BUDGET REPORT 2017-18.pdf
FIRST INTERIM REPORT 2017-18.pdf
SECOND INTERIM REPORT 2017-18.pdf
The Tracy Unified School District budget is a planning document which links educational goals to financial decisions. Our district’s budget development process is guided by our Gateway to Tomorrow Strategic Plan. The Strategic Plan identifies long-term goals for the district and its students as determined by the community. Specific steps for achieving these goals are developed and implemented as financial and human resources are available. The budget is the critical element in achieving educational goals while maintaining the district’s fiscal solvency.
The budget document describes the district’s annual income and plans for spending during a fiscal year that runs from July 1 through June 30. The document also defines accountability for the district’s fiscal solvency. Tracy Unified, like all California public school districts, is required by law to adopt a balanced budget every year. In December and again in March, the Board of Education is required to review two interim financial reports which reflect any changes made in the district budget since its adoption. The San Joaquin County Superintendent of Schools is responsible for monitoring the budgets of Tracy Unified and all other districts within the county.
School district budgeting is a dynamic and constant process that changes daily. Our district has a team that monitors the budget daily. Through the budgeting process, the district determines whether or not to hire new employees, implement new programs, add new or repair old facilities, purchase new textbooks and much more.
Frequently Asked Questions about the District Budget
What is a school district budget?
A school district budget is an annual plan for maintaining the financial health of the organization. All school districts are required by state law to adopt a balanced budget each year. The district budget serves a variety of purposes: It’s an estimate of district income to be received and a plan for district spending; it’s a policy document that reflects the vision and priorities of the district; and it’s an operational plan for making district decisions. School district budgeting is a constant process involving continuous planning and evaluation. Our district manages four budget cycles simultaneously.
What is our school district’s “fiscal year?”
The fiscal year for both the state and school districts include the 12 calendar months between July 1 and June 30.
Who approves our school district budget?
The district’s Board of Education must approve our annual budget and submit it to the County Superintendent by July 1 of each year. The County Superintendent monitors our district budget, ongoing financial obligations and multi-year contracts. The County Superintendent has specific powers for recommending actions to revise budgets.
What are the sources of our school district income?
Our school district receives its income or “revenue” from three primary sources: federal, state and local. Federal funding amounts to 4 percent of our total budget. All federal dollars are earmarked for specific “restricted” or “categorical” programs. The state provides most of our district income – about 94 percent. Each year the California State Legislature adopts a budget that determines the amount of funding school districts will receive from the state. The sources of state funding for school districts are sales taxes, income taxes and property taxes. About 2 percent of our income is from local sources such as facilities use fees, transportation fees, donations, interest on district accounts, etc.
How much state lottery money does our district receive?
The district estimates that 1.7 percent of its income is from state lottery funds. California school districts expect to receive about $121 per student in lottery funds this school year. Of that amount, $109.50 per student is “unrestricted,” meaning the district has discretion in how it spends these funds.
Is there a relationship between the state budget and our district budget?
Yes. The state budget is extremely important since public school districts depend on it for almost all their income. There is close timing in the summer between final approval of the state budget, school finance legislation implementation and the adoption of local school district budgets. Though all budgeted incomes are estimates, in some years - like this fiscal year - when the state budget isn’t approved by the June 30 constitutional deadline, districts are forced to base their income estimates on speculative funding plans still being debated in the Legislature. Our district budget also reacts to the health of our state budget.
Is state funding for school districts stable?
Our school district receives about 94 percent of its funding from the state. The state funding we receive from the state is generated from a mix of unstable and stable sources. About 67 percent of our state funding comes from “Proposition 98” funding. Prop. 98 was approved by voters in 1988 and set a yearly minimum level of state funding for public schools based on prior year spending and the condition of the state economy. Prop. 98 funding is driven by two unstable sources – sales tax and income tax. These funding sources can fluctuate dramatically with the economy. The remaining 33 percent of our state funding comes from local property taxes. Local property taxes don’t flow directly into local school districts, they are allocated to public agencies by the state. The property tax portion of our state funding is stable. The stability of the property tax portion of our funding is largely due to the passage of Proposition 13 in 1978. Prop. 13 froze the assessed value of properties at that point in time and implemented a maximum increase in a property’s assessed value of 2 percent a year. The assessed value is the basis for annual calculation of property tax income the state allocates to local school districts.
How is our district budget spent?
The district administration prepares the budget spending plan, involving a budget review committee in the development process. The budget is constructed by analyzing the cost of current programs, assessing the effectiveness of those programs and reviewing proposals for new programs, then recommending expenditures to support those programs that best align with the district’s strategic plan. The district’s strategic plan, “Gateway to Tomorrow,” is a long-term plan for achieving the district’s mission. The strategic plan guides all decisions made regarding the district’s human and financial resources.
The majority of our budget is spent paying employee salaries and benefits. About 90 percent of our budget is dedicated to employee costs. Our budget also covers books and supplies, services and operating expenses, utility costs, capital outlay, lease-purchases, etc.
Is our district budget audited?
Yes. Our district is required to have its budget audited annually by an independent firm. The San Joaquin County Office of Education also reviews our annual budget as part of its legal responsibility for fiscal oversight of county school districts.
What are “unrestricted” funds?
Unrestricted funds are used for general purposes. Districts have discretion to spend this money as needed for the day-to-day operation of schools. Unrestricted funds are used to pay for everything from salaries to the electric bill. The state is the primary source of unrestricted funds. Unrestricted funds are part of the district’s “General Fund.”
What are “restricted” or “categorical” funds?
Restricted funds are those that are designated by law for specific purposes. Restricted funds are also known as categorical funds. These funds are generally from the state or federal government and allocated to qualifying schools or districts for specific reasons. The spending of these funds are restricted to specific categories of children, to a particular activity or educational program, or for a special purpose. There are more than 50 categories of restricted funds. These 50 sources of restricted funds range from federal programs to grants to donations. Examples of restricted or categorical funds include Title I, Indian Education, Gifted and Talented Education, transportation, etc. Categorical or restricted funds are part of the district’s “General Fund.”
What is the “General Fund?”
California school districts use an accounting system known as “fund accounting.” This system is common in government entities. The largest and most active fund in this system is the General Fund. “General Fund” refers to the accounting term used by the state and school districts to differentiate general revenues and expenditures from those placed in separate budget categories for specific uses. A school district’s General Fund includes both unrestricted funds and restricted/categorical funds.
In our district there are four separate budget categories for specific uses that are not included in the General Fund. The budget categories excluded from our district’s General Fund are adult education, food services, child development and facilities.
What is budget “encroachment?”
Encroachment is a term used in school finance to describe the situation in which the cost of a required or restricted program is more than the amount of funding provided, forcing districts to use their unrestricted funds to pay the additional costs. Some district programs, like Special Education, are required by the state and the district is forced by the state to make up any state funding shortfalls using the district’s unrestricted funds.
What is the budget “reserve?”
The Reserve for Economic Uncertainty refers to funds set aside in a budget to provide for estimated future expenditures or to offset future losses for working capitol or other purposes. Only the State Legislature has the authority to define “economic uncertainty” and authorize a district to spend its budget reserve. Typically, our school district is required to deposit an amount equal to 3 percent of its expenditures in its Reserve for Economic Uncertainty. School districts that do not have the required budget reserve in place risk the county office of education or state exercising various degrees of control over a school district.