Preparing A Budget

PART 5: PREPARING A BUDGET 1. Understanding Budget A budget is a plan of expenditure and income for a certain period of time over a period of one year. A budget is a written plan regarding the activities of an organization which is expressed quantitatively for a certain period of time and is generally expressed in units of money, but can also be expressed in units of goods/services. In the educational context, schools need a budget for the following reasons: a. Plan expenses and income for the next year. b. Considering resource needs from various elements, such as considering the School Development Plan which is commonly known as the School Development Plan (SPD) or School Improvement Plan (SIP). c. Determine priorities for allocating funds for each activity to be implemented. d. As a monitoring tool to ensure accountability. Any budget must be based on the activity plan as a benchmark. If the school has prepared a school development plan, annual plan, and school improvement plan, the school budget must cover these activities. However, in this context, the budget must be made as realistic as possible and as carefully as possible to avoid waste. 2. Steps in Preparing a Budget Preparing an annual budget is an inseparable part of the education improvement cycle. This is an important step in the process of planning and implementing a school improvement plan. Thus, annual budgeting must follow the School Development Plan (RPS), which is commonly known as the School Development Plan (SDP) or School Improvement Plan (SIP). Often the task of preparing the school's annual budget is usually entrusted to teachers. However, the teacher may not act and make your own decisions but must coordinate with various parties. Instead, as part of the overall planning process, all education stakeholders must assist in every stage of budget preparation. Once the School Development Plan (RPS) is available, the budgeting process involves the following steps: a. Identify expected income in the current period; b. Identify expenditure items to be proposed; c. Estimating costs and priorities for releasing goods; d. Prepare a draft budget; e. Submit the draft budget to the school finance committee for review before presentation; f. Present, discuss the draft budget, and make final revisions if necessary; g. Obtain written approval. h. Submit the Annual Budget for processing. 3. Income Planning Grant funds are usually released three times a year. When budgeting, preparers need to consider the division of expenditure between 4 (four) main expenditure categories, including: instructional materials, co-curricular activities, management and administration. Therefore, the first step in budgeting is to calculate the amount of budget that can be allocated to each category and consider how much needs to be allocated. This must be done before prioritizing expenses in each category. If anticipated expenses exceed a predetermined amount, then the school needs to plan to supplement that amount with fundraising. 4. Income from Leadership for the Budget A School Improvement Plan (or School Development Plan) will include specific activities aimed at improving education in the school. Therefore the Annual Budget needs to reflect the costs of these activities. In this case, it may be necessary to plan according to the authority and person responsible for each specific budgeting activity, in collaboration with relevant stakeholders. The following are the details of the activity costs: 1. Explanation of proposed activities 2. Details of expense items under that activity 3. Cost of each item and number of items required 4. Time when the expenditure occurs 5. Estimate total anticipated costs. Example: Katwe School prioritizes football development in its SIP, therefore the football teacher proposes budget funds for football development as follows. 5. Planning in Budget Expenditures When preparing the budget, the SMC needs to prioritize ‘need to have’ items over those that are ‘nice to have’. Finally, it is necessary to distribute these expenses throughout the year. Experience will tell you at what time each expense category will be charged. For some items expenses will be stable throughout the year, others will be concentrated in certain months 6. Budget Approval a. A budget is a plan of expenses and income for a certain period of time - usually a year. b. The budget is a tool for measuring accountability. 7. Summary of Important Points Any school budget must have broad support. This should be directly linked to the implementation of the agreed School Improvement Plan. Budget development and approval must be a transparent and consultative process. The resulting budget must be formally adopted on motion from the SMC. The budget must be signed by: a. Headmaster b. SMC Chairman c. SMC Treasurer d. District Education Officer e. Note: The UPE Grant budget preparation format is available in Appendix B c. A school's budget is the financial expression of its School Improvement Plan. d. Budgeting preparation and implementation should be appreciated as an integral part of e. annual cycle of School Improvement or Development Planning. f. A recognized set of steps must be followed during budget preparation. g. Stakeholders or leaders must be consulted properly in preparing the budget. h. When preparing a budget, one should not only consider the amount of income and i. expenditure but also time. j. The school budget must be approved by: the principal, SMC Chair, SMC Treasurer and District Education Officer.