Planning an annual budget for a charter school involves teamwork. The board, finance committee, and staff need to work together to ensure that all aspects of the organization and programming are taken into consideration. Each decision should be weighed against these factors: Financial stability, compliance with state regulations, and alignment with educational goals. Before you get started though, here's a list of items each team should consider:
Staff
- Project enrollment
- Discuss new programs and initiatives
- Outline next year’s fundraising plan (best, likely and worst-case scenario)
- Discuss general staff structure
Board
- Affirm projected enrollment number
- Estimate conservative fundraising amount
- Discuss allowable annual operating deficit prior to fundraising
- Discuss general guidelines and budget objectives
- Operating surplus
- Fixed versus variable costs
- Discuss parameters on which programs, if any, will be subsidized and which programs much break even or be profitable (afterschool, pre-k, etc.). Discuss the amount of allowable subsidy.
Finance Committee
- Project Revenue (excluding fundraising)
- Estimate deficit amount to be covered from fundraising
- Determine total allowable expenses
- Determine operating surplus
- Estimate Mandatory Expenses (outside of the control of staff)
- Reserves
- Capital expenditures
- Debt repayment
- New School Expansion
- Calculate an operating expense number
Staff
- Given the operating expense number, develop expense budget
- Provide detailed information for each program (after school, pre-k, etc.)
- Submit report to Finance committee
Finance Committee
- Perform 5 year projections using conservative assumptions and integrating information about likely new revenues or expenses (e.g. Spanish program)
- Perform sensitivity analysis
- Present to staff
- Present to Board
Careful planning, open collaboration, and transparency throughout the process are vital to ensuring the charter school's budget aligns with its mission and maintains financial sustainability.
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