It is possible that the report of the independent review of the budget of School District No. 61 (Victoria) will become the gold standard for reviews of school district budget processes.
Written by retired secretary treasurer Joan Axford, probably the most experienced and knowledgeable person in the province when it comes to understanding school district budgets, the report clarifies a number of issues.
First of all, it politely corrects the tendency for people, absent any actual knowledge of the topic, to look for simple solutions (senior administrators are overpaid and there are too many of them anyway).
Secondly, the report explains in detail the implications for school districts in the fact that the operating budget (approximately 92% of which goes to employee compensation) needs to be cast twice in the same calendar year.
In public education, there are two official budget plans.
The first, for the following school year, is approved by trustees by June 30 of the school year just ending.
This plan is based on enrolment projections for the following September — a kind of statistical educated guess about how many kids will show up in September, how many teachers and classrooms will be needed and what revenues will be approved by government to meet that need.
The second budget is not finally approved until Feb. 28 of the next school year, when actual enrolment is known from the September head count, and it is too late to modify decisions that have kept the system operating.
By then, school districts have some knowledge of other revenues above and beyond the grants generated by the previous September’s full-time-equivalent enrolment.
There’s a great deal more to it than that, including labour settlements, international student tuition fees, “holdback” funds, special program allowances and whatever contingency and accumulated reserves look predictable.
According to the Axford report, the reason for some surplus in the 2019/20 Greater Victoria School District budget is attributable to reduced staffing replacement due to the pandemic ($1,601,071), reduced utility costs due to school closures ($492,610) and reduced supply costs due to school closures ($3,127,653), all of which resulted in a 2019/20 surplus of $5,221,334.
All otherwise unpredictable budget influences.
An operating budget surplus for a B.C. school district is a double-edged sword, inasmuch as a surplus of any more than $5 million against a $200-million-plus expenditure, while it provides some comfort against unexpected exigencies of the coming year, can quickly become politically unacceptable if it is felt the money “should have gone to classrooms.”
As I said, it’s an uninformed response to a very complicated fiscal situation but it makes for good media opinion pieces.
On the other hand, a 2015 report by Ernst and Young that examined school districts across B.C. and their operating surpluses advises that a 3% surplus is not only acceptable but wise.
There is more to the 27-page densely loaded report, much more, but it goes a long way toward explaining the complexities of an organization like the Greater Victoria School District trying to balance expected revenues of $204 million with anticipated expenditures of around $212 million.
That balancing act needs to be accomplished to the benefit of approximately 20,000 immediate clients (the kids) in 44 buildings staffed by about 1,100 teaching employees and another 1,000 or so non-teaching employees.
The full report is online at SD61 and bears reading more than once, especially for anyone who wants to seriously understand the district’s current fiscal challenges.
And, like any report of genuine value, Joan Axford’s review includes some useful recommendations.
The first two recommend that the district “continue the work of building understanding and transparency around budgets” and that “for the program reduction options that the Board does not implement in this budget, immediately establish a working group to evaluate how these programs might be offered in a more cost-effective manner.”
The review also recommends that “the Board should receive regular updates on the system impacts and adjustments resulting from budget decisions.”
Finally, the report suggests that “the Board may want to consider options that span two school years to allow for further engagement on the difficult available options.”
As one who has always advocated that school districts pay greater attention to communication with a broader public, the last sentence of the review caught my eye: “The report also provides considerations for the Board and senior management on improving sharing and processes moving forward.”
Geoff Johnson is a former superintendent of schools.
