take on an even greater role in monitoring school finances. We've put together a beginner's guide to budgeting, getting value for money, and explaining financial accountability.

1 Make your budget work for your school improvement plan

When taking over your school's budget, it's easy to get bogged down by the numbers, but don't just be driven by how your school has budgeted in the past. Think about what you would like to do if you had unlimited money, then look at how much you've actually got to spend and what you can achieve with it.

Your school budget should reflect your school improvement plan – set on a five-year basis, showing two years in retrospect, the current year, and the next two years' forecast.

Before setting up any new budget, you'll want to have handy:

  • Old budgets to look at past performance, so you can learn from under- and over-spends.
  • Pupil numbers (census, local authority and feeder school lists). Be aware that neighbouring schools changing their admissions policies could also impact your numbers.
  • Exam results, so you can identify which parts of the curriculum could benefit from more money, and which have previously.
  • Staffing requirements, including updated pay scales.
  • Other resource requirements – money needed for insurance, maintenance etc.

2 Understand the basic principles of school budgeting

The first thing you need to understand is the different funding streams by which the school receives its resources.

  • Delegated funding (eg the dedicated schools grant) usually has no strings attached to it.
  • Devolved funding comes with conditions on how the money can be spent. For example, you must be able to demonstrate how pupil premium money is benefiting target students and that devolved formula capital funding is only being spent on long-term assets.
  • Capital funding can only be used to improve a long-term asset (eg upgrading buildings or the school's technology network).
  • Revenue funding should be used within a year (on salaries, heating, stationery and routine repairs etc).

Look at what proportion of funding in last year's budget came from delegated funding, pupil premium, devolved formula capital funding and other sources. You need an idea of how school funding is affecting your budgeting, particularly as certain funds (eg pupil premium) are vulnerable to change.

Graph showing dummy numbers

Accountability is also crucial in budgeting. You must be able to demonstrate how state funds have helped student attainment. Any private funding you get, however – such as charitable donations, renting out the school hall etc – can be kept in a separate account although it's still good to be transparent with this.

Now you know where your funding is coming from, create a budgeting calendar and plan ahead for all scenarios. In most cases, you'll have to set a budget from April-March in line with your local authority's (LA) financial year, rather than based on the academic year. Don't be thrown by this, but be prepared to change in September as pupil and staff numbers change. What would you do if next year the school's roll rose or fell by 10%?

It's good practice to monitor and review your budget monthly. Put dates in your diary for when to file budget reports to different bodies (eg the governors, the LA, Ofsted and the Department for Education (DfE)) as formats and dates will vary.

An example of how to draw up a budget reporting spreadsheet to show month-by-month spending is below. For each item budgeted, you'll want to show projected and actual expenditure to date, and to make rogue figures easier to spot it helps to show these as percentages too.

Teacher finance tips charts Google Sheets
While you don't want to end up in the red and it's good to plan contingency funding. Photograph: Rachel Banning-Lover/Guardian

Between January and March, you'll want to start forecasting next year's budget, while reviewing the current budget to identify areas where money could be moved to other resources in future.

The end goal? That proposed expenditure does not exceed proposed income. While you don't want to end up in the red and it's good to plan contingency funding, avoid having large surpluses at the end of the year as the LA can claw these back. Academies are allowed to retain unspent funds as operational reserves.

3 Get value for money when procuring resources

In the age of austerity, getting the best value for money (VfM) has never been so important. The DfE's benchmarking system is a useful resource for school budgeters as you can see how much neighbouring schools spend on resources such as classroom assistants, catering, building maintenance and so on. It doesn't show you why differences occur, however, so it's important to read between the lines.

You can also benchmark costs on a smaller scale. Try carrying out your own comparisons on a pack of exercise books – what's the cheapest you can get these on the internet, the high street, from a school supplies catalogue, or elsewhere?

Graph showing dummy numbers

You could also join other schools to have greater purchasing power, or see if there's a local public sector buying organisation you can connect with.

Buying in bulk might sound like a good idea but calculate risk versus value; annual contracts mean you're stuck with one price, whereas day-to-day purchasing allows you to shop around regularly. Leasing equipment is another option, but has risks.

It can be useful to identify whether past purchases provided VfM to guide future spending. Ask your colleagues about the best and worst things your school has purchased in the last few years and why. Was the extra classroom assistant a better investment than the interactive whiteboard?

For a more formal way of assessing VfM, consider economy, efficiency and effectiveness. Were you able to get the best quality for the lowest cost? Where you did spend more money, did you have improved results? The whole point of VfM is to free up money for other resources in your school improvement plan.

4 Be confident demonstrating VfM

Now you've got to break down the school budget for the governors. Come with easy-to-understand, clear budget reporting sheets and be prepared to explain any holes with recommendations for avoiding them in future. For example, if you overspent on building maintenance this year, you could suggest implementing more regular building checks to spot problem areas or negotiating better terms with your insurers and maintenance providers.

It's also important to highlight the areas where you got the best VfM. Tell them how you spent less money than a neighbouring school on catering as you phoned up colleagues at another school, and agreed to partner with them and a third school for greater purchasing power.

Next, make a business case for the areas where you think the school should direct the money it has saved. Show how increasing the number of teaching assistants for year 9 has boosted results, so it would make sense to spend more money on them for year 7 to help students progress earlier and save money further up the school.

Perhaps you're not the one who has to account for the school's expenditures to the governors, but you're the head of the English department, and want to ask for more funding for GCSE students. The same principles apply. Show the SLT how increasing/decreasing your budget has affected your students' results in the last few years. Also, look to other schools – what changes did that neighbouring school, who turned their A*–C pass rate around from 58% to 82% in two years, make? Make the business case for your proposed changes (and bonus points if you can identify where the money will come from so the school's business manager doesn't have to).

5 Help other teachers understand financial accountability

Finally, it's easy for most teachers to think they don't need to worry about the school's finances unless they're in senior leadership, but sooner or later they'll be coming to you for the petty cash.

The best way to explain the importance of financial accountability to your colleagues is by using real life scenarios. Get your colleagues together at the start of the year for a short Q&A session on the school finances. This will make you look approachable and the school finances transparent; it will also give you a chance to gauge their financial knowledge. Ask them what trips they want to plan this year and walk them through the steps they must take:

  • Have they costed the trip properly?
  • Included hidden costs and a small contingency fund?
  • How much will they need to charge parents?
  • Did they know they must bring back VAT receipts as these can be used to offset the school's tax bill?

You could also ask teachers who've managed departmental, trip or event budgets to share their experiences and lessons learned. What did they find most challenging? Was there anything they would have liked more information on that you can now provide?

Further resources

  • The National College for Teaching and Leadership's (NCTL) module on managing school finances.
  • DfE's schools and colleges funding and finance.
  • Maintained Schools Financial Benchmarking website.
  • Academies Financial Benchmarking website.
  • DfE School Development Plan budgeting tool.
  • 10 ways to help your school manage its budget (NCTL).
  • DfE Pupil Premium funding and accountability for schools.
  • DfE Schools financial efficiency: top 10 planning checks for governors.

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Source: https://www.theguardian.com/teacher-network/2016/jun/19/beginners-guide-planning-managing-school-budgets

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