ACTIVITY 3 FOR FINANCIAL MANAGEMENT IN SCHOOLS:

1. Where can a principal get advice on budget preparation?

- The principal prepares the school budget in consultation with board of management,
vice principals, Heads of departments and senior teachers as well as subject teachers
who usually make requisitions of teaching materials so that proper estimates can be
made for instruction. The chairman of the school board also plays a significant role as
he is the person who has to approve and sign all documents pertaining to expenditure
from the budget. He signs on behalf of the entire school board.
2. What key things should I focus on when preparing a budget?
- The following are some of what should I looked at to make a plan for the budget.
a) Priorities for the particular year.
b) Ongoing programs that started previously and will still be continuing. E.g. the
repairing of school buildings and replacement of chairs.
c) One shot initiatives. In example, a new computer for the library.
d) Instructional materials/ facilities. Examples of this could be classroom materials,
money for seminars and field trips, public utilities, maintenance of school plants, as well
as other goods and services.
In order to make a logical projection of the new budget the following factors will be
looked at from the previous years budget.
a) The accomplishment of the developmental plan. For example, my school has a threeyear development plan; therefore the principal along with the other persons who
prepares the budget would look at what was accomplished in this plan and what is to be
done in the new year in relation to the plan.
b) Factors that restrict the output of the budget (why didnt we achieve all the things we
had planned for from the revenue that was available is a likely question that could be
asked.)Restricting factors could be the projected amount of the school and book rental
fee was not collected.
c) Expenditure for the year that has just ended. Is there a surplus or a deficit existing,
this is important to know before the preparation of the new budget.
The principal along with the persons mentioned above will then calculate the money that
is expected from sources such as the school fee, book rental scheme, private

organizations which may come in the form of grants and scholarships, as well as
subsidy from government to cater for all areas within the school. Knowing this estimated
revenue will exist so that planning can be more logically done.
The principal will then host meetings with all categories of workers within the school
(this meeting is likely to be done according to the different areas in the school).
3. How do I know if i'm spending the right amount on the various elements of the
budget?
The school's budget is done on an annual basis, and is prepared ahead of the financial
year that begins every June through May. The first step is to analyze the previous year's
budget. In so doing, the principal can identify the shortfalls in the budget and ascertain
whether or not the needs of that year were appropriately met. The principal should also
see to it that: (1) expenditures are recorded in the appropriate accounts, (2) inventory is
kept of all materials purchased from public funds, and (3) an internal auditor is
appointed by April of each school year, and an up-to-date cheque disbursement book is
accurately maintained.
4. What general advice would you give a newly-appointed principal about
preparing and delivering to budget?
- It must be noted however, that there are some important elements that must be carried
out by the newly appointed principal and all persons who prepare and administer a
budget. The newly appointed principal should outline the function of the budget as it
relates to the school because:
a) It ensures the achievement of the schools objectives- our plans that required the
spending of money is taken care of by the budget.
b) The budget compels persons to plan- the principal as well as those people involved
have to ensure that they plan in order to spend from the budget.
c) It provides a framework for responsibility of accounting and to establish a system of
control. Individuals such as the principal those involved are highly accountable for
proper documentation of expenditure. Persons have to spend according the revenue
available hence their spending is controlled.
d) It motivates employees to improve on the performance- responsible persons will
ensure that books are up to date to reflect both revenue and expenditure.
On the other hand, the principal will ensure that the best measure is put in place to
collect money such as school fee and book rental fee. This money is usually included in
the projected revenue.

In order for a budget to be effective there must be a budget period this is the time span
that the budget will cover. At my school the budget period is one year, June to May .Of
utmost importance is that the planning of the budget must be done ahead of time so that
money can be releases to meet the expenditure period competitive teacher salaries.
5. What are the most common pitfalls?
-Good financial management of school is a complex task. Whether we like it or not,
there are times certain problems arises that cause challenge to our school finances.
The following are some of the examples:
1. Budget oversight becomes extremely difficult when several expenditure categories
grow significantly from year to year. For example, rising special education and health
insurance costs are causing great concern among school districts. The high cost of
special education combined with a decreased funding (currently at one fifth of the
original commitment) strains school budgets.
2. Revenue. One of the biggest problems is cash flow, and several factors contribute to
the problem.
3. Late approval of the state budget is another problem. When the state budget is two or
three months late, school officials do not know just what their state revenues will be.
Late adjustments to school budgets are often necessary.
4. Programs. Schools are often hard-pressed to provide modern technology in regular
programs for students. Moreover, textbooks and equipment (especially in vocational
programs) are obsolete in many cases, and the school struggle to maintain.
6. How safe is it to use estimated income in the preparation of the budget?
- The principal along with those persons incharge of preparing the budget will then
calculate the money that is expected from sources such as the school fee, book rental
scheme, private organizations which may come in the form of grants and scholarships,
as well as subsidy from government to cater for all areas within the school. Knowing this
estimated revenue will exist so that planning can be more logically done.
7. How do I calculate how much to set aside for staffing?
- Staffing costs in schools typically account for between 75 to 85% of the overall school
expenditure and premises costs 10 to 12%. It is therefore important to forecast likely
costs in these areas early in the calendar year. Again, once the Pupil Census return is
complete in January, provisional arrangements can be made in estimating the staffing
requirements from the new academic year Curriculum Planning timetable.

8. Having got a budget in place, how do you ensure its stays on track?
- For schools with their own bank accounts, cash flow is a matter to be considered both
during the budget setting process and the course of the year. Schools need to prepare
cash flow forecasts to ensure that they will have sufficient funds to meet their expenses
month by month during the year. Cash flow forecasts do not need to be completed in
excessive detail and broad categories of income and expenditure are sufficient.
These forecasts recognize that income and expenditure does not arise evenly each
month and will greatly inform the development of the budget profiles
9. Are there any particular issues relating to special schools that I should be
aware of?
The following are examples of issues related to special schools we have to be aware of:
- School Improvement, Developing Inclusion
Increase understanding of inclusion in education by engaging experiences to other
schools and to develop aspects of their policies and practices that may lead us to
school improvement and educational reform.

RESEARCH FOR FINANCIAL MANAGEMENT IN SCHOOLS:

How Principals Develop and Administer a School Budget
The schools budget may be described as the process of preparing a statement
of anticipated revenue and the proposed expenditure. In other words, it is a process for
preparing a summary of the programs in the school that will be reflected by the
expected revenue.
It can also be seen as a process of relating the expenditure of funds in a
systematic way to achieve the planned missions and objectives of a school.
The budget plays a vital role in the functioning of the school. The principal and other
persons who are in authority should make every possible effort for the budget to be
properly prepared and administered. Every school will not use the same process of
preparing and administering the budget. It must be noted however, that there are some
important elements that must be carried out by all persons who prepare and administer
a budget.
I will now outline the function of the budget as it relates to my school.
a) It ensures the achievement of the schools objectives- our plans that required the
spending of money is taken care of by the budget.
b) The budget compels persons to plan- the principal as well as the bursar have to
ensure that they plan in order to spend from the budget.
c) It provides a framework for responsibility of accounting and to establish a system of
control. Individuals such as the principal, the bursar, and the bursars staff are highly
accountable for proper documentation of expenditure. Persons have to spend according
the revenue available hence their spending is controlled.
d) It motivates employees to improve on the performance- responsible persons will
ensure that books are up to date to reflect both revenue and expenditure. On the other
hand, the principal will ensure that the best measure is put in place to collect money
such as school fee and book rental fee. This money is usually included in the projected
revenue.
In order for a budget to be effective there must be a budget period this is the time
span that the budget will cover. At my school the budget period is one year, September
to August. Of utmost importance is that the planning of the budget must be done ahead
of time so that money can be releases to meet the expenditure period.
At my school various persons are involved in the preparation of the budget. This
includes the principal, vice principal, the bursar, senior teachers, as well as subject
teachers who usually make requisitions of teaching materials so that proper estimates
can be made for instruction. The chairman of the school board also plays a significant
role as he is the person who has to approve and sign all documents pertaining to
expenditure from the budget. He signs on behalf of the entire school board.
In order to make a logical projection of the new budget the following factors will
be looked at from the previous years budget.
a) The accomplishment of the developmental plan. For example, my school has a threeyear development plan; therefore the principal along with the other persons who
prepares the budget would look at what was accomplished in this plan and what is to be
done in the new year in relation to the plan.
b) Factors that restrict the output of the budget (why didnt we achieve all the things we
had planned for from the revenue that was available is a likely question that could be

asked.)Restricting factors could be the projected amount of the school and book rental
fee was not collected.
c) Expenditure for the year that has just ended. Is there a surplus or a deficit existing,
this is important to know before the preparation of the new budget.
The principal along with persons such as the bursar and the bursars staff will then
calculate the money that is expected from sources such as the school fee, book rental
scheme, private organizations which may come in the form of grants and scholarships,
as well as subsidy from government to cater for all areas within the school. Knowing this
estimated revenue will exist so that planning can be more logically done.
The principal will then host meetings with all categories of workers within the school
(this meeting is likely to be done according to the different areas in the school).The
following are some of what should be looked at to make a plan for the budget.
a) Priorities for the particular year.
b) Ongoing programs that started previously and will still be continuing. E.g. the
repairing of school buildings and replacement of chairs.
c) One shot initiatives. In example, a new computer for the library.
d) Instructional materials/ facilities. Examples of this could be classroom materials,
money for seminars and field trips, public utilities, maintenance of school plants, as well
as other goods and services.
Once all requisitions have been made and the budget has been planned with all
necessary persons on staff it should be taken to the school board for approval and
signing by the chairman. It should be then sent to the ministry of education and be
reviewed. If there is a need for it to be revised the ministry will send it back to the school
for this to be done. After the revision has been done and it is again approved and
signed, it should be sent back to the ministry for the final acceptance to be given.
Copies of the budget should be made and be given to the chairman, the ministry of
education, the principal, and the bursar.
It is highly in the hands of the principal and bursar to be accountable for all
spending. Continuous monitoring is done; the process of monitoring includes sending a
monthly expenditure report to the ministry of education and the chairman of the school
board. Presenting figures does this report. However, a detail term report of the entire
operation of the budget should be given to the ministry of education as well as the
school board.
The principal along with the bursar should keep the accounting record as accurate
and up to date as possible so that auditing can take place without problems arising.
This report was submitted by Dorothy Sohan, a student in EDAD 410, The Principalship,
in Mandeville, August, 2002.
BUDGETING OF A SCHOOL PLANT
The budget of a school reflects the expenditures for the financial year, April 1 - March
31. It is developed by the school board and is carried out by consulting with the Ministry
of Education.

Schools receive funds from several sources. These include the Ministry of
Education, Youth and Culture (MOEY&C), private organizations, United States Agency
for International Development, Churches, Businesses, Clubs, Members of Parliament,
Parent Teachers Associations, past students, school fees and book rentals.
BUDGETING IN A NEW HIGH SCHOOL
In these schools, the amount of money received from the MOEY&C depends on
the number of students. The Ministry determines the amount to be paid in the form of a
grant to these schools, the principals are responsible for the preparation of the school
budget in consultation with board of management, vice principals, Heads of
departments and senior teachers.
The principal ensures that the bursar keeps proper records in accordance with
the Financial Act. This entails the cashbook, bank reconciliations, petty cash book
records and receipt books.
It is also the principals' responsibility to ensure that proper procedures for
withdrawals are followed; for example, all three signatures of the chairman, principal
and one other authorized person.
Principals monitor the spending, seeing to it that the bursar spends on a timely
manner and that vouchers and copies of bills accompany each payment. They ensure
that financial reports are made to the Ministry's financial controller, as required by law.
They ensure that the bursar has financial reports for the Board and also advise the
Board on expenditures from school accounts.
It is also the principals' responsibility to ensure that: (1) expenditures are recorded in the
appropriate accounts, (2) inventory is kept of all materials purchased from public funds,
and (3) an internal auditor is appointed by April of each school year, and an up-to-date
cheque disbursement book is accurately maintained.
Principals should make sure that they lead as well as manage the school
financial plans effectively.
This report was submitted by Thelma Allen, a student in EDAD 410, The Principalship,
in Mandeville, August, 2002.
THE SCHOOL BUDGET
A school budget is a statement of expenditure and financial proposals for the
ensuing year to be presented to the Ministry of Education Youth and Culture for its
approval. This budget has to be approved by the Ministry Of Education, prior to that it is
called an estimated budget.

This budget is an essential requirement of all educational institutions, and as

such the principal has the responsibility to prepare the document in consultation with the
board of management, Heads of Departments, Senior Teachers or any other persons
seen fit by him/her.
The school's budget is done on an annual basis, and is prepared ahead of the
financial year that begins every April through March. The first step is to analyze the
previous year's budget.In so doing, he/she can identify the shortfalls in the budget and
ascertain whether or not the needs of that year were appropriately met. Then the new
budget can be developed according the changing needs.
In making up the budget the persons involved identify the needs of the school,
bearing in mind the student population and to some extent the staff. Sub-headings are
established which are as follows:
1) Vehicle upkeep
2) Auxiliary staff
3) Utilities (light, water, telephone)
4) Canteen
5) Instructional material
6) Sanitation
7) Repairs and maintenance
In addition the budget must be accompanied by notes, which include descriptions
of intended purchases and costs. An estimated expenditure is now arrived at and the
source of income or funding is established. Schools receive donations and contributions
in the form of money, materials, labor equipment and other gifts from organizations,
institutions as well as individuals. Some of the organizations are:

Ministry Of Education
Private Voluntary Organization
Jamaica Social Investment Funds
Church
Private enterprises
Member of parliament Board members
Parent Teachers Association Clubs Past Student Association

In addition secondary and high schools receive fees from students for tuition,
book rental insurance and the cost-sharing program through which needy students can
access financial assistance.
All funds that the institution receives become the property of the
Government and should therefore be treated as funds directly through the Grants or
subventions.
At the Primary and all age level grants are received on a term basis. The funds
are sent directly to the principal in cheques drawn to the school. Then cheques are
logged in school accounts, and cheques and vouchers are used to spend the money.
The cheques that are spent have to be signed by the board chairman. In a nutshell, the

chairman ensures that all expenditures are properly approved and receipts. Proper
returns have to be made by the principal and in some cases heads of department and
persons in charge of the canteen.
Interestingly, the principal cannot spend outside of what is approved on the
budget. After the Ministry approves budget copies are sent back to the school and the
chairman. The approved budget is accompanied by a warrant that specifies how the
budget is allocated.
To delve further into school budget, it is interesting to note that at the secondary
level and high school level subvention is given. This is logged to a school account and
the subvention is used to pay academic, administrative and auxiliary staff, instructional
materials and maintenance and repair. Budgeting allows for proper accounting of the
funds entrusted to the principal, which leads to organized budgets that will contribute to
the effective operation of the school.
This report was submitted by Janet Graham-Blake, a student in EDAD 410, The
Principalship, in Mandeville, August, 2002.