BUDGETENG EN A. PUBLEC $68002. SYSTEM

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MECHEGAN STATE UNW
Sara Jean Me Nut?
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Michigan State
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BUDGETING IN A PUBLIC SCHOOL SYSTEM

By

Sara Jean McNutt

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF ARTS

])epartumnt of Accounting and Financial Administration

1961

INTRODUCTION

The school district budget is one of the most important
parts of administrative planning. The budget is no longer
being viewed as a list of probable expenditures and estimated
receipts. Instead it is looked upon as a keystone in the
transformation of a set of educational aims and objectives
into an actual program of instruction.

Many problems are involved in budget development. Aims
and objectives must be converted into personnel and supply
requirements; enrollments must be anticipated and projected;
economic trends must be considered; and the feeling of "tax
consciousness" at the local level must be placed in its
proper perpective.

Education plays a vital role in our ever changing
society. The constant growth in population and compulsory
education has had an important bearing on local school prob-
lems. The budget is a tool through which good management
can strive to attain the most efficient use for the resources
available.

In many instances, public school budgeting resembles
industrial budgeting. Both require estimating income and
expenditures, establishing a line of responsibility, partici-
Pating in budget preparation, developing a policy for capital

outlays and replacements, etc. However, public schools

 

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cannot cut production when expenditures exceed income. They
cannot lay- ff a portion of their personnel or switch to a
different line of production.

The problems involved will vary from district to dis-
trict--depending on size, locality, standard of living, etc.
The community must be educated as to the existing problems
and should be given a chance to participate in making the
budget.

It is the purpose of this project to present a general
overview of the plans and techniques involved in public
school budgeting; discuss problems and procedures employed
by specific school systems--one district being outlined
rather completely; point out the influence of legal require-
ments; and present the need for uniform laws relating to
budgeting, accounting, and auditing in the public schools.

References will be made to Oak Park District Schools,
Oak Park 37, Michigan (outlined in detail); Ferndale City
Schools, Ferndale 20, Michigan; and Utica Community Schools,
Utica, Michigan. The latter is one of several schools in
the State experimenting with the accounting system advocated
for public school use by the Federal Government. This sys-
tem attempts to present a uniform classification of accounts
for all schools in the United States.

The writer is especially indebted to Professors Lemke,
Lawrence, and Ruswinckel for their helpful suggestions in

writing this manuscript. Grateful acknowledgment is also

given to Dr. Arthur Matthews, Principal, Oak Park Senior
High School and William Jelneck, Business Manager, Utica

Community Schools.

TABLE OF CONTENTS

CHAPTER PAGE
I. PROBLItS AND PROCEDURES OF PUBLIC SCHOOL

BUDGsllnG. . . . . . . . . . . . . . . . . . . . . 1

School Budgets, , . . . . . . . . . . . . . . . 1

Criteria for Establishing a Budget. . . . . . . 8

DeveIOping a Basis for Formulating the Budget . 12

II. BSTIMATINP BXPBNDITURBS--SPENDING PLAN . . . . . . 26

Affect of Legal Provisions. . . . . . . . . . . 26
Procedures in Estimating. . . . . . . . . . . , 28
Accounting Records. . . . . . . . . . . . . . . 53

III. ESTIMATING RBVBNUBS——FINANCING PLAN. . . . . . . . 59
Non-Revenue Receipts. . . . . . . . . . . . . . 65

Funds Available from Previous Years . . . . . . 66

IV. PRESENTATION AND ADOPTION OF THE BUDGET. . . . . . 71

Integration of Educational, Financial, and
Spending Plans . . . . . . . . . . . . . . . 71

Presentation to Board of Education. . . . . . . 73

Adoption By the Board and Certification to
the Tax Officials of Monies Needed . . . . . 76

V. ADMINISTRATION AND APPRAISAL OF PUBLIC SCHOOL
BUDGETS. O O O O O O O O O O O I O O O O O I O O O 81

Transferring the Budget to the Accounting
Records. 0 O O O O O O 0 O I O O O O O 0 O O 81

Budget Appraisal. . . . . . . . . . . . . . . . 83

CHAPTER PAGE
VI. SUMMARY AND CONCLUSIONS. . . . . . . . . . . . . . 99
Summary . . . . . . . . . . . . . . . . . . . . 99
Conclusions . . . . . . . . . . . . . . . . . . lOl
BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . 102
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . 105

CHAPTER I
PROBLEMS AND PROCEDURES OF PUBLIC SCHOOL BUDGETING

The school budget has social as well as economic impli-
cations. Education offers a type of insurance to the commu-
:nity, state and nation as to the future of America.

Budgeting plays an important role in assuring the
greatest educational return from every local tax and state
aid.dollar. we shall begin with attempting to arrive at a
definition of a budget and its component parts.

I. THE BUDGET

Most people think and refer to a budget as being a sys-
tematized statement which forecasts probable expenditures
and anticipated revenues during a specific time period.
IHowever, a school budget has more important implications
'than enumerating expenditures and revenues. The budget
is seen eel--

l. Indicating to the people of the school district

what it costs in dollars and cents to offer a

particular type of educational program.

2. Protecting the continuance of this educa-
tional program for a specific period of time.

3. Providing information on the educational activi-
ties for which public funds are being expended.

4. Indicating where and when changes in the current
operation must be made to realize specific
objectives.

 

1New York State Education Department, Bureau of Field
ZFinancial Services, Bud et, (New York: The University of
'the State of New YOrE, I956), p. 15.

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5. Serving as a means of financial control.

6. Providing the board of education with the autho-
rity to make expenditures within a pattern estab-
lished by a predetermined educational program.

7. Serving as a basis for determining the amount
of revenue which must be obtained from local
taxation.

The ideal school budget is defined as a complete finan-

cial forecast of both expenditures and receipts, based on an
educational plan. It takes into consideration past experi-

ence, present conditions and future needs.2

". . . Budgetary
procedure should be such that the resulting budget expiésses
the amount the community is willing to spend in the light of
the educational program it wishes to buy."3 Thus, it becomes
necessary to determine an educational philosophy--aims and
objectives. At this point them it might be concluded that
the ideal school budget consists of three parts: (1) the
work plan, (2) the spending plan, and (4) the financing plan.
The three parts are very closely integrated and may be sym-

bolized by an equilateral triangle with the educational or‘

  
  

work plan forming the base.

  

EDUCATIONAL

 

2Chris A. DeYoung, Bud etin in Public Schools, (New
York: Doubleday, Doran ompany,—Inc., I§367, p. 8.

3Paul R. Mort and Walter C. Reusser, Public School
Finance, (New‘York: McGraw-Hill Book Company, Inc., I951),
p. 1660

4DeYoung, gp. cit., p. 7.

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The work plan should show the organization for the en-
suing year, number of pupils to be accommodated, the number
and kind of personnel to be employed and the duties of each.

The educational program is usually classified according
to type of school organization-~elementary, junior high,
senior high. The program must have the wholehearted support‘
of the community, since it furnishes a considerable portion
of the funds. It is recommended that the educational plan
include (I) the major objectives of the program of education
offered; (2) the manner in which the budget undertakes to
fulfill these expectations; (3) the new services, or changes
in the present organization, that are being added or under-
taken this year to carry out the educational objectives;

(4) the limitations to attaining stated goals due to the
economic inability to supply all desirable appropriations;
and (5) other factors taken into consideration by the
administration.

The spending plan is based on the educational plan and
proposes expenditures with full consideration toward scund
procedures and financial control. The expenditure plan
should (1) be based upon some method for classifying the
expenditures according to ”character,” organizational units,
object, or function; (2) reveal actual expenditures for
prior periods; (3) present variable estimates for some items;
(4) refer to supporting data; (5) present an analysis of
costs; (6) make comparisons with other districts, if it is

appropriate; (7) present a brief description of services

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included under general classifications; (8) contain a justi-
fication for balances carried from year to year.5

In theory the educational program determines the expendi-
tures, which in turn enables the calculation of necessary
receipts. However, in most instances, receipts have a very
important bearing on the other two parts of the budget. The
social intelligence of the taxpayer, his willingness and his
ability to pay must be considered in revenue calculations.
Valuations, stability of state funds, and the ratio of in-
creasing enrollments and expenditures to anticipated revenues
also emphasize the need for careful budgeting. The main
sources of income to schools are through (1) state aid; (2)
state primary fund; (3) Federal aid; (4) tuition receipts--
summer school, nonresident, adult education; (5) tax collec-
tions; (6) interest on delinquent taxes; (7) state penal fines
collected; (8) short term loans; (9) rentals; (10) opening
cash balances; and (11) sale of prOperty.

The complete and accurate evaluation of receipts, when
accompanied by an official resolution to the tax-raising body,
becomes the basis for supporting the estimated expenditures
necessary to achieve the educational program that has been
adOpted. The three component parts of the budget will be
discussed in detail in succeeding chapters.

Once an institution has adopted an educational program

and develOped an educational philosophy, the budget should

5New York State Education Department, on. cit., pp. 30-31.

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provide the ways and means for achieving the objectives
and policies that have been established.

The budget is really a financial implementation of the
educational objectives that have been developed and accepted
by the district. It must be carefully organized and antici-
pated in the same fashion as the school prOgram. A long
range view of monetary needs, as well as specific allocations
for the current year, is imperative.6

From the foregoing paragraph, we might state that school
budgets are of two types: (1) annual and (2) long-term.

The annual budget is derived in part from the long-term
financial plan. Estimates are more exacting and attention
is focused on the amounts to be allocated to specific items.

Certain eXpenditure requirements are fixed for the
short term and are not susceptible to change, such as.pay-
ments of interest and amortization of bonds that are to
mature, salary increments guaranteed according to schedule,
and employer contributions to the retirement system. Other
items are controllable within certain limits, such as lights,
water, fuel and certain supplies. In the long range plan
none of the above items would be fixed.

Some policies that might aid the control of annual
budget expenditures are those relating to decorating, re-
placement of equipment, and textbook changes. For example,
it may be the policy of a certain board to replace a specific

number of typewriters in the business department each year

61bid., p. 26.

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to avoid the large expenditure necessary for the complete
turnover of machines in any one fiscal period. The philosophy
adopted by the Board also has a bearing on the approval of
expenditures. For instance, if a Board believes in training
a youngster to earn a living after graduation, they might
appropriate money for a cooperative program and a business
machines course. However, if they believe that high school
is for the purpose of orientation into the various fields
and that special training belongs in an institution of
higher learning, the expenditure would probably not be
approved.

Long-range budgeting is more susceptible to error, but
still can be estimated fairly accurately. Budget revisions
should be made as the need arises. Some influencing factors
might be local conditions, changes in objectives, and changes
in legal requirements.

In order to estimate expenditures with a reasonable
degree of accuracy, enrollments must be projected for at
least five years. Future enrollments are then projected
into staff requirements, instructional supplies, equipment
and etc. Special services and teacher-pupil ratios must also
be evaluated.

The salary schedule and anticipated revisions must be
considered in projecting costs. Increments, resignations,
and the hiring of new personnel have a definite effect on

future apprOpriations.

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A statement of district indebtedness and the schedule
of interest and redemption charges as they become due,
insurance as adjusted for coverage of new property and
changing economic conditions, and contributions to employee
retirement plans must also be considered. Planned policies
regarding maintenance and replacement help maintain the
educational program and control the budget.

On the receipts side of the budget, the revenue from
the local taxes on real estate are the main source of revenue.
Three important factors are the assessable tax rate, the
current tax rate, and theeconomic outlook for the community.
Estimates in state aid are projected on the basis of current
legislation and formulas, using the average three year
enrollment figure as a basis. This figure is only used
however, in planning long-range estimates. In Michigan,
the actual amount received from state aid is based on the
initial enrollment in September. The three-year average
used in computing estimates is designed to stabilize revenue
in periods of recession and low enrollments.

Non-resident tuition receipts are somewhat unpredictable,
especially where alternate districts are available to the
sending district or where reorganization is likely. "Miscel-
laneous revenues" are also rather difficult to project into
the future.

Unless both types of budgets-short and long-term, are
included in the financial plan, neither will be effective.

AS a matter of fact, the long range plan is accomplished

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through the medium of annual budgets. Long-term budgeting

is universally practiced in one form or another, and is not
unique to school budgeting. The student considers the cost
of his education and the possible returns from his chosen
vocation. Parents buy bonds or purchase endowment insurance
policies to provide for the high education of their children.
This all involves long-range planning of one form or another.
In all cases the current resources are utilized and directed

toward achieving desired plans and goals.
II. CRITERIA FOR ESTABLISHING A BUDGET

In 1957, Vosecky made a comprehensive study of school
budgetary procedures during the past thirty-five years. He

summarizes the following principles for appraising school

budgetary practices.7

1. Preparation of the budget document is the respon-
sibility of the superintendent.

2. The budget document should be the result of the
c00perative efforts of all who are concerned
with the educational needs of the children and
youth.

3. Budget preparation should be a continuous pro-
cess--the annual budget being a part of a long-
range program.

4. The initial step in the preparation of the school.
budget should be the formulation of a definite
educational plan.

5. The second step should be the spending plan,
which is a translation of the educational plan
into estimated costs.

 

7
Roe L. Johns and Edgar L. Morphet, Financin the Public
M13, (New Jersey: Prentice-Hall, Inc., l§65), p. 3 .

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6. The final step is preparing the financing plan.

7. The responsibility of presenting and interpret-
ing the budget rests with the superintendent.

8. Ample time should be allowed for reviewing and
analyzing the budget before adoption. The budget
should be approved before the beginning of the
fiscal period over which it is to serve. ‘

9. The budget should be accurately and carefully
recorded in the official minutes of the body
adopting it.

10. Administration of the budget is the responsibility
of the superintendent.

11. There should be continuous appraisal of the budget
and budgetary procedures.

The Oak Park District School budget specifically states
that their budget has been cooperatively developed with the
total staff keeping in mind the following principles:

1. The educational budget should be based upon both
needs and the ability to pay. Although balance
should be the key objective, primary emphasis
should be given to need rather than to dollars
alone.

2. Budget considerations should start with an appraisal
of existing educationaI conditions or a committ-
ment for the improvement over a period of years.

It should not startVWitE an assumption of what
the community can afford or is willing to pay.

3. The Oak Park financial plan should provide a pro-
gram for achieving the written educational objec-
tives and policies of the Board of Education and
administration. It should not be viewed strictly
as a listing of receipts and expenditures and a
statement of tax requirements.

4. The budget should provide a guide for satisfying
future needs of both the staff and community.

5. The spending program designed to achieve the edu-
cational program should be a wise one based upon
sound procedures and financial control.

They further state that their budget is a financial

.interpretation of their educational program. If used wisely,

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the budget can be employed as a means of helping citizens to
understand what a good educational system can do for them,
for their children, and their way of life. It can be used
to show how the educational dollar is spent, the educational
returns, and the dollars needed to purchase the kind of edu-
cational program essential to scientific life.8

The limitations of the school budget are somewhat simi-
lar to that of an industrial concern. The budget is just as
effective as the executive or administrator makes it. The
execution of the budget plan will not occur automatically.
It will be effective only if the responsible administrators
get behind it and exert continuous effort toward its accom-
plishment. Budgeting is a tool of management and cannot
take the place of administration. At the time of presenta-
tion to the board by the superintendent, the budget might
be thought of as a plan of attack. Once it is adopted, it
becomes the basis for achieving the educational objectives
through future financial acts. It is based on estimates and
its usefulness should not be underestimated because of the.
failure of many educational institutions to use it wisely.
The board should be informed monthly as to the relation of
.its financial condition to the budget. This should serve
as a basis for approval of budgetary amendments or further

exxmnditures. The budget cannot be substituted for a good

 

8Dr. James N. Pepper, Superintendent, Oak Park District
Schools, Oak Park 37, Michigan, School Budget 1260-6 .

eta;

8105

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administration and should not be followed blindly. The
budget may be regarded as the means and budgetary control
the end.

One of the important functions of a budget is that it
acts as a facilitating device in educating students. The
budget should be regarded as a servant, not a master. It
provides the means for accomplishing previously determined
objectives. The budget, if used intelligently, ascertains
that all possible attainable benefits are derived from the
plan as rendered.

The budget presents an overview of the entire educational
program and shows the relationship of each part to the total
program. It shows estimated receipts, presents a basis for
authorizing expenditures, and serves as a device for improv-
ing accounting procedures.

The preparation of annual estimates permits a critical
evaluation of new activities and a careful scrutiny of exten-
sions of old activities.

Probably one of the most important functions of the
budget is the promotion of c00peration within the school.
members of the teaching staff, business personnel, and admin-
istration must work together in compiling their budgets and
developing standards and specifications for supplies and
equipment.

A well planned and detailed budget can also be very
.forceful in convincing taxpayers and approving agencies that

a 8Pacific school tax represents actual needs.

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One of the by-products of budgeting may be standardiza-
tion of supplies and the use of bids in purchasing. This
aids the school in securing more value for each dollar ex-
pended and facilitates the development of economy and
efficiency.

Extensive forecasting involved in budget preparation
makes it necessary to project the school into the future.
Building programs, a repairs and replacement system, and
other educational facilities must be provided for over a

period of years.

III. DEVELOPING A BASIS FOR FORMULATING THE BUDGET

Proper organization and policy formulation are prereq-
uisites to successful budgeting. The scope of responsibility
and authority delegated to each individual and group and their
interrelationship should be clearly defined. This is necessary
to prevent duplication of efforts, inefficiency, and confusion
in the attempt to achieve the predetermined objectives.

Plans are made and then a course of action is developed
as a means of achieving the objectives that have been chosen.
The educational program presents the course of action for the
ensuing year and should coincide with the long-range educa-
tional plans of the community. The parents, patrons, teachers,
pupils, school board members, and administrators must attempt

to determine the: (l) purpose of education; (2) special

community needs; (3) type of school organization to be sup-

Ported; (4) qualifications of teachers; (5) salary schedules;

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(6) teacher-pupil ratio; (7) in-service training require-
ments; (8) policy regarding extra-curricula activities;
(9) policy relating to furnishing textbooks, supplies and
materials to students; and (10) type of plant construction.9

The policy regarding the teachers' salary schedule plays
a very important role in the budget. Once a salary schedule
is adopted and the number of teachers at each level is deter-
mined, it becomes an expenditure estimate. The philosophy of
the local community involved has a tremendous influence of the
type of salary schedule proposed. For instance, if a system
is interested in maintaining an experienced staff, special
provisions will undoubtedly be made to attract such people to
their system. Provisions for special training in certain areas
and methods of stimulating professional growth will also have
a definite affect on the proposed expenditure for teachers'
salaries.

By studying the following salary schedule from Oak Park
District Schools, Oak Park 37, Michigan, one can rather clearly
determine their philosophy relating to the qualifications de-
sired and promoted within their system.

 

 

 

lgars of Experience Bachelor Degree Master's Degree
Beginning
0 34.500 $5.000
1 4:750 5:250
2 5,000 5,500

 

9
T. H. Briggs, Secondar Education, (New York: The
Macmillan Company, E33), pp. I9f3-E5l.

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Years of Experience Bachelor Degree Master's Degree
Advancing
3 5,300 5,800
4 5,600 6,100
5 5,900 6,400
Career
6 6,300 6,800
7 6,700 7,200
8 7,100 7,600
9 7,500 ‘ 8,000

An additional five percent will be allowed upon com-
pletion of thirty hours of college credit beyond the master
degree on a planned program approved by the superintendent
or upon the completion of all requirements for a specialist
degree, and an additional five percent will be allowed upon
completion of all requirements for the doctorate degree. A
maximum of ten percent will be allowed for training beyond
the master degree.

The daily rate for substitute teachers shall be as
follows: (1) non-degree $18 per day, (2) degree 822 per
day. All substitute teachers must be properly certified
prior to employment according to Michigan Certification
standards.

Special education teachers whose positions are reim-
bursable in whole or in part from state funds shall receive

one additional increment on the teachers' salary schedule.

The compensation for visiting teachers and diagnosti-

cians shall be set at two additional increments on the

schedule. Nurses follow the regular salary schedule.10

10Revised Teachers' Manual, Oak Park District Schools,
1960-61, P0 180

 

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The number of extra-curricular activities supported by
a school has a definite bearing on expenditures. Many sys-
tems provide for extra compensation for special programs.
Oak Park stipulates that eligible programs shall be those
which require knowledge, training, experience and leader-
ship that may or may not relate to the teaching assignment.
Their schedule provides for the following additional com-
pensation:

High School Head Coach

Football 3500
Basketball 500
Baseball 500
Track 300
Cross Country 300
Tennis 300
Golf 300
Wrestling 300

Assistant Coach

Major Sports 300
Minor Sports 150

Jr. High School Coaches - Each Sport 300
Jr. High Ass't. Coaches - Each Sport 150

.High School Band Director 500

The educational program must clearly define the type
of organization that the budget is supporting--6,3,3; 6,2,4;
8,4. These numbering systems refer to the number of grades
in elementary, junior and senior high schools respectively.
~Even though a school system has one type of organization at
the present time, doesn't mean that another type would not
be more beneficial. For instance, Oak Park District Schools
is currently operating under a 6,2,4 plan. However, since

they have recently acquired the Carver District and their

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own enrollments are increasing, consideration is being
given to a 6,3,3 plan. This would relieve some pressure
on the senior high school, since a new junior high building
was just Opened in January 1961.

The organizational chart for Oak Park District Schools

is shown on the following page.11

The line of responsibility
and the function of the various administrators and committees
are clearly indicated.

Definite policies relating to the responsibility of
each individual and group connected with the school must be
clearly determined before an adequate budget program can be
formulated. This prevents the duplication of efforts and
promotes cooperation within the organization. Everyone must
assume their specific responsibility and work together in
order to accomplish the desired objectives.

The educational objectives of Oak Park District Schools
12

as adopted on January 7, 1960 are:

A. The school shall assume the responsibility for material
resources and teaching skills.

1. To provide an equal opportunity for every child to
grow to the limits of his capacities.

(a) By measuring his capacities with an adequate
testing program and professional observation.

(b) By maintaining cumulative records containing
test results, special abilities or disabili-
ties, readily accessible to the classroom
teacher.

 

ll .
Ado ted Policies and Re orts of the Board of Education
and Staff Irom.I§EZ:ZEE§, (MicEIgan:__OEE_Park Board of
EEEcatIon, p. 5.

lzIbido, pp. 4b-400

 

 

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By providing an adequate reporting program

Of student achievement tO parents through (1)
conferences and (2) report cards where marks
are a record of the relationship of a child's
achievement to his ability, and to the ability
Of other children as he progresses beyond the
elementary school.

By organizing an adequate guidance program.

By limiting the class size to numbers which
permit optimum learning and warm human
relations.

By every teacher assuming the responsibility
for meeting the needs of children not deviating
more than two grades from the normal.

By providing for teachers with special skills
to work with children above and below these
levels.

By using subject specialists to assist the
classroom teacher in an advisory capacity
and by direct instruction.

2. TO provide an Opportunity for every child to learn
to become a responsible member of democratic group
life (political, economic, and social).

(a)

(b)

By using democratic methods throughout the school
adapted to the maturity Of children and the
efficient functioning Of the school, (1) by
including teacher-pupil planning, and (2) by
maintaining an orderly and well-planned school
situation where security encourages self-
discipline.

By providing equipment and organization that
make the best democratic processes Operate
easily.

The school shall assume the responsibility for providing
an Opportunity for every child to become an effective
person by mastering the following:

1. The skills Of communication--reading, writing,
speaking, and listening--to adequately express
himself and tO enjoy his cultural heritage.

2. The concepts Of numbers adequate to his needs.

(a)

By providing concrete materials adequate to
teach functional concepts in sequential order.

‘

P)

5.

(b)

The
(a)

(b)

(e)
The
(a)
(b)
(C)

-19-

By developing mathematical processes inductively
and deductively.

habits Of health of mind and body.

By providing a mentally healthy classroom
atmosphere.

By understanding the structure and functioning
Of the human body.

By placing emphasis on moral values.
methods Of science.

By develOping inquiring minds.

By teaching the skills Of problem solving.

By teaching current scientific facts and
concepts.

Skills that are conducive to aesthetic appreciation
Of the fine arts and practical arts.

The school shall assume the responsibility for stimulation
of thinking and performing creatively.

The school shall assume the responsibility for a curricu-
lum that:

l.

2.

3.

Gives continuity, sequence, and integration to learn-
ing experiences.

Is balanced, reviewed and revised periodically, and

not pressured by tradition or the emotions Of the
moment.

Stimulates continuous learning through life.

The school shall assume the responsibility for leadership
among the educational influences in the community.

The philOSOphy followed by the board Of education will

have a direct affect on the program Offered by the school

and, as a consequence, on the budget. If a progressive

philosophy is supported by the school and community, pro-

visions may be found for the development Of special abilities,

interests,

or talents. Many schools now Offer courses which

.PU

3.3.5 "us. no.

-29-
qualify the student for advanced placement in college. These
courses will be found only in schools which believe in devel-
Oping the abilities Of the student to the highest degree and
who can financially support the additional teachers and equip-
ment necessary. If the philosophy clearly provides for the
education Of students of all abilities, provisions should not
only be made for the normal and superior student, but also
for the mentally deficient. Special education courses require
a special teacher and a special program. The teacher-pupil
ratio involved is very small and would definitely have a
direct affect on the budget.

Oak Park's philosophy Of education specifically refers

13 Citizens'

to cooperation between the community and school.
Committee Meetings, hearings, and various discussion groups
interested in phases of the educational program are Often
invited to present their prOposals to the Board. This has a
psychological reason--if people are involved in developing a
program they will be more willing tO live with it and to help
support it financially. Gallagher's study Of voluntary groups
indicates that there is a close relationship between the num-
ber Of voluntary groups in the community known to the school

principals and the quality Of education provided.14

 

l3Ibid., p. 1.

14Ralph P. Gallagher, Some Relationships pf Symbiotic
Groups|32 Ada tabilit igyPuSIic Sc 00 3 Egg 33 Other Re ated
Factors, manuscript, (Teachers COlIege Library, COIumbIa
UnIversity, 1949).

‘\

_ -21-

Oak Park District Schools' official philosophy
cation and other general and Operational principles
a bearing on the educational program and budget are
follows:

I. Introduction
Education is a OOOperative process - it goes on
school, home and community. It is a continuous
that does not cease with the completion Of high

or college requirements. The public school has

Of edu-
having

8.8

in the
process
school

the re-

sponsibility tO OOOperate with all agents and resources

Of the community in its program and to do what is nec-

essary to help create favorable school, home and commu-

nity attitudes.

II. Purposes

A. Preparation of children and youth for social re-

sponsibility, family life, effective communication,

appreciation Of the arts, ethical insight and skills,

habits and attitudes.

B. Relating instruction in a more meaningful manner to

the democratic way Of life.

C. Provision for special interests, abilities and defi-

ciencies of the individual student.

III. General Personnel and Operational Principles

A. The Board Of Education hereby gives recognition and

approval to the following statements Of policy:

1. The duties and responsibilities Of all person-
nel should be properly defined and Officially

adapted in written form.

5.

9.

-22..

Teachers shall have the right to (a) seek and
use new and improved methods of instruction,
(b) lead private lives according to personal
standards provided they are not in conflict
with community expectations as a teacher.

Teachers have a responsibility to exercise a
leadership role in the community and have pro-
fessional obligations to take part in the acti-
vities of professional and community groups.

Change is inevitable, but change must come gradu-
ally after adequate study, and not because spe-
cial interests dictate it.

Efforts should be made to involve, as nearly

as possible, all parties who are directly
affected by the school program in planning
instructional and other school programs. Study
committees composed of school administrators,
teachers, parents and other lay persons will

be recognized as needed. Committees charged
with the responsibilities of studying problems
involving Board policies must have the approval
of the Board of Education, through the super-
intendent, to be recognized. Lay committees not
involving Board policies must have the approval
of the official representative of the Board.

All channels of communication must be kept
open. School administrators and teachers
shall have the right to study and debate
school policy in accordance with recognized
professional and ethical standards. Pro-
fessional and lay personnel may petition the
Board through its superintendent to pursue
independent study for the purpose of making
recommendations.

Orientation programs are needed to help the
new teacher get a good start and to help her
to understand her obligations and opportunities.

Supervisory service is needed to give intelli-
gent help to classroom teachers in discovering
and solving their problems and improve their
teaching through 000perative planning and
action.

Effort should be made to provide for classroom
conditions suitable for good instruction, ade-
quate lighting, reasonable class size and free-
dom from unnecessary interruptions.

1'

B.

10.

ll.

12.

13.

14.

-23-

Instructional supplies should be available in
adequate amounts with adequate consideration
given to the type of experience to be given to
children. Teachers should help in the selection
of these materials.

Parents and the general public should be kept
continuously informed of the school program,
its needs and problems.

Pupil evaluation and promotional procedures
should be clearly defined. Methods and pro-
cedures used by the school should be mutually
understood by parents, teachers and pupils.

Parent-teacher conferences in the guidance of
children are essential. Worthwhile conferences
require co-operative planning of teachers, parents
and administrators.

A continuous program of in-service training

of teachers planned and operated cooperatively
by professional personnel is necessary. Con-
ference attendance and workshops, particularly,
are recognized as important features of the
program.

We affirm, further, the following operational principles

which are applied in Board of Education-Professional

Staff relationships (Adopted January 7, 1960):

l.

3.

Status changes of members of the professional staff
are made only upon the advice of administrators to
whom this responsibility is delegated.

The responsibility for evaluation of staff members,
educational programs, and teaching methods is dele-
gated to administration through the superintendent.

The evaluation of educational programs is based upon
study by the professional staff, the objective evi-
dence provided by the testing program, and the cri-
teria developed by educational authorities through
recognized, valid research.

The responsibility for the recommendation of in-
structional policies and programs is delegated to
the administration through the superintendent.

The Board of Education formulates policies per-
taining to instruction only after full consultation
with the professional staff.

_-24-

5. The Board of Education, in keeping with its dele-
gated powers, formulates policies but charges the
administration with the authority to implement
those policies. Direct application of policy is
carefully avoided by the Board of Education.

6. The Board of Education encourages full and free
expression on the part of the professional staff
of ideas and convictions in the area of education
and community affairs. As an important aspect of
this right, however, is the obligation of the
individual to act in a responsible manner and to
assume full responsibility for his actions.

7. Educational experimentation is likewise encouraged
with responsible consideration.

8. In all relationships with individual members of the
staff, full consideration will be given to rights,
the personality, and the professional reputation
of the individual. Due process procedures will be
followed completely and consistently.

The duties of each administrator, assistant, custodian,
and all other employees are clearly defined in a manual to
provide for clear delegation of responsibility and avoid
duplication of efforts. This, of course, is one of the
prerequisites of a good budget program.

The educational program serves as a basis for the ex-
penditure and financing programs. It corresponds to the
specifications of a building--refleoting the philos0phy and
policies of education in the community. If it is to be use-
ful in preparing the budget, it must be specific enough in
details that essentials can be selected that reflect the edu-
cational plan adOpted. It should include specific informa-

tion on these questions.15

 

15Johns and Morphet, op. cit., pp. 402-403.

Um

7.
8.

10.
11.

12.
13.

14.
15.

16.

-25-

Who should be educated? That is, will educational
opportunities be limited to grades 1 to 12, or
should the program include kindergarten, a junior
college, and adult education opportunities?

What will be the probable enrollment in each age
group or school program during the next five to
ten years?

What additional sites, buildings, equipment and
personnel will be needed during the next five
to ten years?

For how many days during the year should the schools
be kept open?

Should sufficient schools be employed to operate.
the schools during the summer months for enrich-
ment and recreational purposes?

Should the school plants be planned to serve com—
munity purposes as well as the regularly organized
school program?

What should be the pupil load per teacher?

What level of qualifications should be possessed
by teachers?

What provisions should be made for exceptional
children?

What provisions should be made for clinical and
guidance services?

What provisions should be made for pupil trans-
portation?

Should senior high schools be comprehensive high
schools, or should special vocational schools be
provided?

Should special teachers of art, music, and physi-
cal education be provided for elementary schools,
or should elementary rooms be self-contained?

What variety of educational programs should be
provided in junior and senior high school?

Should a school lunch program be provided, and what
should be its characteristics?

What health services should be provided by the
school system?

CHAPTER II

ESTIMATING EXPENDITURES--SPENDING PLAN

Theoretically, the educational or working plan determines
the Spending plan. The budget reflects the legal provisions
of the State and is a direct result of the procedures involved
in estimating expenditures. It is the purpose of this chapter
to discuss the affect of legal provisions, the importance of
following good procedures in estimating expenditures and the

necessity for standardized records.

I. AFFECT OF LEGAL PROVISIONS

The laws governing the school budgetary process differs
from state to state. Some make no provision for local school
budgeting, others require detailed or itemized budgets. Michi-
gan is among those states requiring a detailed budget. The
state law of Michigan requires a budget to be prepared by each
school district "upon forms in such manner as prescribed or
approved by the state treasurer. . . Such budget shall clearly
indicate the source of all-estimated revenues and all expenses

16 In Michigan the accounting

for the fiscal period covered."
system of a local school may be audited by the Superintendent
of Public Instruction when it is deemed necessary. The fiscal
year shall begin on July 1, but no provision is made for the

date of budget approval.

 

l6Raymond Guy Compbell, State Supervision and fiegulation
‘2; Budgetagy Procedure in PubIIc Schools Systems, (NewYork:
Bureau of Publications, Teachers College, Columbia University,
1935). pp. 62-65.
-25-

- -27-

 

 

 

 

 

 

 

 

 

 

 

POPULATION BUDGET NOT SUBJECT REVIEWED BY REVIEWED
GROUP TO REVIEW ONE AGENCY BY MORE
' THAN ONE
/// (//’ AGENCY
500000 a _ v I
over I 31% I 54% '150
100000-499994 31% J 47% I 22% ]
50000-99999 | 42% i 47% I11%]
10000-29999 I 52% L 41% 17%!
5000-9999 I 55% I 40% 5%]
2500-4999 I_ 64% l 33% Ii-3%

 

 

All groups [ 54% 1 40% '64

PERCENT OF CITY SYSTEMS

Source: National Education Association, Research
Division, "Fiscal Authority of City School Boards," Research
Bulletin, Washington, D. C.: N. E. A., April 1950, 28:54.

 

The foregoing illustration indicates the percentage of
city school systems which are required to have their budgets
reviewed by an outside agency.

New York, for example, has a state salary schedule and
Michigan stipulates that the primary fund can be used only
for the payment of teachers salaries. Many states have devel-
oped state accounting systems and make available to local
administrators budget forms accompanied by a manual.

As a general rule, the administrator should check the
local city charter and ordinances for local regulations; the
State School Code for state requirements; and should have on

file the provisions for securing and expending Federal funds.

228-

II. PROCEDURES IN ESTIMATING

Budgeting is often referred to as being a continuous
task. To facilitate the preparation of the-budget, a budget
calendar indicating things to be done, the people who are to
perform them, and the deadline for each has proven to be very
helpful. The schedule adopted should be evaluated and devel-
oped to meet the problems of the local school.

Some schools have a specific calendar date for each task
involved in budgeting, while other schools have a more general
time schedule. Both Ferndale and Utica use a more or less
general time schedule and have no specific printed budget
calendar, while Oak Park Schools employ a rather elaborate
schedule.

The revised budget procedures for Oak Park, effeCtive

September 1959, are as follows:17

 

1. Meeting with Superintendent's Advisory 2nd Council

 

Council and all system directors to meeting in
initiate budget preparations and October
distribute forms.

2. Meeting of building budget committees October 15
to prepare tentative building budgets. -
Screening, compilation and preparation December 1

of building budgets by principals.

 

3. The original and one carbon copy of
tentative budget submitted to the
Business Manager. (Budget to include
a summary with substantiating data)

December 3

 

4. Superintendent and Business manager

 

review tentative budget requests. December

5. Tentative budget allocations deter— 2nd Council
mined by Business Manager upon in
approval of Superintendent. January

 

 

 

 

 

l7Revised Teachers' manual, 22, cit., pp. 51-52.

-29-

 

6. Tentative budget allocations reviewed 3rd and 4th

by Superintendent's Advisory Council meeting
and/or a Central Committee appointed
by the Superintendent.

 

7. Tentative budgets returned for adjust- Returned to
ment if necessary and returned to Bus. Manager
Business Manager and Superintendent by Feb. 1

within one week.

 

8. Adjusted budgets compiled by the
Business Manager upon approval of the
Superintendent.

 

9. Submit orders for 325 (Bid Items). March 1

 

10. Total budget presented by the Super-
intendent and Business Manager with March IO
the Superintendent's Advisory Council.
(Copies to each member)

 

11. Budget submitted to the Board of 2nd Council
Education for approval and adoption. in March

 

12. Budget submitted to the County

Allocation Board April 15

 

13. After the tax allocations have been
determined by the Allocation Board,
budgets to be resubmitted to the
Superintendent's Advisory Council and/
or Central Committee for adjustments,
if necessary. All adjustments shall
be properly noted in each budget.

 

14. Proposed changes in the budget must be
of an emergency nature and must be
submitted in writing for review by
both the Superintendent and Business
Manager.

 

 

 

 

A suggested school budget calendar which can be altered

to meet the needs of a particular district is presented on

the following page.18

 

18New York State Education Department, 22, cit., pp. 72-74.

- ~30-

 

l.

a. Set up the new budget folders-carry forward
notes on desirable items that could not be
included in the budget just adopted.

b. Revise budget calendar and request forms as
experience indicates.

c. Make preliminary notes on budget explanation
formats that would be helpful another year.

July

 

a. Obtain, while summer repairs are in progress,
preliminary estimates of building and major
equipment repairs and alterations to be
scheduled during the next budget year.

b. Obtain preliminary appraisals for replace-
ments to transportation fleet as overhaul
work is done.

0. Gather preliminary data dealing with potential
re-evaluation of salary schedules.

d. Outline the questions, having budget impli-
cations, that the curriculum and program
committees should appraise.

July
August

 

'3?

a. Following the new school census report or
estimation:

Review need for extension of transporta-
tion routes and additions to fleet that
may be necessary another year.

Explore need for additional classroom
facilities and potential reallocation
of children that may also be needed
in a year.

Bring long-term budget up to date for
one year.

August
Sept.

 

Advise staff regarding coming role in budgetary
process; obtain general suggestions and
recommendations.

Sept.

 

Appoint curriculum and program evaluation commit-
tees with directions to report needed changes
in textbooks, supplies, equipment and staff
by January 15.

Appoint building needs committees with request
to report budgetary implications by Jan. 30.

Appoint and commence evaluation procedures of
budget advisory groups-~staff and lay citizens.

October

 

Budget request forms distributed to staff.
Requests for operation and maintenance of plant
supplies to be submitted to the central office.

October
Nov.

 

 

Inspection of buildings and building equipment
by the board with view to budget needs.

 

Dec.
Jan.

 

 

~ -31-

 

Preliminary reports of curriculum and program
committees received and discussed by the
board.

Final board approval given to format to be
used in compiling the budget document.

Board review and discussion of salary schedules
and emoluments begun.

Dec.
Jan.

 

Final reports received by the board from curricu-

lum and program evaluation committees.

Jan.

 

Requests for furniture and equipment additions
and replacements to be sent to the central
office.

Requests for textbooks, workbooks, supplementary
reading materials and library books and
supplies to be sent to the central office.

Requests for instructional supplies and appara-
tus to be sent to the central office.

Requests for staff travel to be submitted to
the central office.

Requests for new positions to be submitted for
board action.

Estimates for general control and other central
office supervised expenditures to be compiled
by central office.

Feb.

 

10.

Final decisions rendered regarding salary sched-
ules and emolument changes.

Notices of salary sent to staff and returned.

Estimates of income compiled by central office.

Coding, analysis and adjustment of budget
items done by central office.

Preliminary compilation of tentative total
budget made.

Final reports from budgetary advisory groups
made to the board.

Preliminary draft of popularized budget developed.

March

 

11.

 

Budget adopted.

 

Prior to
hmeBO

 

probable future expenditures.

indicate previous experiences are (l) surveys,

Past experience is an important factor in estimating

accounting, and (3) cost accounting data.

Records to substantiate and

(2)cm1d

 

-32-—

Local, state, and federal surveys relating to curriculum,
teacher training, and school finance may be used as a guide
or basis for supporting arguments applying to the school
program.

Initial enrollment records should be used to indicate
historical growth of enrollments over the years. Census forms,
attendance records, enrollment figures, and class schedules
represent a source of data for indicating past and future
enrollments. Once the estimated enrollment is established,
the desired teacher-pupil ratio can be applied to determine
building and staff needs. .

The projected enrollment figures for Oak Park and their
function in determining staff requirements and classroom needs
for 1960-1966 are shown below.19

Projected Elementary School Enrollments
1960-1966 ‘
(pupil-teacher ratio used was 27-1)

60-61 61-62 62-6: 63-64 64-65 65-66

 

K 787 756 798 738 698 563
l 669 697 666 708 658 608
2 662 669 697 666 708 658
3 654 662 669 697 666 708
4 572 654 662 669 697 666
5 465 572 654 662 669 697
6 435 465 572 654 662 669
Spec. Ed. 24 2 24 24 24 24
253E I??? I???“ ERIE” 3762' 2553'
Exist. Rms. 144 144 144 144 144 144
Total Rms.
Needed 161 , 166 176 180 177 170
Yr. Deficit -17 -22 -32 -36 -33 -26

 

19Po ulation, ro ram, and Financial Characteristics of
the Oak Par D stricI EcHools, October 25, 1960, preparédIEr

the Oakland County Board of Education.

-8

-33-

Projected Junior High School Enrollments

60-61 61-62 62-63 63-64 64-65 65-66
7 443 435 465 572 654 652
391 443 435 465 572 654
Sp. Ed. l6 17 18 21 25 27
395 918 I553 13—34
Exist. 27 27 27 27 27 27
Total Rms. |
Needed 27 29 29 34 41 44
Yr. Deficit O -2 -2 -7 -14 -17

In school year 1960-61 Special education students number
about (1) per 50 pupils. This ratio has been used for the
5 year projection.

Projected Senior High School Enrollments

 

 

 

 

60-6l 61—62 62-63 63-64 64-65 65-66
9 391 391 443 435 465 572
10 290 391 391 443 435 465
11 223 220 39% 391 g4; 43g
12 274 2 3 391 44
IIVE' ‘I295 I515 ‘I666 I754 I915
Exist. Rms. 59 59 59 59 59 59
Total Rms.
Needed 59 65 76 83 87 96
Yr. Deficit O '-6 -17 -24 -28 -37

For the school year 1960-61 the senior high school is
using all of its facilities (59) rooms. For an enrollment of
1178, this gives a ratio of 20-1. This means that for every
twenty students there is one teacher. This same ratio has
been used for the 5 year projection.

1._34-

Total Projected School Enrollments

 

 

 

 

 

 

 

60-61 61-62 62-63 63-64 64-65 65-66
Elem. 4268 4499 4742 4818 4782 4593
Jr. High 850 895 918 1058 1251 1343
Sr. H. S. 1178 1295 1515 1660 1734 1915
6296 1 7536 1
Exist. Rms. 230 230 230 230 ' 230 230
Total Rm. . ’
Needs 247 260 281 297 305 310
Yr. Deficit -17 -50 ' -51 -67 -75 -80
Projected Staff Needs
Enrollment 6296 6689 7175 7536 7767 7851
No. 0
Teachers 256 269 293 318 338 353
Spec. Staff 52 68 72- 7 77
“.353 “333 “351 3E LI; L35
Total Staff
Increase 35 20 - 33 _ 29 23 27
Admin. 18 2O 21 21 22 22
Elem. Teachers (K-6)
Enrollment 4268 4499 4742 ‘ 4818 4782 4593
Teachers 144 150 160 164 ~164 164
Increase 8 6 10 4 O O

The above projections represent an approximate 30-1 pupil-
teacher ratio. The number of classrooms available will be a
limiting factor until additions are made to existing schools,
but additional teachers are provided for special programs which
may be added. Classrooms available in 1960-61 will limit the
number of new classroom teachers to 5, but an additional 3
teachers are shown which would make it possible to add foreign
language to the elementary school program.

1.3

Enroll
Teach]
Patio:

iflcrea

I
factoi
new p]
tiona]
39835
Mich

Jr. H. S. Teachers (7-8)

 

-35-

 

 

 

 

60-61 61-62 62-63 63-64 64-65 65-66
Enrollment 850 895 918 1058 1251 1343
Teachers 46 48 49 6O 7O 75
Ratios 19:1 19:1 19:1 18:1 18:1 18:1
Increase 12 2 1 ll 10 5

The ratio for the school year 60-6l drops to 19:1 from
21:1 to allow additional teachers for new or expanded programs
--foreign language at both grade levels, a full year of sci-
ence in 8th grade, expansion of remedial programs. Based on
actual projections of class size this increase in staff will
provide for a decrease in average class size for all required
courses from the present 31 to approximately 28.

Senior H. S. Teachers (9-12)

 

 

 

60-61 61-62 62-63 63-64 64-65 65-66-
Enrollment 1178 1295 1515 1590 1734 1915
Teachers 66 73 86 96 104 114
Ratios 18:1 18:1 18:1 17:1 17:1 17:1
Increase 10 7 l3 - 10 8 10

The decrease in ratios from 19:1 to 17:1 provide for 3
factors: lightened teaching loads for teachers involved in
new programs such as Beberman Math and M. I. T. Physics, addi-
tional time for departmental coordination as staff size in-
creases, and provision for four year course sequences for
which the registration may be light for 3rd and 4th years.

Cost analysis provides a means of determining a mathe-
matical basis for forecasting estimated expenditures. The
cost of each type of expenditure is ascertained and evaluated
in terms of the variable unit related to such costs--for
example, costs per pupil in average daily attendance, per
pupil in average daily membership, per teacher or classroom,
per square feet of floor area, etc. The authenticity of the
accounting records, on which this data is based, must be sub-
stantiated by an annual audit conducted by an agency outside

the school system--external audit.

desi:
Nqu:
be g:
nigh‘

Tube

--36-

Once the enrollment figures have been projected and the
desired student-teacher ratio is known, the number of teachers
required can easily be determined. Consideration must also
be given to any special programs that may be introduced which
might tend to lower the pupil-teacher ratio and increase the
number of teachers needed. The number of teachers can then
be applied to the salary schedule to determine the largest
single expenditure in the school budget. Of course, in
doing so the experience of the potential teachers must be
considered. The summary of Oak Park's salary budget is
presented in the appendix. In 1960-61, $2,513,622 was appro-
priated for salaries out of a total budget of $3,426,857
or approximately 73 per cent. Utica, on the other hand, ap-
prOpriated approximately $2,419,000 out of $3,059,000 for
salaries or about 79 per cent of its total budget. The 6 per
cent difference is undoubtedly accounted for by the numerous
bus drivers employed by Utica.

Another large expenditure item in the budget is opera-
tion of the plant, which includes custodial wages, fuel,
gas, water, electricity, telephone, supplies, and other
operating expenses.

An analysis of the expenditures for the school systems
of Oak Park and Utica is presented on the following page.

The amount and per cent of the total budget is indicated for
each account. The amount of salaries included in each account
is also indicated together with the per cent that it rep-
resents of the total budget.

-37-

Utica's expenditures for 1960-61 and the individual

 

 

percentages are presented below:20

Account Amount Approp. ‘fi ._9 Salaries fl
Administration $ 92,849 3.0 3 68,268 2.2
Instruction 2,058,918 67.3 1,953,954 63.9
Health Service 14,349 1.0 11,288 .4
Pupil Transportation 227,565 7.4 157,588 5.1
Operation of Plant 405,205 13.0 211,231 6.9
Maintenance of Plant 33,940 1.1
Fixed Charges 30,427 1.0
Food Service 400
Community Services 32,050 1.0 17,050 .6
Capital Outlay 162,222 5.0
Outgoing Transfers 870

£3,058,795 IOOTO' $2,419,379 79.1

Oak Park's appropriations for 1960-61 were:21

Account Amount Approp. {fi ‘33 Salaries ‘fi
Administration 3 145,203 4.2 3 115,703 3.4
Instruction 2,281,856 66.6 2,105,682 61.5
Operation 398,750 11.6 256,000 7.4
Maintenance 32,000 1.0
Fixed Charges 21,000 1.0
Auxiliary Services 44,498 1.0 36,238 1.0
Capital Outlay 105,500 3.2

1

Supplemental Disburse. 398,050 1 .
’4 ’ IOO'G g2,513,623 :303

It should be noticed that the percentage spent for
instruction in each of the school systems is approximately
the same--67 per cent. The amount expended for administra-
tion is 3 per cent in Utica compared to 4.2 per cent in Oak
Park. This is accounted for largely by the fact that Oak
Park has more assistants to the superintendent. The operation
and maintenance of plant for the two schools compare as

follows:

 

20Utica Community Schools, Preliminary Budget 1961-62.

21Dr. James N. Pepper, 22. cit., p. 2.

-38—

Utica Oak Park

Total Budget $3,058,795 100.0% $3,426,857 100.0%

Operation 405,205 13.2 398,750 11.6
Maintenance 33,949_ 1. 32,000 .2

s 459.145 14.5% s 430.750 12.5%
The difference is attributed to the fact that Utica operates

 

 

nine individual schools and an administration building while
in 1960 Oak Park only operated eight buildings plus an
administration building.

The percentage allocated for pupil transportation ser-
vice in Utica (7.4%) exceeds the percentage expended for
auxiliary services in Oak Park which includes health, food,
transportation, attendance, and student body and community
services (3.0%). This is because Utica maintains approxi-
mately forty buses to Oak Park's four.

Cost analysis may help in estimating operating expendi-
tures for a new building. One of the most common units of
expressing costs of operating public schools is the total
current expenditures per pupil in average daily attendance.
Caution should be taken when using this unit analysis as a
basis for comparison with other districts. Due to the lack
of uniformity in accounting systems and the wide range of
educational programs, expenditures may be classified dif-
ferently. The most frequently mentioned chart of cost units

was prepared in 1927.22

 

22N. L. Engelhardt and Fred Engelhardt, Public School
Business Administration, (New York: Teachers CoIIege,
CqumBIa UniversIty, 1929), p. 789.

I
(1’ .

C
:

- .n

-39- -

1. Total Educational Cost--per pupil in average daily
attendance (ADA)
2. Building Cost--per pupil in ADA
3. Administrative Cost-—per pupil in ADA
4. Instructional Cost-—per pupil in ADA
5. Supervision Cost--per teacher supervised
6. Attendance Cost--per pupil in ADA
7. Instructional Supply Cost-~per pupil in ADA
8. Special Activities--per pupil in ADA
9. Janitorial Supply Cost--square feet of floor space
10. Sanitary Supply Cost--per pupil in ADA
11. Maintenance Cost--square feet of floor area or
value
12. Operation Cost (Cleaning)—-square feet of floor
area or value
13. Auxiliary Services--per pupil in ADA
14. Janitor Service--square feet of floor area
15. Teaching a subject-—per pupil-hour or per pupil
in ADA

I believe that the unit costs involving the categories
of teaching a subject, operation costs, attendance cost,
instructional cost and total educational costs should probably
be computed on the basis of daily average membership instead
of average daily attendance. All of the personnel involved
are salaried and would be paid regardless of the number of
students present. Tests and supplementary materials are
usually duplicated in sufficient quantity to provide for all
students registered regardless of their attendance for any
particular day. The administrative costs should undoubtedly
be computed on a per teacher basis, due to the fact that the
administration has little to do with the individual student.
Heating costs, which would probably be included under Main-
tenance in the above classification, should not be considered
to vary only on the basis of square feet area. Other factors
such as location, boiler efficiency, type of fuel, exposure

to prevailing winds, amount of glass, building material, type

..- .q-o

you .. -

I.

:40-

of insulation, and other factors affect the amount of heat
loss.

The procedure that Ferndale City Schools used in deter-
mining a budget estimate for fuel in 1958-59 is explained on
the next page. The amount of fuel consumed by each building
and the prices paid over a period of 5 years were derived
from the accounting records. The unit cost and the quality
of fuel purchased was also considered.23

Records revealed that #2 oil had increased in cost from
14.4 cents to 15.4 or nearly 7 per cent. Number 5 fuel oil
remained at 10 cents per gallon. Coal increased from $11.25
to $11.69 per ton or about 4 per cent. Number 6 fuel oil
was currently being sold at about 9 cents per gallon. Since
no experience had been had at Ferndale High School (just
opened) and since some price increases were probable, it was
estimated that not less than $80,000 should be budgeted.

To improve the budgetary process a standard amount of\.
fuel (quantity and price) might be forecasted on the basis
of the amount of fuel consumed per square feet in prior years
and then adjusted for any predicted volume or price differences.

A file may be kept during the year in which information
pertinent to the budget can be placed. This might include
unit costs, insurance premiums for next year, references to
board minutes that might affect future expenditures, and

reasons for exclusion of some items from the budget.

 

23Lloyd M. Atwood, Assistant Superintendent, Non-Salary
Items‘Tg‘Bg Considered in 1958-59 Bud et, Ferndale City
ScHools, p. 43}

' x ’ 'r I r " ' ~
.J .l- .5 .' -J - L ... ——d
1 - — ’— -'

 

..“ “$»41 ("7 ( r".« ) o '7 ”"7 57’ ..i2 "'“ -i0'
:1) 1.4.. V-s- 0 ~. I,‘/~- ..,. ¢,_/:-/ -, r-’,‘r-“r
Sic r CCET (€22") 27f.32 Lif.:2 .QT:.§S
2;; Call (t NT) ;;7.51 ,27.57 337.3i
Cuntrnl C11 (3x19.) ",73C :,53C
.1... __.,.— 1:12-31 101-12
u33t* -—~———- ~—-——-- 9 3,138.72
Coniral* j 1,.:§.: j 1,-33.30 CJT.§_
Coolioje* 3,0L3.21 C,Ll£.05_ 3,535.31
Grant* 3,CCS.17 3,703.11 2,217.02
"r. _ ' -. -xx fifln ’ ~ m Ir‘t _ ’. ’I‘v .3
Larlannnn 1,, ,.33 “,1 ;.:9 1,-6..3c
Jackscn* 2,345. 5,-AT 51 3,0?5.57
Jefferscn** 1,115.73 L:3.?5**** 2,3)fl.CC
Lincoinr 5,951.20 C,2;A.O7 0,.127.2J
Roosev01t* 2,75 .70 2,743.73 3,333.;"
Taft** 1 ,773.f9 573.5m! 4*“ 2,094.38
U:15Lin ton***1,f$3.;7 1, €7.$9 2,424,37
Uilson*** 2,222.71 2 353.17 A;;2§C.23*
Total $31,262.01 :31,;93.:0 33,033.14
Wilson: anvcrtcd to cll in December 1.“54.
Hariinf: Converted to sicker in fiflwie? of 1056, and
Washington: Converted to oil in Janu--ry,1557.

3

 

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If) v1.1 7-0

"-01-
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Fired

3:34 Coal ProvicuSIyB

'21103

 

 

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' on; 5 ,' .qo fr
1.7,.4-H‘PQ 7 j--,,, -3.)on
.' hr A.," '3 2p
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0 070 we: r:
~,LJ_,1/.10 l, (Jq-e I)
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a», v 1...,fiJga—i. EL
'5 I11"! In ’3 pffi’) fir _.
11’1"" .‘L" 1,. 14"]."‘ _
“Iv 0:8 A: “/6 11 t:
85ft, l/K .v/ _')v~f\ ’— --I~v.V
4 1 ° n.4, + 7. ° 0:"!
Co :13 iii Sooner in 1,,..
n ' 1 _ “ '5 ’1 - J- ‘ -
atoucr Coal, ,. .09 per COL.

,‘

 

-42-

 

 

To 1-1-58
1953-54 1954-55 1955-56 1956-57 1957-58 1958-59
Appropriation $40,000 $42,500 $42,500 $43,000 $51,500
$80,000
Expenditure 31,494 56,938 47,986 48,113 12,651.59
December September
Enrollment 7,404 7,689 7,863 77,950 8,062 Est. 8,292

Estimate (1 Nae d

 

Stoker Coal, 500 tons G $11.69 $ 5,845
#5 Fuel Oil, 425,000 gals. e 3.10 42,500
#6 mm 011, 300,000 gals. 08.09 27,000
#2 Fuel Oil, 6,500 gals. e $.154 1,001

Total m

Catalogs from varioussuppliers should be kept up to
date and readily available. Adequate records should also be
maintained relating to purchases. This facilitates pricing
of items to be resold in the bookstore and provides an
accurate allocation per item for use in forecasting future
expenditures.

Many school systems use a standard list of supplies which
is distributed to teachers or departments in order to obtain
requests for the succeeding year.

Utica Community Schools, for instance, has a lB-page list
of standard instructional supplies. This form lists the stock
number, amount requested, current inventory, amount to order,
unit cost, and the total cost. A sample page selected from
this list is shown on the following page.

Oak Park District Schools has just initiated the use of

a standard supply list. Therefore, it is not as complete as

 

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-44..
Utica's and does not contain price or inventory data.

When a standard list of supplies and equipment is used,
caution should be taken so that new products which may be
more efficient and durable are not overlooked. Adequate
inventory records should be maintained either in the main
office or storeroom so that particular items are not over-
stocked or diminished. However, excessive records involving
minor or inexpensive supplies may become costly.

To aid the building principals in budget preparation,
the central office at Oak Park distributes forms classified
according to account number. A description of the items to
be included in each account appears on the individual sheets.
Some amounts are based on a per pupil allocation while others
must be arrived at through cooperative planning. The prin-
cipals send these sheets to the business manager for formu—
lation into the total planning budget. Since the items are
already classified according to account much time is saved.

Oak Park does not permit piece-meal budgeting. That is,
once a building's principal has compiled a tentative budget
for the entire year and has submitted it to the business
manager, additional requests will not be considered. Any
late requests must be substantiated in written detail and
must be of an extreme emergency nature. Partial requests
cannot be properly evaluated and defeats the purpose of
budgeting. Once the budget is approved requisitions are
submitted dated July 1 for all items needed the following
September. Requisitions for items not in the budget are

cancelled.

-45-

The criteria for evaluating budget requests in Oak Park

is determined by the answers to the following questions:

(1) Will the inclusion of this request improve or maintain

the instructional program? (2) Will its non-inclusion seri-
ously impair the instructional program? (3) Will it materially
effect the health or safety of pupils or employees? (4) Will
it increase the economy of maintenance or operation? (5)

Will it prevent deterioration of school pr0perty? (6) Is it
necessary but may be accomplished over a several-year period?
(7) Is it more economical to replace or repair?

If the request falls into the following categories, it
should not be made: (1) desirable but not necessary; (2)
impractical; (3) cost exceeds functional value; (4) will add
esthetic value only; (5) contrary to policy; (6) it may be

postponed without adverse consequences.

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-45-
BUDGET RECOMMENDATIONSZ4 SCHOOL

TEXTBOOKS & REFERENCE MATERIAL
INSTRUCTION 327

Recommended Budget 1961-62

 

Budget Allocation 1960-61

 

Expenditures 1959-60

 

Textbooks & Reference Material: This account includes all
textbooks, supplementary texts, and reference materials which
are furnished free to students in grades 1-6. This account

also includes reference books for the Junior and Senior High

School.
Basic Texts Per Pupil $1.50
Supplementary Texts 2.50
Reference, Encyclopedia,

Dictionaries 1.00
Total per pupil $5.00

Justification: Please include pertinent substantiating in-
formation to justify the above requests. Use reverse side
of this page or attach additional pages if necessary. Be
sure to properly identify each of the above items. Any
budgetary increases proposed for next year should be care-
fully explained.

 

24Dr. Arthur Matthews, Principal, Oak Park Senior High
School, 1961.

-47-
BUDGET RECOMMENDATIONS SCHOOL

MAINTENANCE OF BUILDINGS
MAINTENANCE 341

Recommended Budget 1961-62

 

District Budget Allocation 1960-61
District Expenditures 1959-60

 

MAINTENANCE OF GROUNDS: Please include expenses pertaining
to snow removal, drainage repairs, grass seed, fertilizer

and shrub replacements.

--48—
BUDGET RECOMMENDATIONS SCHOOL
MAINTENANCE OF BUILDINGS
MAINTENANCE 342

Recommended Budget 1961-62

 

District Budget Allocation 1960-61

 

District Expenditures 1959-60

 

MAINTENANCE OF BUILDINGS: Please include all repairs and
replacements pertaining to carpentry work, plastering, paint-
ing, roofing, replacement of glass, cleaning of drapes,

building or classroom alterations, and additional hardware.

I.

 

o...

'.

   

-49-

BUDGET RECOMMENDATIONS SCHOOL
MAINTENANCE OF FURNITURE & EQUIPMENT
MAINTENANCE 343

Recommended Budget 1961-62

 

Budget Allocation 1960—61
Expenditures 1959-60

 

MAINTENANCE OF FURNITURE & EQUIPMENT: Include cost of

*Iacin , re airin and servicing_of the following types of
eqqumené: esks, chairs, typewriters, office equipment,
instructional apparatus, musical instruments, phonographs,
radios, shop tools and similar items.

Also include electrical, plumbing, lighting, heating, venti-
lating repairs and repair to time and public address equipment.

If equipment is to be replaced, cost of original equipment
will be charged to Maintenance 343, and that cost exceeding
the original price of equipment will be charged to Capital
Outlay. Example: If a typewriter purchased in 1955 costs
$l80.00 and the replacement cost is $250.00, $180 will be
charged to Maintenance 345 and $70 will be charged to Capital
Outlay 373.

Justification: Please include pertinent substantiating infor-
mation to justify the above requests. Use reverse side of
this page or attach additional pages if necessary. Be sure

to pr0perly identify each of the above items. Any budgetary
increases pr0posed for next year should be carefully explained.

-50-

BUDGET RECOMMENDATIONS SCHOOL
CAPITAL OUTLAY - GROUNDS
CAPITAL OUTLAY 371

Recommended Budget 1961-62

 

Budget Allocation 1960-61

 

Expenditures 1959-60

 

GROUNDS: Include improvement of grounds or equipment for
grounds. Examples: filling, grading, paving of driveways,
seeding lawns, trees, shrubs, sidewalks, fences, flagpoles,
etc. These items must refer to an original outlay.

Justification: Please include pertinent substantiating infor-
mation to justify the above requests. Use reverse side of
this page or attach additional pages if necessary. Be sure

to pr0perly identify each of the above items. Any budgetary
increases proposed for next year should be carefully explained.

-52-
BUDGET RECOMMENDATIONS » SR. HIGH SCHOOL

CAPITAL OUTLAY - FURNITURE & EQUIPMENT
CAPITAL OUTLAY 373.3

Recommended Budget 1961-62

 

Budget Allocation 1960-61

 

Expenditures 1959-60

 

FURNITURE & EQUIPMENT: Please include articles that are rela-
tively durable in nature and are not physically destroyed in
use. Please include such articles with a unit cost of more
than $15 and having a normal life of more than five years.
Examples: tables, chairs, typewriters, maps, globes, instruc-
tional apparatus for chemistry, physical science, equipment
for commercial department and home economics.

Please list allocations for Physical Education, Audio-Visual,
Instrumental and Vocal Music separately.

Justification: Please include pertinent substantiating infor-
mation tojustify the above requests. Use reverse side of
this page or attach additional pages if necessary. Be sure

to properly identify each of the above items. Any budgetary
increases pr0posed for next year should be carefully explained.

-53-
III. ACCOUNTING RECORDS

One of the purposes of budgeting is to maintain control
of funds. In order to achieve this, the accounting records
must have the same classification of accounts as the budget.
Also, for effective control, the chart of accounts must be

set up in terms of managerial responsibility.

Expenses may be classified by character, organizational

units, objects, functions, and funds?5
Character classification of expenses may be divided into

three parts: (1) current expenses, (2) capital outlay, (3)

debt service. These may be subdivided as follows:

 

Current Expenditures Capital Outlay
General Contfol Sites
Instruction Buildings
Auxiliary Agencies Building Equipment
Coordinate Activities Educational Equipment

Operation of Plant
Maintenance of Plant
Fixed Charges
Debt Service
Interest on loans repaid during the year
Principal and interest on short-term loans or
warrants
Principal and interest on bonds
This method of classifying expenses is applicable to
schools of all sizes and is recommended by the National Educa-
tion Association and the National Association of Public School
Business Officials, and several state departments.
According to statistics published by the United States
Office of Education, the percentage distribution of current

expenditures in the average school system is as follows:

 

25DeYoung, 22. cit., p. 70.

-54-
PERCENTAGE DISTRIBUTION OF CURRENT EXPENDITURES

Source: Ward G. Reeder, School Boards and Superintendents,
(New York: The MacmiIlan Company, 1954), P- 85.

General Control (Administration) 4.8
Instruction 69.4
Operation of School Plant 10.4
Maintenance of School Plant 3.4
Auxiliary Agencies 7.4

Fixed Charges
Total Percentage .

i:

For Ferndale's non-salary items included in the 1958-59
budget, see the appendix.

It is suggested by Knezevich and Fowlkes that the char-
acter classification of accounts is rather vague. They rec-
ommend a functional-character classification as being more
meaningful by implying that the index of the intrinsic quality
(character) can be understood best by examining the kind of
expenditure.26

Classification according to object entails grouping
transactions according to the items purchased--fue1, text-
books, instructional supplies, etc. Because this classification
would lead to numerous accounts, subsidiary ledgers could be
used along with the character-functional class to indicate
the expenditure purpose for cost analysis.

Grouping of accounts by organizational unit refers to

classification of expenditures according to the individual

schools involved.

 

26Stephen J. Knezevich and John Guy Fowlkes, Business
Mans ement of Local School S stems, (New York: Harper and
Brotfiers, 1930), p. 96.

a. . .. 4\~.».'.\.:flw1 i~J~
,1
“1“... in . , P. .f F IL

-55__

The following accounts are suggested by the United
States Office of Education as the major expenditure accounts
under the functional-character classification: Administra-
tion, Instruction, Attendance Service, Health Services,

Pupil Transportation Services, Operation of Plant, mainten-
ance of Plant, Fixed Charges, Food Services, Student Body
Activities, Community Services, Capital Outlay, Debt Services
from Current Funds, and Outgoing Transfer Accounts.27

Encumbrance accounting is an aid used to insure the
pr0per disbursement of funds. It is necessary for financial
control and represents a commitment of funds prior to the
actual disbursement to liquidate a liability.

The absence of adjustments for depreciation, accruals,
and deferred items. which are considered necessary in industry
to present a true profit and loss statement, tends to simplify
school auditing and accounting. Since this is a non-profit
organization no emphasis is placed in this area.

Up to this time school systems have more or less volun-
tarily used the generally accepted character method of classi-
fying expense accounts. However, there is a group of schools
in Michigan currently experimenting with a uniform accounting
‘system-recommended by the United States Department of Health,
Education, and Welfare. Utica Community Schools is a partici-

pant in this experiment in an attempt to standardize accounting

 

271bid.

records.

110.
120.
130.

210.

-56-

ADMINISTRATION
100 Series

Salaries
Contracted Services
Other Expenses

INSTRUCTION
200 Series

Salaries
211. Principals

610.
620.
630.
640.
650.
660.

The expenditure accounts are classed as follows:28

OPERATION OF PLANT
600 Series

Salaries

Contracted Services
Heat for Buildings
Utilities, Except Heat
Supplies

Other Expenses

212. Consultants or Super.

213. Teachers MAINTENANCE OF PLANT
215. Sec. & Cler. Ass'ts. 700 Series
216. Other Salaries for Inst.
220. Textbooks 710- Salaries _
230. School Libraries & 720. Contracted Services
Audiovisual 730. Replacements of Equip.
240. Teaching Supplies
250. Other Expenses FIXED CHARGES
800 Series
&
ATTENDQE§$ICE§EALTH 810. Employee Retirement
300-400 Series 820. Insurance & Judgments
830. Rental of Land and
Buildings
300' éfgfngzigiiizrVi°es 840. Interest on Current
Loans
400. gigitgtgzivffifignses 850. Other Fixed Charges

410. Salaries
420. Other Expenses

PUPIL TRANSPORTATION SERVICES

510.

520.

530.
540.
550.

560.

500 Series

Salaries
Contracted Ser.
Carriers
Replacements of Vehicles
Transportation Insurance

& Pub.

Expenditures in Lieu 0f .

Trans.
Other Expenses

 

28

Welfare, Financial Accountin

tems
S

(WashIngton:

, p. xix.

FOOD SERVICES AND

STUDENT-BODY'ACTIVITIES

900.

900-1000 Series

Food
910.
920.
930.

Services
Salaries

Other Expenses
Separate fund or
account

1000. Student-Body Activities

1010. Salaries

1020. Other Expenses

1030. Separate fund or
account

United States Department of Health, Education, and
for Local and State School S 8-
n1 ed States Government PrIntIng Office,

 

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'»

. shall/:1! RI'IIJN

.\

-57-

COMMUNITY SERVICES DEBT SERVICE FROM
1100 Series CURRENT FUNDS

. 1300 Series

1110. Recreation

1120. Civic Activities 1310. Principal of Debt
1130. Public Libraries 1320. Interest on Debt
1140. Custodial and Deten- 1330. Paid into Sinking Fund
tion Care of Children 1340. Schoolhousing Authority
1150. Welfare Activities 1350. Other Debts Service
1160. Nonpublic School Pupils '
1161. Instructional OUTGOING TRANSFER ACCOUNTS
Services 1400 Series
1162. Attend. & Health 1410. Districts in the
Services ' States .
1163. Transportation 1420. Districts in Another
Services State
1430. Tuition to other
CAPITAL OUTLAY than public schools

‘ 1200 Series
1210. Sites
1220. Buildings
1230. Equipment .
The Office of Education also publishes a complete hand-
book concerning this method of accounting. The universal
standardization of accounts and terminology will: (1) help
insure appropriate initial recording of financial data; (2)
improve the school accounting system; (3) improve school budg-
eting; (4) provide a sound basis for cost accounting; (5)
improve the accuracy of local, State, and national summaries;
(6) facilitate comparisons of financial information among
communities and among States; (7) aid policy determination;
(8) improve the accuracy of educational research; and (9)
facilitate the improvement of reliable reporting on the con-
dition and progress of education.29

There is a distinctive need for a standard accounting

system for schools. However, the USOE Handbook discussed

 

291bid., p. xvi.

a e o 0
It . .
n
.
1 ,
. s a
I
.11 A
.
s
C a O . .
.
I
u
. Ins
.
.
O
O O
.
I
1
.\
a,
O
1....
.‘s
1 a. I.
O O O t
a
1., l_
u ..
or. I I
I .
. at
. o
.1 r
I:

 

-58—

above is deficient in certain areas. It only outlines ex-
penditure and revenue accounts and makes no provision for
encumbrance, net worth, liability, or asset accounts.
Although this is a step in the right direction, I believe
the handbook must be expanded.

The significant changes that this handbook presents
are: (1) accounts are given numbers as well as name; (2)
revenue receipts are classified by source rather than a com-
bination of source and method of production; (3) the term
ADMINISTRATION is used in place of GENERAL CONTROL; and (4)
instead of an account for AUXILIARY SERVICES new accounts
have been established for ATTENDANCE AND HEALTH SERVICES,
PUPIL TRANSPORTATION, FOOD SERVICES, STUDENT BODY ACTIVITIES,
and COMMUNITY SERVICES. The latter, of course, must be a

tremendous help in analyzing the cost of various activities.

 

.,.!., .l .5... I...» I: M

‘J

CHAPTER III
ESTIMATING REVENUE--FINANCING PLAN

Early in the history of public school budgeting, the
expenditure program was of paramount importance. Twente
in his study of statutory provisions for budgetary procedure
revealed that:

In thirty-four states expenditure estimates

are required, whereas in only ten states items

pertaining to the estimated income for the fiscal

period are de81gnated.

However, today with the tremendous expansion of public
schools and the lack of adequate funds, the finance program
has become a rather complicated problem. In theory, the edu-
cational program serves as a basis for determining expendi-
tures which in turn are used to compute the necessary receipts.
Nevertheless, in practice it is frequently found that the fi-
nances available determines both the educational and spending
programs. Among the factors affecting revenue are predeter-
mined tax rates and the willingness and ability of the commu-
nity, state, and nation to support public education.

It is the purpose of this chapter to present the more
important sources of revenue and some of the factors involved
in estimating them for budgetary purposes. Special emphasis
will be placed upon trends developing in public school

receipts.

 

30Twente, pp, cit., p. 14.

~59-

-60-
The revenue receipts for public schools during selected
years are presented in the table below.
TRENDS IN SOURCES OF SCHOOL REVENUE RECEIPTS BY

LEVEL OF GOVERNMENT
(in millions of current dollars)

1222-30 1239-40 1949-50 1957-58
AMT. % AMT. % AMT. % AMT. .%

Federal 3 7 .3 6 40 1.8 S 156 2.9 $ 396 3.6
State 354 17.0 685 30.3 2,166 39.8 49527 40.6

“ti... A"? Set 6:36- it?» tit? Edi ni‘iii‘g' it?

Source: Data for 1929-30, 1939-40, and 1949-50 from

Biennial Surveys and Statistical Circulars, Office
of Education and TE? I957:5§—T?6m Advanced Estimates
of the Public Elementary and Secondary Schools :2;
the Year 1957-58, National Education Association.

An analysis of the preceding table reveals that the per
cent of funds provided by the Federal Government increased 3.3
per cent from 1929-30 to 1957-58. The percentage of revenue
furnished by local sources has declined, while the percentage
of State contributions has increased.

In 1957-58 approximately 53 per cent of the revenue
receipts for public schools was derived from property taxes,
42 per cent from non-property taxes and 5 per cent from mis-
cellaneous sources--endowments, gifts, interest earned. These
specific percentages vary among the states, depending on the
pr0portion of support provided by the individual state.31

Ferndale City Schools state that in 1957-58 about 55 per
cent of the money for operation was derived from local taxes;

45 per cent from the State.32

 

31Johns and Morphet, 2p, cit., pp. 116-117.

32Lloyd M. Atwood, 22. cit., p. A.

[mom’s 15:“;3’ T . ‘:I”‘-'.'7_T FIT" ' .- F
'I
‘1

-61-

The Federal government has provided a very small pro-
portion of the finances for public education. Although the
amount has been increasing, this is largely due to the Federal
aid for school lunch programs and for assistance to areas
unusually affected by Government activities. Other aid has
been given in the area of vocational education which includes
--home economics, agriculture, and provides for reimbursement FEM"
of such programs under the Smith-Hughes Act.

The Federal aid to education advocated at the present

time presents quite a controversy. 'First, many consider it

 

unconstitutional to provide such aid to private and parochial
schools, while others believe they should be included. Next,
if Federal aid is approved should restrictions be placed on
the disposal of such funds or should the disposition be left
up to the individual states. There is also a fear of inter-
vention and exertion of authority by the Federal government
if such an act were passed.

The National Defense Education Act qualifies many schools
for partial reimbursement of certain programs by the Federal
government. Among these are driver training, adult education,
science, mathematics, and foreign language.

State aid to public schools may be classified as: (1)
distributive funds and (2) equalization funds.33

Most of the state aid prior to 1930 was allotted to all

districts alike on the basis of average daily attendance,

 

33Deroung, pp. g_i_§_., p. 134—135.

 

 

-62-

census enrollment, etc. The state acted as a distributing
agent for apportioning the monies to districts regardless of
need or ability to support education.

Many states are now supplementing former grants by the
"equalization fund." Basically this involves three issues:
(1) measuring the need for educational services or the edu-
cational task faced by the several communities within the
state; (2) determining the minimum program which the state
advocates for each child together with the cost involved;

and (3) determining the proportion of cost that the state

WW‘ .-"-’- f‘qznm'n-flJévz-u'? ,7
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and local units will share in supporting the minimum program.

The amount of state aid that will be paid to districts
in any one year cannot always be depended upon. This situa-
tion forced many schools in Michigan to secure loans and even
defer the payment of teachers' salaries in 1957-58.

Among the taxes whose proceeds are in part or wholly
allocated to schools are those on net income, inheritance,
general sales, alcoholic beverages, tobacco, motor fuel and
motor vehicles, mineral and mineral products, chain stores,
corporations, general property, polls, and miscellaneous
excise licenses.34

The important local revenue is raised largely by property
taxes. This type of tax is similar to the income tax and
sales tax as far as productiveness in dollars is concerned.

The major problem involved, however, is that the assessment

must be fair and equitable.

 

34Mort and Reusser, pp. cit., p. 538.

-63-

Consideration must be given to delinquent taxes when
estimating probable revenue for budgetary purposes. It is
important that the data used be obtained from the same source
each year in order to have a valid comparison. A sample form
that might aid in estimating revenue for the next year is

illustrated below:

 

DELINQUENT TAX RECORD fw”“'
“1§§;F_-TTotal Amount Amount Rec'd. from Total I
Levy Received Delinquent Delinquen01es
19__
19_
19__
19__
19___

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

For schools having non-resident pupils, historical data
should be reviewed and comparisons made to determine any trends
that may be developing. For example:

TUITION RECEIVED FROM NON-RESIDENT HIGH SCHOOL STUDENTS

Year No. Students Amount Due Amount Rec'd.
1955-56 152 $15,200 $15,100
1956-57 169 16,900 16,900
1957-58 182 18,200 18,200
1958-59 201 20,100 19,100
1959-60 225 22,500 19,100
1960-61 236 23,600 19,000 (est.)

By analyzing the above table it is evident that the num-
ber of non-resident students is increasing more than the tui-
tion collected from them. This factor should be investigated
and taken into consideration when the amount of revenue received
from non-resident students is being estimated for budgeting

purposes.

-64-

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-65-

\..

II. NON-REVENUE RECEIPTS

Non-revenue receipts to public schools consist largely
of loans, bonds, the sale of pr0perty and insurance adjustments.
Boards of Education, in most states, are authorized to
issue bonds for school construction. The term of the bonds
should be considered carefully because the longer the term, F”‘”*
the greater the risk. This means that investors would demand 7
a higher interest rate. The typical bond issue matures over

a 20-year period.

All states have laws restricting the indebtedness of

 

boards of education. Bond limits are usually indicated as a
percentage of assessed valuation. The limits range from 2 per
cent in Kentucky and Indiana to 50 per cent in some districts
of Minnesota.35

It is common practice in the United States that school
bond issues must be approved by a vote of the people. Forty-
five states specify that the issue must carry by a simple ma-
jority in 34 states, by 60 per cent in 4 states, and by approxi-
mately two-thirds vote in 7 states. After the bonds have been
voted and approved, the common methods of marketing them are:
(1) selling them to the state, and (2) selling them to private
investment companies.

Serial bonds are usually preferable to straight-term or
sinking-fund bonds, since they provide for automatic retire-

ment and relieve the board of having to invest the sinking

fund money.

 

35Johns and Morphet, gp. cit., p. 216.

-66-

The administration involved in floating a bond issue
should check the specific legal provisions for their particu-
lar State and employ legal and technical advice with respect
to voting and marketing.

Short-term loans are not as formal as bonds. They are
usually secured for one to five years directly from a bank,
city, or other lending agency. The cost of the loan and other
pertinent information should be clearly and accurately re-
vealed and figured in next year's budget. In some instances,
it might be more profitable for the school system to obtain
funds from borrowing rather than to use its own capital. The
interest paid out may be lower than the amount that would be
sacrificed if invested capital or a time-deposit were
withdrawn.

Other non-revenue receipts might be secured by the sale
of real pr0perty or equipment used for schools. Land which
is being held for a future site might be rented pending the
building of the school. Insurance adjustments or money re-
ceived for loss of school property from fire, theft, or other

causes may also produce revenue.

III. FUNDS AVAILABLE FROM PREVIOUS YEARS

It is almost an impossibility to prepare a budget in
which expenditures and revenues will balance perfectly at the
end of the fiscal year. Therefore, there probably will be
either a surplus or deficit to be carried from year to year.

However, caution should be taken to prevent too large a

'g__.-w“ :9 A. ‘1 (“My S‘."|‘.L‘g‘

-67..

surplus. This may be the result of inadequate budgeting and
is just as undesirable as a large deficit.
A form providing for the comparison oanctual receipts

and expenditures is illustrated below.

AMOUNT OF RECEIPTS, EXPENDITURES, AND
SURPLUS OR DEFICIT

 

Year Re;:%gfs Expggiggures Total Per Cent Remarks

 

19__
19_
19__
19__
19__

Average

 

 

 

 

 

 

 

 

 

 

 

 

 

The next three pages present the estimated general fund

receipts for Oak Park District Schools during 1960-61.

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I.

CHAPTER IV
PRESENTATION AND ADOPTION OF THE BUDGET

.Once the budget is prepared, the last initial procedure
before it is put into operation is the presentation to and
adoption by the official ratifying body.

This chapter attempts to discuss the budget form, pro- Efimm-l
cedures used in presentation to the Board of Education, and t

steps involved in the formal adoption of the budget.

I. INTEGRATION OF EDUCATIONAL, FINANCIAL, AND SPENDING PLANS

 

The budget should clearly reflect the educational pro-
gram supported by the community and enumerate the expenditures
and revenues necessary to carry it out.

The introductory portion of the budget document should
provide a setting or basis for the appropriations requested.
It should include the following:

1. The major objectives of the educational program.

2. The role the budget plays in accomplishing these
expectations.

3. The additional services or changes that are
being initiated to fulfill objectives.

4. The limitations to attaining stated goals be-
cause of the inability to supply all desirable
appropriations or other considerations.

Oak Park, for instance, presents their philosophy, and

an explanation of expenditure items which are higher than

most schools and the anticipated educational returns. They

#71-

-72-

also list the points considered by the administration in
reviewing budget proposals. Their budget is subdivided into
sections for revenue receipts, the individual expenditure
accounts, and an appendix containing an analysis of debt
retirement funds and a summary of estimated budgets and tax-
requirements for 1960-65.

The budget should contain four groups of material: (1) “err,
the budget message; (2) the general budget summary; (3) the
estimates of receipts and expenditures; and (4) the supporting
schedules.36

The budget message is a written statement explaining and
interpreting the material to the Board and the public. It
must be written in understandable form void of technical
vocabulary. Items that might be included are statements

relating to the:

1. Financial condition of the district--amount
and explanation.

2. Educational policy of the Board and the effect
of anticipated changes.

3. Planned capital expenditure program.

4. Influence of other conditions affecting school
costs.

The general budget summary should present probable
expenditures and revenues including any beginning balances.
A list of expenditures for all purposes should be provided
’together with the increases or decreases of major items over

a period of one or more years. .

 

361bid., pp. 170-171.

-73-

The supporting schedules that might appear within the
budget document may include (1) an analysis of teachers'
salary costs-~salary schedule, number, and positions; (2)
the analysis of other personnel costs; (3) details concern-
ing kinds and quantities of materials and supplies consumed;
(4) the bonding program for the system over a future period--
schedules for bond retirement and interest payments; and (5)
tables showing unit costs--item or building.

A one-page general budget summary used by Utica Commu-

nity Schools is presented on the following page.37

Examples
of supporting schedules for (l) salary costs and (2) non-
salary expenditures presented in Oak Park's budget are pre-

sented in the appendix.
II. PRESENTATION TO BOARD OF EDUCATION

Legally, the board of education is responsible for the
preparation of the budget. However, the actual task of com-
piling and organizing the material is usually passed on to
the superintendent. It was previously stated that the budget
should be the result of c00perative efforts including build-
ing administrators, department heads and other staff members.

I The superintendent usually makes the individual admin-
istrators responsible for their respective buildings. The
principal then requests the various departments to submit

their budgets for the ensuing year. The principal after

 

37Utica Community Schools, Preliminary Budget 1961-62,
Exhibit A.

 

 

 

 

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-75-
scrutinizing the requests will combine them to form the esti-
mated budget for his building.

In Oak Park, the superintendent is responsible for the
income, salary, and approval of the budget. The business
office and assistant to the superintendent in charge of in-
struction are responsible for the instructional aspect and
the business manager for the non-instructional budget items.

The superintendent should present the budget to the
board several weeks before the final adoption date. An oral
interpretation should be made at this time and 00pies of the
pr0p0sed budget made available. They may be either printed
or typewritten, employing the use of carbons. However, mimeo-
graphed or dittoed budgets are p0pular because of the ease of
producing additional copies.

Usually a letter of transmittal accompanies or is in-
cluded in the budget at the time it is presented for approval.
This aids in calling attention to certain factors and may
help justify requests.

Reusser points out that at least four types of budget
presentations are outlined in the statutes of the various
states: (1) presentation to some person or board for the
purpose of making clerical corrections only; (2) presentation
to local, county, or state boards or officials who have the
authority to increase or decrease allottments; (3) presen-
tation to the electors of the district for their approval and
for purposes of levying the neceSsary local tax; (4) presen-
tation to some county or state official or board for purposes

of making the necessary levy after the budget has been

-76=

'~

98 One or more of

approved by the local b0ard of education.
these provisions may be required. In Michigan the budget
must be presented to the County Allocation Board.

As was mentioned in a previous chapter, Oak Park uses
the following schedule in presenting the budget. During
February, the business manager prepares adjusted budgets
upon approval of the superintendent. The total budget is
presented by the superintendent and business manager along
with the Superintendent's Advisory Council. The budget is
approved and adopted at the second meeting of the council
in March.

A budgetary document checklist prepared by a committee

39

of schoolmen is presented on the next two pages.

III. ADOPTION BY THE BOARD AND CERTIFICATION TO
TAX OFFICIALS 0F MONIES NEEDED

The procedure used by the Board of Education in approv-
ing and adopting the budget varies. Some schools adopt the
budget at the same meeting in which it is presented, others
have an interval in between. Many parts of the budget will
have been presented to the board for consideration during
the year. For example, the salary schedule will have been
approved previously and will be used in computing the largest

expenditure-—salaries.

 

38Ibid., p. 172.

39New York State Education Department, pp, cit., pp. 97-98.

FORMAT
l.
2.

4.
5.

10.
ll.

l2.

l3.

CONTENTS

I.

2.

Does the budget have an adequate cover?

Is the school district and period of time the
budget covers clearly and adequately indicated
on the cover?

Is there any possibility of a cover design to
show some desirable aspect of the educational
and administrative objectives of the schools?

Is the document of a size that is easily handled?

Does the document cater to the reading and tech-
nical level of the group to whom it will be
generally distributed?

Is the method of reproduction satisfactory from
a reading point of view?

Is there a table of contents?

Is the data organized in sections so that the
budget may be viewed quickly for its major
aSpects and in a more detailed manner by those
desiring to do so?

Will visible indices to special sections be
helpful?

Are the pages numbered?

Are exhibits and tables clearly identified and
apprOpriately captioned?

Are the accounts so coded that they can be
readily transferred to the accounting system?

Is due credit given to those who participated?

Can a letter of transmittal be effectively
included?

Has a statement of aims and objectives of the
educational program been included after approval
by the board?

Does the written statement refer to major imple-
mentations of the educational program as found
in various accounts of the budget?

10.

ll.

12.

l3.

14.

15.

16.

17.

-78:

Do the various itemized supporting statements
for proposed expenditures show by their organi-
zation the coordination of educational planning?
(This might apply particularly to textbooks,
guidance tests, workbooks, etc.)

Are the expenditures shown under the pr0per codes?

Is there a complete summary of receipts and ex-
penditures on one page so that the balanced nature
of the budget may be seen at a glance?

Is the resolution form indicating the extent to
which the budget detail will be proposed for
adoption included?

Are comparative statistics for recent years shown
for budget items? (receipts, expenditures, valu-
ations, tax rates, etc.)

Is there information regarding potential enroll-
ments, assessments and other trends included so
that the present budget can be viewed with an eye
to the future?

Is some explanation given as to what types of
school operations are covered under the general
accounting headings?

Is there a schedule of bonded indebtedness and
retirement included?

Is there a statement included to show the status
of reserve funds, if any?

Is the estimated tax rate that will be required
indicated and is there a definite caution that
this rate is tentative and depends on the tax
roll to be compiled?

Is there a brief explanation included showing
the taxpayer how he may compute his potential
tax bill?

Have the legal mandates for school budgeting
been taken care of?

If the budget is to be distributed to the public
at large, is there space where citizens can make
notes for their guidance at hearings or the
annual meeting?

Is there information included as to whom a person
might contact regarding questions and the times

during which he might do so?

-79-

The budget should be approved before the beginning
of the fiscal year so that it will be ready for use at the
beginning of the new fiscal period.

Legal provisions again may affect the procedure to
be followed in the formal adoption of the budget. In some
states the budget must also be submitted to the state board
of education or other local authorities for approval.

If the entire board is in harmony, the budget may be
accepted unanimously. However, if there is any division a
roll-call vote is recommended.

The board minutes should contain a memorandum of the
formal adoption of the budget. A brief statement indicating
that it was moved and seconded that the proposed budget be
ad0pted and a summary placed in the minutes is sufficient.

In districts requiring a public hearing, a more formal adop-
tion is necessary. A summary of the budget may be placed in
the minutes or the document may just be filed indicating

the date, volume, and page of minutes in which it was
adopted.

After the budget has been formally adopted by the board
of education, notification should be made to: (1) the school
personnel, (2) the public, and (3) the legal authorities.40

The principals, department heads, and other personnel
must be notified as to the amount of money allotted to their
particular unit so that the prOper responsibility can be

assumed.

 

4ODeYoung, pp. cit., p. 511.

-80-

The public is usually notified by means of a news-
paper article including the resultant tax rates and total
estimates.

In the State of Michigan the board minutes contain a
statement indicating the authorization to file a copy of
the budget with the County Tax Commission and requesting
a Specific millage for operating expense and debt service.
Upon approval of the Tax Allocation Board, notification is

sent to the City Clerk along with a copy of the budget.

CHAPTER V
ADMINISTRATION AND APPRAISAL OF PUBLIC SCHOOL BUDGETS

An effective budgetary program must include coordina-
tion and control, as well as planning. The administration
of the budget should: (1) provide coordination in that the
administrators of each unit will work together to fulfill
their part of the budget; (2) provide for the accomplishment
of the educational program by controlling the expenditures
as set forth in the budget; and (3) provide for amendments
to the budget to compensate for any obstacles. The board
should have authority to use any unanticipated revenues and
provide a contingent fund for any account shortages. This
chapter shall present some of the techniques used in admin-
istering and appraising the public school budget.

I. TRANSFERRING THE BUDGET TO THE
ACCOUNTING RECORDS

Once the budget is adopted, it must be referred to
constantly in order to keep the administration informed of
the conformance or lack of conformance to predetermined plans.
However, the budget estimates should serve as a guide rather
than a dictator.

The board of education usually passes the responsibility
for administering the budget on to the superintendent and
his staff. One method used is to immediately transfer the
budget estimates to the appropriate columns in the account
books. Major expenditures are usually referred to the

board of education for approval but the routine disbursements
-81-

-82-*
are more or less authorized by the budget estimate.

Encumbrance accounting should be used in order to have
effective budgetary control. As soon as contracts are let
or purchase orders signed, the obligations incurred should
be charged to the proper accounts an encumbrances. When
the bill is paid, the account is credited for the amount of
the original encumbrance and charged for the amount actually
paid.

The practice of entering the budget estimates at the top
of the appropriate columns in the accounting books together
with the use of encumbrances facilitates the comparison of
actual and encumbered figures with the amount originally
appropriated.

Depending upon the individual school systems, building
principals may be allocated a certain sum per capita for a
particular type of expenditure. The individual principal
and faculty have the authority to spend the amount allocated
for the items which are most needed and desired, as long as
they keep within the specific expenditure classification.

Individual school budgets provide a desirable aid in
administering the budget as a whole. They provide a control
over the requisitions submitted by the separate units. It
also makes administrators conscious of the responsibility
for adequate planning and participation in budget building,
which in turn promotes economy and efficiency.

The budget should be evaluated periodically and amended
if necessary. If the balance at the end of the current fis-

cal period is considerably less than the previous year, some

283-

adjustment must be made the succeeding year. This indicates
that for the current year, expenditures exceeded revenues.
To avoid a future deficit, either expenditures must be de-
creased or revenues increased.

If too much has been budgeted for one purpose and not
enough for another, the school board should have the authority
to transfer funds. However, some states prohibit such trans-
fers. Three provisions that are frequently made to meet
emergency needs are: (l) a contingent fund; (2) additional

taxation; and (3) borrowing money on credit.41

II. BUDGET APPRAISAL

A check list pertaining to the budget document was

presented previously. Some processes that should be evalu-

ated regarding the budgetary processes are:42

1. Has there been wide public participation in the
study of the purposes of the educational program
and the development of the educational plan?

2. Is there wide agreement in the community concern-
ing what the purposes of the educational program
should be?

3. Is there wide agreement in the community concern-
ing what the educational plan should be?

4. Have the superintendent and board cooperated
fully with all lay and professional groups making
bona fide studies of the schools?

5. Have the superintendent and board initiated lay
participation in the develOpment of the budget?

41
42

Mort and Reusser, pp. cit., p. 179.
Johns and Morphet, pp. cit., pp. 411-412.

10.

ll.

12.

13.

14.

15.

16.

17.

18.

19.

20.

—84—

Has adequate publicity been given to the
school budget during its develOpment?

Has development of the school budget been a
continuous process?

Has there been long-range planning as well
as year-to-year planning?

Was a budget calendar prepared and has it
been adequate?

Was the preliminary budget prepared in time
for the board to receive it several weeks before
it was ad0pted?

Did the board and the public have the oppor-
tunity to study alternate educational plans
for different types of educational services
and different levels of quality?

Did the board adopt the budget prior to the
beginning of the fiscal year?

Were the budget items entered in the account
books?

Was encumbrance accounting used for budget
control?

Were work plans developed to implement the
budget and were they developed?

Were instructional supplies on hand when needed
by the teachers?

Were requisitions handled without unnecessary
delay in the Central Office?

Did the superintendent provide the board with
monthly financial reports showing clearly the
financial position of the board with respect

to its budgets?

Were needed amendments made to the budget and
were those amendments made in accordance with
the law and the policies of the board? '

Was the budget administered with sufficient
flexibility to make reasonable provision for
changes in the requirements of educational
activities?

-85-~

21. Did the board avoid an operating deficit
during the fiscal period?

22. Were the budget document and the budgetary
processes evaluated during the year?

This checklist serves as a basis for evaluating the
budget document and processes within a school system. How-
ever, as was previously stated, budgeting must be a continuous
process. Periodic reports must be compiled showing a com-
parison of expenditures to date and the amount that was
originally appropriated by school and account. Any extreme
deviations should be explained.

An audit must be made at least once a year in which the
books, accounts, vouchers, etc. are carefully examined to
determine their correctness. The examination must be made
by an independent accountant with competent training and
experience, preferably a C. P. A. The audit report should
be published in a newspaper in condensed form--financial
statements. Additional copies should be made available to
the public upon request as soon after the audit as possible.
This helps to create public confidence in the administration.

The purposes served by the audit are (l) to report in-
dependently on the financial position and results of Operation
of the school district; (2) to establish and maintain safe-
guards for conserving and preserving public property; (3)

to detect errors; (4) to detect fraud;43 and (5) to have an

 

431n regard to Professor Tidwell's point (4), Statement
Np. 29 pp Auditing Procedure, issued by the American Institute
of Certified Public Accountants, states: ”The ordinary exami-
nation incident to the expression of an opinion on financial
statements is not primarily or specifically designed, and can-
not be relied upon, to disclose defalcations and other similar
irregularities, although their discovery may result."

 

 

-86-
independent accountant act as an adviser and representative
of the board.44

The auditor's report defines the scope of his investi-
gation and contains an expression of his opinion regarding
the accompanying financial statements of a particular school
district. Every year a copy of this financial report must:
be submitted and retained in the Office of the County Super-
intendent of each county in Michigan.

In 1954, the Superintendent of Public Instruction
appointed a committee consisting of certified public account-
ants, county and local school administrators, school business
managers, together with representatives of the Auditor
General's Department and the Department of Public Instruction
to formulate the necessary rules and regulations for auditing
the financial records of school districts. Among the members
were John Major, C. P. A., Arthur Anderson & 00., Detroit;
William Wittenburg, Auditor General's Department; and Harold
R. Brown, Department of Public Instruction. As a result of

this committee, a handbook entitled Program for Audit 2;

 

Financial Records 2: Michigan School Districts was published.
The audit report should consist of three sections:
(1) table of contents; (2) a letter of transmittal; and (3)

the financial section.45

 

443am B. Tidwell, c. P. A., Public School Fund Accounting,
(New York: Harper Brothers Publishers, 1950), p. 209.

45Program for Audit 2; Financial Records of Michigan
School Districts, (Lansing: Superintendent of Public
Instruction, 1954), p. 3-4.

 

.87.2

The table Of contents should indicate the page numbers
Of the letter of transmittal and of each financial statement
and schedule.

The letter Of transmittal should be addressed to the

District Board of Education. At the minimum, it should con-

tain the following information in sequencial order:46

1. A statement Of the period covered by the audit.

2. A statement of the SOOpe and limitations Of the
audit, including a statement as to whether or
not an examination has been made Of the child
accounting records of the district. This exami-
nation will usually be made by the County Super—
intendent of Schools.

3. A statement of the findings in the audit, includ-
ing an explanation Of the weakness in the account-
ing and reporting procedures and system Of internal
control together with recommendations in connection
therewith, and any other special comments which
should be directed to the attention Of the school
board.

4. Auditor's opinion. The form Of opinion would, of
course, depend upon the scope and limitations Of
the audit. Generally, this opinion should state
whether or not the balance sheet and summary of
fund operations for each fund fairly present the
financial conditions and Operations results Of
the funds in conformity with generally accepted
accounting principles applied on a basis consistent
with that of the preceding year.

The financial section should contain at least the
following financial statements and schedules:

1. A balance sheet for each fund as of the close
of the fiscal year.

2. A summary of fund operations for each fund,
showing Opening and closing fund balances and
a breakdown Of receipts and expenditures in
accordance with the classifications required
by the accounting records prescribed by the
State Superintendent of Public Instruction.

Ibid.

 

3.

-88-—

A summarized statement Of the receipts, expendi-
tures and fund balances of the various internal
activity and student accounts of the school
district.

A current tax summary showing amount of taxes
levied, collected and returned delinquent.
This summary should show the required infor-
mation separately for each type of tax levied
(Operating, debt service, etc.).

A schedule Of investments showing the school
fund which owns the investments, type of
securities, dates of maturity, costs, maturity
value and market value.

A schedule Of bonds and notes payable indi-
cating the purpose, dates Of issue and maturity,
interest rates, amount of issue, amount redeemed
previously, amount redeemed during the current
audit period, and the balance outstanding at

the close Of the audit period.

The auditor should be familar with the General School

Laws governing the operations of the various school districts.

He should have knowledge Of the overall activities of the

district and information relating to the following:

1.

2.

47

The location and organization Of the district
and its Officers.

The authorized salaries or other compensation
of the Officers and personnel.

The names and number of, and the authorized
tuition and transportation charges for, children
sent to or received from other schools.

The extent and kind of student body or other
internal school activities, (as well as Official
district activities) carried on by or in the
school; these activities include such things

as class dues and functions, school lunch pro-
grams, adult education classes, athletic acti-
vities, book sales, etc.

47Ibid.

-89-

The school board minutes should be reviewed and nota-
tions made of any actions taken pertinent to the period
covered by the audit. It should also be ascertained as to
whether or not the board holds regular meetings, has for-
mal minutes prepared and signed for all meetings showing
actions taken, and takes attendance of its members.

Correspondence with the State Department of Public
Instruction should be reviewed for any matter pertinent to
the audit. Inquiries should also be made to determine if
any special audits or investigations have been made that
might affect the conduct of the audit.

Upon consultation with R. H. Rosenau, C. P. A., who
is associated with Paul V. Engstrom and CO. of Detroit, I
find that the procedures outlined in Program £2£_A3di§_g£

Financial Records 2: Michigan School Districts are followed

 

 

rather closely. This firm is engaged by Oak Park School
District to prepare monthly financial reports. An extensive
audit is conducted annually. The report is then presented
at a public hearing and the financial statements are pub-
lished in the local newspaper. This same firm audits the
books Of Utica Community Schools.

All schools districts in Michigan are also required
to submit a statistical and financial report to the Super-
intendent of Public Instruction. A OOpy of this report

is presented on the next page.48

 

48Alexander J. Kloster, Finance Consultant, Department
Services Division, Michigan Department of Public Instruction,
Lansing.

M

FORM A AND B S—3-—-61—8000

ANNUAL STATISTICAL AND FINANCIAL REPORT

For the school year ended June 30, 1961
(This report must be filed with the County Superintendent of Schools not later than July 15, 1961)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dist. NO. or Name Township County
ACT under which district is organized (check): l:l 1st Class City, l:l 2nd Class City,
[3 3rd Class City, S 4th Class District, E Special, D Primary-
PART l—STATISTICAL DATA
DESCRIPTION 433% AMOUNT
1 1. Child Accounting: (To be reported by County School Superintendent or Superintendent of School)
2 A. Number on School Census May 31, 1961, 5—19 years, inclusive
3 B. Attendance in Public Schools located within district:
, 4 (1) Membership by grades at close of the year:
t 5 When school is closed in part indicate by X for grades closed
6 Kg.
: 7 1
I 8 2
9 3
I10 4
‘ 11 5
| 12 6
I 13 7
l 14 8
15 9
16 10
17 11
18 12
19 Others
20 TOTAL
21 Total Membership From Form D Elementary (K—6) or (K—8)
, 22 (Sept. 30, 1960 Audited membership) Secondary (7 - 12)
23 TOTAL
‘ 24 (2) Number Of pupils graduated from public high schools Boys
25 operated by the district in 1960—61: Girls
26 TOTAL
' 27 (3) Average daily attendance for the year:
28 (A) Elementary (K—6) or (K—8)
29 (B) Secondary (7 - 12)
3O (4) Number of non—resident pupils on 9—30—60: I
31 (A) Elementary (K—6) or (K-8)
32 (B) Secondary (7 — 12) r:
33 (5) Average number of pupils transported to another district:
34 (A) Elementary (K—6) or (K—8)
35 (B) Secondary (7 — 12)
36 (6) Number Of pupils attending public school in another district:
37 (A) Elementary (K—6) or (K—8)
38 (B) Secondary (7 ~ 12)
39 (7) Total number of days school was in session in 1960—61.
40 (8) Total number of days membership was counted in 1960—61.

 

41 2. (A) School personnel: Give total number of each type employed by the district:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

42 See instructions for further detail. A. Superintendents

43 B. Ass't Supts. or Bus. Mgrs.

44 C. Elementary Principal

45 D. Secondary Principal

46 E. Elementary Superv. and Consultants

47 F. Secondary Superv. and Consultants

j48 G. Librarians

.49 H. Guidance Personnel

350 I. Psychologists

51 J. Attendance Officers

52 K. Nurses

53 L. Secretaries and Clerks

,54 M. Maintenance Personnel

355 N. Plant Operation Personnel

56 0. Transportation Personnel

57 P. Other Personnel

.58 TOTAL

",59 (B) Number of teaching positions Elementary (K—6) or (K—8)

:60 Reported on Form D Sept. 30, 1960 Secondary (7 — 12)

[61 TOTAL

9'62 3. Schools and School Buildings in district:

63 A. Number of children on half day session at close of year due to lack of rooms.
64 B. Number of public schools: 1. Elementary

65 2. Junior High

66 3. *Junior—Senior High

67 4. Senior High
. 68 0.4 Number of non—public schools: 1. Elementary

69 2. Junior High

70 3. *Junior—Senior High

71 4. Senior High

72 A Junior-Senior high school is a secondary school organized on a Junior-Senior basis and ad-
73 ministered as one unit. More than one school may be housed in the same school plant or building
74 as in the case of an elementary school and a Junior-Senior high school.

75 D. Number of new buildings completed during year.

76 E. Number of additions completed during year.

77 F. Cost of new construction indicated in lines D & E above. (Report in even dollars.)
78 (1) Sites 3
79 (2) Buildings

80 (3) Equipment

81 G. Estimated value Of school properties. (Report in even dollars)

82 (1) Land $
83 (2) Buildings

84 (3) Equipment

Name of School District, County

 

 

 

Page 1 \

IBM Code

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—]— DESCRIPTION gggfla AMOUNT
1 I H. Insurance coverage:
2’ **Buildings — Fire Term yrs. 19_to 19
3 1. *Amount 3
4 2. Annual Premium
5 3. *Amount of Loss Sustained
6 4. *Amount of Claim Collected
7 Contents — Fire Term yrs. 19__to 19__—
8 1. *Amount 5
9 2. Annual Premium
10 3. *Amount of Lossz Sustained
11 4. *Amount of Claim Collected
12 Tornado Term yrs. 19_—to 19
.13 1. *Amount 5
14 2. Annual Premium
15 3. *Amount of Loss Sustained
l6 4. *Amount of Claim Collected
17 ***Other Term yrs. 19_—to 19
18 1. *Amount 5
19 2. Annual Premium
20 3. *Amount of Loss Sustained
21 4. *Amount Of Claim Collected
22 Totals
23 1. Amount $
24 2. Annual Premium
25 3. Amount of Loss Sustained
26 4. Amount of Claim Collected
27 *Report in even dollars. ** Report buildings and contents under buildings if not kept
28 separately. *** Explain kind of insurance.
29
3O 4. Total amount of treasurer's bond for current year $
31 cost per year
32 5. District debts
33 Obligations: 1—A Bonds outstanding—debt orig. before Dec. 8, 1932 S
34 l—B Bonds outstanding—debt orig. after Dec. 8, 1932
35 l—C Total bonds outstanding
36 2 Certificate of indebtedness — after Dec. 8, 1932
37 3 Tax notes — after Dec. 8, 1932
38 4 Other, including current bills - after Dec. 8, 1932
39 5 Ic+2+3+4TOTAL $
40
41
42 6. A. State equalized valuation for 1960 (Report in even dollars) $
43 B. Tax report - taxes levied and collected
44 1. A. Voted increase (Mills) General fund
45 Building and site fund
46 Debt retirement fund
47 TOTAL
48 B. For what years: General fund 19__—to 19__
49 Building and site fund 19__to 19__—
50 Debt retirement fund 19 to 19
51 C. Mills actually levied General fund
52 Building and site fund
53 Debt retirement ftmd
54 TOTAL
55 2. Amount of tax levied General fund $
56 Building and site fund
57 Debt retirement fund
58 TOTAL $
59 3. Amount of 1960 tax collected General fund $
60 Building and site fund
61 Debt retirement fund
62 TOTAL $
63 4. Amount of 1960 tax uncollected General fund $
64 Building and site fund
65 Debt retirement fund
66 TOTAL ‘5
67 5. Amount of delinquent tax July 1, 1960 General fund $
68 Building and site fund
69 Debt retirement fund
70 TOTAL $
71 6. Amount of delinquent tax collected General fund 3
72 during year Building and site fund
73 Debt retirement fund
74 TOTAL 5
75 7. Delinquent tax uncollected General fund 5
76 (4 +5—6) Building and site fund
77 Debt retirement fund
78 TOTAL $
79 8. Amount charged off or adjusted General fund $
80 Building and site fund
81 Debt retirement fund
82 TOTAL ‘5
83 9 Total amount delinquent June 30, 1961 General fund 3
84 (7 minus 8) Building and site fund
85 Debt retirement fund
86 TOTAL $
87 7. (A) Is library established by vote of the people: Yes D No [:1
88 (B) Number of volumes added this year
89 (C) Total volumes in library
90 8. Are free textbooks furnished to: (a) Indigent children only
91 (b) All elementary grades
92 (c) All secondary grades
93 (d) To none
94

 

 

 

 

Name of School District County

 

 

 

 

Page 2 IBM Code

oo\\ NO|_LdlEOSEG __‘__l_1__
a

\\\\\\\\ g

\ \
LNnOW‘d \ 53. .

PART II—FINANCIAL REPORT

 

 

 

 

Part II, Financial Report, is divided into three parts: General fund, Receipts and Expenditures: Building and Site Fund,
Receipts and Expenditures: Debt Retirement Fund, Receipts and Expenditures. The General Fund, Receipts and Expenditures
are to be filled in by ALL school districts. The Building and Site and Debt Retirement, Receipts and Expenditures, can be
omitted unless the district has a Building and Site thd or Debt Retirement FLmd.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DESCRIPTION C‘ggflE AMOUNT
1 200—GENERAL FUND RECEIPTS ____fi _ _7
2 ___.1_11__ , 1 _ 1,1,1n1111_11____¢ 1
3 210 General Fund Balance on—July 1, 1960 A
4 Cash Balances:
5 211 General Operating Fund $
6 212 Primary FLuid
7 213 State School Aid Fund
8 214 Library Fund
9 217 Revolving Funds
10 219 Other General Fund Balances
11
12 Investments: (Type and Purchase Price)
13
14
15
16 Total General Funds Balance on July 1, I960 04 $
17
18 REVENUE RECEIPTS
19
20 220 Revenues from General Property Tax
21 221 Current Tax Collections $
22 222 Delinquent Tax Collections
23 227 Interest on Delinquent Taxes
24 Total General Fund Property Tax Receipts 06 ‘5
25

 

26 230 Revenue from Grants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27 231 State Primary Fund 08 $
28 232 State School Aid 1960—61 10

29 233 State School Aid 1959—60 11

30 234 Library Fund 12

31 235 Hardship School Aid 14

32 236 NDEA 15

33 237 Vocational Education 16

34 238 School Land Grants 18 :—
35 239 Other Grants 20

36

37 240 Revenue from Services

38 241 Tuition 22

39 242 Transportation Fees 24

40

41 250 Other Revenue Receipts 25

42

 

43 260 Revenues from Intermediate Sources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44 261 Receipts from County Special Education Tax 26
45 262 Other Revenue Intermediate Sources 27
46
47 Total Revenue Receipts 28 $
48
49 NON-REVENUE RECEIPTS
50
51 280 Non-Revenue Receipts
52 281 Short Term Loans 5
53 282 Sale of Property
54 283 Collections on Loans to Revolving Funds and Student Activities
55 285 Transfers from Building and Site Fund, or Debt Retirement Fund
56 287 Revolving Fund Receipts
57 289 Other Non-Revenue Receipts
58 Total Non-Revenue Receipts 30 s
59 GRAND TOTAL OF GENERAL FUND RECEIPTS 32 $
60
61 Total Available Funds (Line 16 plus Line 59) 33 i
62 BEGIN GENERAL FUND DISBURSEMENTS ON PAGE 4 s
63
64 i— s———~—— _ v— F“ iii “1 ATE 7
65 1__ 7
66 GRAND TOTAL - GENERAL FUND DISBURSEMENTS (From line 79 Page 4) $
67
68 210 General Fund Balance on June 30, 1961
69 Cash Balances:
70 211 General Operating Fund 5
71 212 Primary Fund
72 213 State School Aid Fund
73 214 Library Fund
74 217 Revolving Funds
75 219 Other General Fund Balances
76 Investments: (Type and Purchase Price)
77
78
79
80 Total General Fund Balance on June 30, I96] 62 55
81
82 Total General Fund Disbursement plus Balance on June 30, I961 63 s
83 (Line 82 should equal Line 61)
84
85
86
87

Name of School District County

Page 3. IBM Code

 

 

300—GENERAL FUND DISBURSEMENTS

AMOUNT

 

l l
|

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

l 310 Administration l

2 311 Salaries of Board of Education — I A 34 j

3 312 Salaries of Superintendent and Assistants

4 313 Salaries Of Business Administrators

5 314 Clerical Salaries

6 315 Administrative Supplies and Expenses

7 316‘ Census and Compulsory Attendance

8 317 Elections

9 319 Other Administrative Expense
10 Total Administration Disbursements 36
11

12 320 Instruction

13 321 Salaries of Supervisors

14 322 Salaries of Principals

15 323 Salaries of Teachers 38
16 324 Clerical Salaries

17 325 Teaching Supplies and Expenses

18 326 Tuition Expense 39
19 327 Textbooks

20 328 School Library

21 329 Other Instruction Expense

22 Total Instruction Disbursements 40
23

24 330 Operation Of School Plant

25 331 Wages

26 333 Fuel and Utilities

27 335 Operating Supplies and Expense

28 339 Other Operating Expense

29 Total Operation Disbursements 42
30

31 340 Maintenance of School Plant

32 341 Maintenance of Grounds

33 342 Maintenance of Buildings

34 343 Maintenance Of Furniture and Equipment

35 349 Other Maintenance Expense

36 Total Maintenance Disbursements 44
37

38 350 Fixed Charges

39 351 Rent

40 352 Insurance

41 353 Interest on Short Term Loans

42 359 Other

43 Total Fixed Charges Disbursements 46
44

45 360 Auxiliary Services

46 361.1 Transportation Salaries

47 361.2 Other Transportation Expense

48 363 Revolving Fund Deficits

49 364 Health Service

50 365 School Recreational Activities

51 369 Other Auxiliary Expense

52 Total Auxiliary Service Disbursements 48
53 Total Current (Operating) Expenses (sum of items 311 through 369) 50
54

55 370 Capital Outlay

56 371 Grounds

57 372 Buildings

58 373 Furniture and Equipment

59 374 Transportation Equipment

60 379 Other Capital Outlay

61 Total Capital Outlay Disbursements 52
62 Total Disbursements (3” Through 379) 54
63 Reconciliation To Cash Disbursements

(This item to be omitted by ALL primary districts. Also by other districts if they report only receipts
and expenditures received or paid out in the fiscal year.)
Deduct: Items distributed to current year budget expenditures, for which the cash was dis-
bursed in a prior period, and items unpaid at the close of the fiscal school year.

64 From Inventories

65 From Prepaid Budget Accounts

66 From Unpaid Warrants

67 TOTAL RECONCILIATION 56
68 Total Net Disbursements

69

70 380 Supplemental Disbursements

71 381 Short Term Loans

72 383 Loans To Revolving Funds

73 385 Transfers To Building and Site Fund, or Debt Retirement Fund

74 387 Revolving Fund Disbursements

75 388 Community Services

76 389 Other Supplemental Disbursements

77 Total Supplemental Disbursements 58
78

79 GRAND TOTAL - GENERAL FUND DISBURSEMENTS 60
80 Continue General Fund Disbursements on Page 3 Line 66

81

82

83 _____ 1__
84 1.111111

85

86

Name of School District County
Page 4 IBM Code

 

 

 

 

400—BUILDING AND SITE FUND RECEIPTS

AMOUNT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 410 Building and Site Fund Balance on July 1, 1960

2 Cash Balance:

3 411 Cash on Deposit

4 Investments: (Type and Purchase Price)

5
i 6
I 7
:1 8 Total Balance on July 1, I960 64
l 9 420 Revenue From Building and Site Property Receipts
i10 421 Current Tax
I11 422 Delinquent Tax
'12 427 Interest on Delinquent Tax

13 Total—Building and Site Property Tax Receipts 65
14 430 Grants 68
15 440 Insurance Settlements 70
16 450 Sale of District Bonds 72
17 482 Sale of Property 74
18 485 Transfers from General Fund or Debt Retirement Fund 76
19 490 Other Receipts 78
20 Total Building and Site Fund Receipts (accts 421 through 490) 79
21 Total Building and Site Fund Receipts plus Balance on July 1, I960 80
22

23 500—BUILDING AND SITE FUND DISBURSEMENTS

24 570 Capital Outlay

25 571 Grounds

26 572 Buildings

27 573 Furniture and Equipment

28 579 Other Capital Outlay

29 Total—Capital Outlay Disbursements

30 585 Transfers to General Fund or Debt Retirement Fund

31 590 Other Building and Site Disbursements

32 Total Building and Site Fund Disbursements (Sum of Accts. 571 through 590) 81
33 410 Building and Site Fund Balance on June 30, 1961

34 Cash Balance:

35 411 Cash on Deposit

36 Investments: (Type and Purchase Price)

37

38

39

40 Total Building and Site Fund Balance on June 30, I961 82
41 Total Building and Site Fund Disbursements plus Balance on June 30, I961 83
42 I

43 600—DEBT RETIREMENT FUND RECEIPTS

44 610 Debt Retirement Balance on July 1, 1960

45 Cash Balance:

46 611 Cash on Deposit

47 Investments: (Type and Purchase Price)

48

49

50

51 Total Balance on July 1, I960

52 REVENUE RECEIPTS

53 620 Revenue from Debt Retirement Property Tax

54 621 Current Tax Collections

55 622 Delinquent Tax Collections

56 627 Interest on Delinquent Taxes

57 Total Revenue from Debt Retirement Property Tax 86
58 640 Revenue from Interest on Investments 88
59 660 Other Revenue Receipts 90
60 Total Revenue Receipts (Sum of accounts 621 through 660)

61 680 Non—Revenue Receipts

62 685 Transfers from General Fund or Building and Site Fund

63 689 Other Noni-Revenue Receipts

64 Total—Non Revenue Receipts 92
65 GRAND TOTAL OF DEBT RETIREMENT RECEIPTS 93
66 Total—Debt Retirement Receipts plus Debt Retirement Cash Balance on July 1, I960

67

68 700—DEBT RETIREMENT FUND DISBURSEMENTS

69 720 Debt Retirement

70 721 Principal on Debts

71 722 Interest on Debts

72 729 Other Debt Retirement Disbursements

73 Total—Debt Retirement Disbursements 94
74 780 Supplemental Disbursements

75 785 Transfers to General Fund or Building and Site Fund

76 789 Other Supplemental Disbursements

77 Total—Supplemental Disbursements 96
78 Total Debt Retirements Fund Disbursements (sum acct 721 through 789) 97
79 610 Debt Retirement Balance on June 30, 1961

80 Cash Balance:

81 611 Cash on Deposit

82 Investments: (Type and Purchase Price)

83

84

85 Total Debt Retirement Balance June 30, I961 98
86 Total Debt Retirement Fund Disbursements plus Balance on June 30, I961

87 (The sum of accounts 700 series plus June 30, 1961 balance)

Name of School District County \
Page 5 IBM Code

 

 

 

SECRETARY'S SUMMARY OF FUND BALANCES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fund Balances as of June 30, 1961 Cash Investments Total
General Fund ...................................................... S $_____1_,_11_1 __ 1 , 1, S, 1 ,1 _ _ 111 _
Building and Site Fund ................................... ,1, _ ____b1 1m___ #11
Debt Retirement Fund ..................................... -_
Total Fund Balances, June 30, 1961 (.1) ,- _
Signed
Secretary
TREASURER'S VERIFICATION OF BANK BALANCES
Total Bank Balances (per bank statement) June 30, 1961 ...................................... $
Deduct total outstanding checks as of June 30, 1961 ...............................................
Net Balance on Hand in Banks—June 30, I961 ..................................................................................................... $ (2)
Signed 1 _1____
Treasurer

Total Cash Balances (1) and Net Balance on hand in Banks (2) should agree.

.********

We, the undersigned members of the Board of Education of

school district, hereby

certify that we have read and are familiar with this statistical and financial report for the year 1960—61 and that the trans-
actions shown herein have been made in accord with formal action authorizing the same.

 

 

 

 

 

 

 

 

********

BOARD OF EDUCATION ELECTED FOR THE SCHOOL YEAR 1961-62

President Trustee

Secretary Trustee I

Treasurer Trustee —— 7 ‘—
Trustee Trustee

 

Check
One

Name

(Please Print)

Address Tel. NO.

Term Expires

 

President

Mr.
Mrs.
Miss

 

Secretary

Mr.
Mrs.
Miss

 

Treasurer

Mr.
Mrs.
Miss

 

Trustee

Mr.
Mrs.
Miss

 

Trustee

Mr.
Mrs.
Miss

 

Trustee

Mr.
Mrs.
Miss

 

Trustee

 

Mr.
Mrs.
Miss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

  

 

  

 

  

 

  

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SPECIAL REPORT '33): AMOUNT
1 1. Number Of pupils initially enrolled by grades in non—public schools located within district:
2 (Use Sept. 30, 1960 count date)
3 Kg.
4 1
5 2
6 3
7 4
8 5
9 6
10 T _ 7
ll 8
12 9
13 10
14 11
15 ”T '” 12
16 Other
17 TOTAL
18
19 2. Number of teachers in non-public schools located within the district:
20 Elementary (K—6) or (K—8)
21 Secondary (7 — 12)
22 TOTAL
23 ___
Name of School District County
Page 6 ‘ IBM Code

 

-98-

Besides the reports which are required by law, the
school district should prepare periodic statements to ascer-
tain if expenditures are conforming to estimated figures or
if there are deviations, how much and why. The budget
should not be thought of as an iron clad pattern to be
followed but rather as a guide. It is almost an impossi-
bility to anticipate future needs exactly. As a matter Of
fact, Oak Park had anticipated the need for one additional
home economics teacher and one more teacher in the business
department and had made provisions for the same in next year's
budget. However, the student enrollment in each of these
departments did not meet expectations and these additional

staff members will not be necessary.

CHAPTER VI
SUMMARY AND CONCLUSIOIS
I. SUMMARY-

Effective budgeting consists Of three phases-~planning,
coordination, and control. Basic policies and objectives
must be determined and_a definite type of organization sup—
ported. An organizational chart should clearly define the
line of authority and.specifically indicate responsibility.
This chart together with a written list of duties for each
member of the organization should be distributed in the
form Of a manual.

The specific policies and philosophy supported by a
school district will be reflected in its educational program
which in turn will have a bearing on expenditures. For
example, if a school system supports a program for the men?
tally retarded and at the same time provides advanced classes
for the superior student, the number of personnel will be
increased and the student-teacher ratio lowered. Districts
maintaining such programs require Special teachers. If
experienced and well qualified teachers are preferred, the
salary schedule will probably contain a provision which will
encourage personnel to remain in the system.

Approximately seventy-five to eighty per cent of the
budget is allocated for salaries--teachers, administrators,
custodians, bus drivers, and other personnel. This accounts

for the largest item of expenditure in the school's budget.
' -99-

_HelOO-

In the short run, the budget of a school system is for
the most part fixed. Instruction accounts for approximately
67 per cent of the total budget, administration 3 per cent,
operation and maintenance 14 per cent, and fixed charges
I per cent. The remainder of the budget goes for capital
outlay, health, recreation, insurance, etc. Approximately
75 per cent of the total budget is expended for salaries of
one type or another.

The most valuable aid in forecasting expenditures is
past experience. In determining teacher requirements and
room needs, two factors must be considered-~the total number
of students and the desired student-teacher ratio. Both
teacher requirements and room needs can be computed by
dividing the total student population by the desired pupil-
teacher ratio.

Once the budget has been approved and adopted by the
Board of Education, a cepy must be submitted to the County
Allocation Board.

Periodic reports should be prepared, preferably monthly,
to compare actual expenditures with the amount originally
appropriated. All deviations should be explainable.

The State of Michigan requires that each school dis-
trict must have an annual financial audit by an agency
independent of the school. A copy of the audit report must
be submitted and retained in the Office of the County Super-
intendent. Each school district must also file a Statistical

and Financial Report with the Superintendent of Public

Instruction each year.

2101-

II. CONCLUSIONS

For the most part, the expenditures Of a school dis-
trict are fixed in the short run. Instruction, administration,
operation and maintenance accounting for approximately 84
per cent Of the budget.

The enrollment in the public schools is increasing so
rapidly that the local government cannot bear the burden of
rising costs. Although the percentage Of revenue furnished
by the local government is decreasing, the amount dollar wise
is increasing. Additional assistance is desperately needed
from the state and federal governments. Federal aid with
limited control would not impair our present educational
system. More buildings and staff will be needed as enroll-
ment increases. Salaries of school personnel must be increased
in order tO maintain qualified persons. These increased costs
cannot be met without some additional aid.

There is a need for a standard accounting system for
all schools, which at the present time does not exist. This
would improve budgeting, facilitate comparison of financial
information among communities and states, improve the relia-
bility Of reports to the public, and provide a more sound
basis for cost analysis. The accounting handbook published
by the United States Office of Education, in an attempt to
present a standardized system Of accounts and terminology,
is deficient in certain areas. It only outlines expenditure

and revenue accounts and makes no provision for encumbrance,

-102-

net worth, liability, or asset accounts. Although this a
step in the right direction, I believe the handbook must be
expanded.

The legal requirements for budget filing, auditing and
reporting should be consistent throughout the states. This
it seems to me would be of extreme importance if Federal aid

to education is ever passed.

 

JEL‘ A;

BIBLIOGRAPHY
Atwood, Lloyd. Assistant Superintendent, Ferndale City
Schools, Ferndale 20, Michigan.

Briggs, T. H. Secondary Education. New York: The Mac-
millan Company, 1933.

 

Buck, A. E. Public Budgeting. New York: Harper &
Brothers, 1929.

 

Burke, Arvid J. Financipg_Pub1ic Education ifl the United
States. New York: Harper & Brothers, 1951.

 

 

Campbell, R. G. State Supervision and Regulation 2f
Budgetary Procedures 13 Public School Systems. New
York: Bureau of Publications, Teachers College,
Columbia University, 1925.

 

 

 

Carr, W. G. School Finance. California: Stanford Uni-
versity Press, 1933.

 

Committee of the National Conference of Professors of
Educational Administration. Problems and Issues 32
Public School Finance. New York: Bureau of Publi-
cations, Teachers College, Columbia University, 1952.

 

 

Cubberly, Ellwood P. Public School Administration. New
York: Houghton Mifflin Company, 1929.

 

DeYoung, Chris A. Budgeting 13 Public Schools. New York:
Doubleday, Doran, & Company, Inc., 1936.

 

 

Engelhardt, N. L. and Engelhardt, F. Public School Business

 

Administration. New York: Bureau of Publications,
TeaOhers College, Columbia University, 1927.

 

Gallagher, Ralph P. "Some Relationships of Symbiotic Groups
to Adaptability in Public Schools and to Other Related
Factors." Manuscript, Teachers College Library,
Columbia University, 1949.

'Herick, McLeary, Clapp, and Bogner. From School Program 33
School Plant. New York: Henry Holt & CO., 1956.

 

 

Jelneck, William. Business Manager, Utica Community Schools,
Utica, Michigan.

Johns, Roe L. and Morphet, Edgar L. Financing the Public
Schools. New Jersey: Prentice-Hall: Inc., I960.

Kloster, Alexander J. Finance Consultant, Department Ser-
vices Division, Michigan Department Of Public Instruc-
tion, Lansing.

Knezevich, Stephen J. and Fowlkes, John Guy. Business
Management of Local School Systems. New Yofk: Harper

& Brothers,_I9EO.

Linn, Henry H. Practical School Economies. New York:
Bureau of Publications, Teachers College, Columbia
University, 1954.

 

Matthews, Dr. Arthur. Principal, Oak Park Senior High
School, Oak Park 37, Michigan.

Mort, Paul R. Principles pf School Administration. New
York: McGraw-Hill, 1946.

 

Mort, Paul R. and Reusser, Walter C. Public School Finance.
New York: McGraw-Hill, 1951.

New York State Education Department, Bureau Of Field
Financial Services. Budget. New York: State Education
Department, 1956.

Oak Park Board of Education. 'Adopted Policies and Re orts
2f the Board 9f Education and Staff from 1952 £2_I958.
Michigan: IOak Park Board of Education.

 

Otto, Henry J. Elementary-~School Organization and Admin-
istration. New York: Appleton-Century Crofts, Inc.,

1954.

Pepper, Dr. James N. School Budget 1960-6 . Michigan:
Oak Park District Schools, ol.

PO ulation, Pro ram, and Financial Characteristics of the
OaE ParE District SchOols. Michigan: Oak ParE_Board
OT Education,il960.

Pro ram for Audit 2; Financial Records of Michi an School
Epstricts. Michigan: Department Of PUBllC Instruction,
1954.

.Reede13 Ward G. School Boards and Superintendents. New
York: The Macmillan Company, 1954.

 

 

 

 

 

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a ‘ ’
. 0 Q
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F d - ' I I . ' ~ ’ ‘ I .
. a - v ' T I 1 A I ’
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o
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Revised Teachers' Manual. Michigan: Oak Park District
Schools, 1960.

Rosenau, Robert, C. P. A. Paul V. Engstrom & CO., Kales
Building, Detroit 26, Michigan.

Rosenstengel, W. E. and Eastmond, Jefferson N. School
Finance-~Its Theory and Practice. New York: The
RonEId—Press Company, 1957}

Sumption, M. R.; Miller, Van; and Wochner, Ray.
g; Community School Administration. Illinoi
versity, 1938.

Manual

‘g
s : Uni-

 

 

Tax Institute Symposium. Financing_Education 13 the Public
Schools. Princeton: Tax Institute, Incorporated,

 

 

Tidwell, Sam B., C..P. A. Public School Fund Accounting--

Principles and Procedures. New York: Harper & Brothers
Publishers, 1965.

 

Twente, John W. Budgeting Procedure for g_Loca1 School
System. Vermont: Capital City Press, 1922.

 

 

United States Department of Health, Education, and Welfare.
Financial Accounting for Local and State School
S stems. hashington: United States Government Print-
ing Office, 1957.

Utica Community Schools. Preliminary Budget 1961-62.
Michigan: Utica Board of Education, I961.

 

Weber, 0. F. Problems ip_Public School Administration.
New York: D. Appleton-Century CO., Inc., 1950.

 

 

 

 

HJEKIJIIFHJHLI—

 

PPENDIX

PAUL V. ENGSTROM & CO.
Certified Public Accountants
1820 Kales Building
Detroit 26, Michigan

August 7, 1959

To the Honorable President and
Members of the School Board
Utica Community School District

Utica, Michigan

Gentlemen:

We have examined the balance sheets of the General
Fund, Building and Site Fund and Debt Retirement Funds as of
June 30, 1959 and the related statements of receipts and dis-
bursements of the Utica Community School District of Utica,
Michigan.

As a corollary to the foregoing, we have examined the
statements of receipts and disbursements of the Auxiliary
Funds (Cafeteria and Internal Activities) for the same period.

Except as stated in the following paragraphs our exami-
nation was made in accordance with generally accepted auditing
standards and accordingly included such tests of the account-
ing records and such other auditing procedures as we considered
necessary in the circumstances.

An audit of child accounts was made by the Office of the
Superintendent, Macomb County Board of Education, pursuant to
the provision of Act 312 of the Public Acts of 1957, State of
Michigan. Enrollment figures were verified per letter signed
by Mr. Harold B. LeFevre, Superintendent of Schools, dated
July 24, 1959.

In accordance with the accounting practices followed by
school districts the accounts are kept on a cash basis.
Allowance has not been made for depreciation of educational
plants and the liability on outstanding bond indebtedness is
Stated as to principal balance only.

 

 

(I

In our opinion, the accompanying balance sheets of the
General Fund, Building and Site Fund, Debt Retirement Funds
and related statements of receipts and disbursements, as
well as the statements of receipts and disbursements of the
Auxiliary Funds, present fairly the assets and liabilities
of the Utica Community School District at June 30, 1959 and
its receipts and disbursements on a cash basis for the year
then ended, in conformity with accounting procedures for
school districts recommended by the Michigan Department of

Public Instruction applied on a basis consistent with that
of the preceding year. '

Respectfully submitted,

School District of the City of Ferndale
Ebrndale 20, Michigan

NON-SMY I'IEIB T0 HS CONSIIERED IN TIE 1958-59 BUDCET

Comparison of Amounts Requested and appropriations Hide

In the 1955-56 budget, all requests of all principals, custodians, and certain
others were entered in the budget submitted to the Board for study. That year
requests were $573,783 of which $463,909 or about 81% was actually budgeted.
Since that year a preliminary screening of all requests has been.made by the
Administrative Council. That screening of items has resulted in the deletion
of many of the original requests and a smaller total.

In 1956-57, requests were $459,769 and appropriations made were $467,271; in
1957-58, requests were $485,828 appropriations, $512,324, but $30,000 of that
total was for a boiler contingency, so the comparable total was $482,324.

 

1956-57 1957-58 1958-59

Account Request: ApprOpr. Requests Appropr. Requests Appropr.
315-1 3,795 3 3,795 $ 6,310 $ 6,885 9 7,625 8 7,625
315-2 4,738 4,738 6,368 5,000 6,650 6,950
315-3 1,200 1,200 1,200 1,200 1,200 1,200
316-1 3,018 3,490 3,300 3,200 3,637 3,495
317 2,000 2,000 2,000 2,500 2,750 2,750
325-1 44,500 45,000 53,176 53,200 55,000 57,200
326-1 11,426 11,426 13,380 13,580 15,192 15,193
326-2 1,786 1,800 3,067 3,067 2,098 2,098
327-1 18,000 20,000 20,000 32,000 31,976 32,000
327-2 6,565 6,565 7,548 7,500 8,500 8,500
329-1 1,000 1,000 1,000 800 800 800
329-2 6,000 6,000 7,000 10,000 10,000 10,300
331-4 New 1,025 1,200 1,600 2,100 2,100
333-1 42,675 43,000 49,000 51,500 80,000 80,000
333-2 4,250 4,250 4,250 4,250 7,500 7,500
333~3 1,200 1,200 1,450 1,450 2,500 2,500
333-4 27,000 27,500 30,000 30,000 50,000 50,000
335 10,414 10,400 10,631 10,400 12,030 12,030
333-6 6,500 6,500 6,500 6,700 9,600 9,600
341 6,380 6,380 7,150 6,425 19,955 19,080
342 53,070 53,070 36,920 38,400 25,110 24,910
343 55,987 56,567 63,920 85,163 67,802 69,362
351 1,425 ' 1,425 1,425 3,000 3,000 3,000
352-1 4,700 4,700 11,313 7,554 17,240 17,475
352-2 1,000 1,000 1,000 1,000 1,000 1,000
361 11,250 11,250 13,710 15,000 28,535 30,035
362 -- -- 3,852 3,852 3,852* 2,889
364 13,243 13,243 13,243 13,598 17,000* 17,000*
365 23,915 23,916 26,051 26,140 29,000* 29,000:
371 33,165 33,090 6,460 6,260 4,920 3,770
372 21,980 23,376 21,555 21,855 9,290 8,815
373 37,497 38,365 34,847 37,320 31,227 30,927
374 ---- ---- --- -- -—- ----

379 -- ---- 4,925 1,925 --- ----

Totals $459,769 $467,271 $485,828 $512,324 $567,089 $569,104

*Estimated

Subject to revis'

 

1‘

,1

;‘

——._.—-

 

 

 

 

 

 

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