Resource Allocation Project
Part I -Introduction
The formal education success of any institution depends on many factors. The matrix of these factors and how they are balanced determines the effectiveness of the school in achieving excellence in all spheres of student development. Amongst the very important issues include; staffing, infrastructure and academic resource materials among others. It is without doubt that all the above factors among others not mentioned all depend on the availability of financial resources. On this note, it may not be possible to possess all finances a school requires thus the issue of budgeting comes in. Fiscal skills in allocating whatever an institution has at its disposal are vital aspects in achieving the goal of the institution.
Columbia Secondary School for Math, Science & Engineering (CSSMS&E) as a school has set all standards of a successful school. The school is only two years old after being opened in the fall of 2007. This makes it a young school although it has demonstrated enough resilience in organization and setting institution culture. The standard in the spreadsheets of the school shows that the fiscal operations lay in the hands of the principal. The principal plays a pivotal role in the budget of the institution. However, in other schools, the building level administrators have a great control on the budgeting and the spending of the school.
Among other reasons, when the level building administrators play a key role in budgeting there are some benefits. Firstly, the principal’s time is freed up thus can concentrate on other curriculum related matters like offering direction to tutors and students. Secondly, the whole process eliminates duplication of services as the two individuals may be performing the same task thus accountability is hanged in case one is dishonest.
However, let it be known that running fiscal operations require practical skills and experience to achieve effectiveness and efficiency. Managing the budget of a school like the Columbia Secondary School for Math, Science & Engineering given its quantitative figures and qualitative aspects on the institution is technical (CSSMS&E, 2009).
The matrix of the above factors ideally affects the capability of a school in achieving the said vision and mission. It is with regard of the interrelationship of the above factors that the fiscal and accounting processes at Columbia Secondary School for Math, Science & Engineering. This paper will describe and scrutinize the principal Gabriel Maldonado-Rivera decision making process on budgeting and resource allocation in the institution.
Part II – Data Description
Columbia Secondary School for Math, Science & Engineering is a new public 6th up to 12th grade school. The school was opened in the late 2007 through a partnership between New York City Department, the community, and Columbia University. The plan of the school is to be adding one grade per year until the founding 6th grade reaches 12th grade and enrollment of 650 achieved (CSSMS&E, 2009).
Given that the school is quite new being only two years old, getting to know the financial standing and budgetary effectiveness is a vital opportunity to understand the threats and the opportunities that stand in the way of the school as it plans to achieve laid down plans.
In the year 2008, the institution made some progress in allocating finances for various programmes successfully. In institutional budgeting, balancing between the available funds and the present expenditure and any encumbers demands a lot of skills and technical capability.
Principal, Columbia Secondary School for Math, Science & Engineering
Dr. Maldonado-Rivera the present principal of the Columbia Secondary School for Math, Science & Engineering has been in that capacity since the inception of the school in the fall of 2007. Additionally, he also is the Project Director and the Associate Research Scientist at the Columbia University and NYC Department of Education since 2006 to date (CSSMS&E, 2009). In addition, since 1995 to date, he has been the Executive Director of The Environmental Education Project of Puerto Rico. This is a non-profit outdoor nature education organization that serves about 5000 students and 200 teachers in grades K-12.
In this capacity he has earned experience in developing and obtaining funding among other programs. To add to his cap, between 2004 and 2006, eh was the Middle School Assistant Principal and Curriculum Coordinator, TASIS Dorado School, Puerto Rico. This private secular school had 400 students, 50 faculty staff and offered PPk-7th Grade. In this capacity, He oversaw the new Middle School building project including interior design and saw development and implementation of various academic and infrastructure developments. This makes running this school’s fiscal programs not a huge challenge though they are anticipated.
Basing on the data that the principal provided, it is possible to examine the total operating expenses for the school. This paper primarily is about critical budget analysis of the school in the past two years to draw comparison and analysis.
|Non Discretionary Funds||$509,113.00||$1,320,777.00||$914,945.00|
|Books and Periodicals||$83,380.00||$35,522.00||$59,451.00|
|Non Local Travel||$11,000.00||–||$5,500.00|
|Dues and Fees||$4,540.00||–||$2,270.00|
|Equipments General||–||$36, 593.00||$18,296.50|
|School Aid||$11, 191.00||$14,114.00||$12,652.00|
|Hourly Personal SE||–||$16,284.00||$8,142.00|
|Non Pedagogic PERS||–||$ 39,433.00||$19,716.50|
|Fridges – FICA||$3,744.00||$494.00||$2,119.00|
|Fridges – Unemployment||$246.00||$33.00||$139.50|
|PCARD Object Code||$46,534.00||$50,852.00||$48,693.00|
|Motor Vehicles C||$7,595.00||_||$ 3,797.50|
|Principal PER SESS||$1,214.00||–||$ 607.00|
|Teacher Reg Grades||$97,474.00||–||$48,737.00|
|Totals Discretionary Funds||$279,721.00||$286,314.00|
|Supplies and Materials||–||$86,123.00||$43,061.50|
|Data Processing CU||$1,189.00||$2,381.00||$1,785.00|
|Lump sum Mandatory||$29,354.00||–||$14,677.00|
|Teacher – Regular||$314,986.00||$349,041.00||$332,013.50|
|Per Session (FY04)||–||$91, 506.00||$45,753.00|
|Social Security Be||–||$494.00||$247.00|
|Back – Pay||$121.00||$1,012.00||$566.50|
|Office Furniture A||–||$10,457.00||$5,228.00|
|Data Processing EQ||–||$5,095.00||$2,547.00|
|Trainee (FY04+)||–||$ 10,516.00||$5,258.00|
The budget contains twenty one line items in the 2008, to thirty line items in the 2009. The differences ion the number of items is caused by the differences of number of line non-discretionary and discretionary items between the two years. From the figures, it can be concluded that the accounts for parent involvement and security equipments were not funded in the 2009. Teacher regular account formed the highest budget expenditures in the two years.
Additionally, it was found that budget allocations for some items far exceeded the value expenditure of the accounts leaving lots of money in form of budgets. For instance, CFF Instruction account in 2009 had budget allocation of $32,620.00 yet actual expense was $9,001.00. As for ASA SSO Support account, in 2009 $33,000.00 was allocated yet nothing was expensed leaving a balance of the same amount.
Fig.1 Comparative budget items
Discretionary funds are those funds that are optional in the budget. As for the non discretionary funds, they represent those factors that are mandatory. The principal has limited access to non discretionary funds. It was discovered that funds can be transferred to these non-discretionary accounts but never out of them.
Breakdown of Non discretionary accounts
The non-discretionary accounts form the account items that are mandatory. There is a trend in which the items either appear in a certain financial period or not. For instance, Office Furniture A, Security Equipment, Data Processing EQ, Assistant Principal and Trainee (FY04+) never featured in the financial period of 2008 yet they appeared in the financial period 2009. It is not predictable the amount of funds that each account will utilize in a particular financial period. For example, Back pay account actual expenditure was $121.00 in 2008 while in 2009 the account indicated $1012.00 as expenditure.
The teacher regular accounted for the highest expenditure figures for the two accounting periods. In this case, in the financial period 2008, $314,986.00 while the same account in 2009 had a high expenditure figures of $349,041.00. The items of non discretionary account have a big range which makes drawing a comparative bar graph a challenge given the figures range from amounts of hundreds like the pay back of 2008 at $121.00 to high figures of hundreds of thousands like the Teacher regular in 2009 has a value of $349,041.00.
This makes a drawn data representative figure one that can not capture the true comparative position. The non discretionary items accounted for about 65% of the budgetary expenditure in the financial period of 2008. In the financial period ending 2009, non discretionary account items carried a large portion of the budgetary expenditure at above 80%. This means that the mandatory items in the planning and expenditure of the Columbia Secondary School for Math, Science & Engineering is higher than the optional values.
Although it is not possible to ascertain the average expenditure figures for a particular financial period, it is also possible to ascertain the accounts that carry the huge budgetary amounts. The average high budgetary expenditure figures in ascending order is displayed in the following table.
Table 2: Average expenditures
|Supplies and Materials||$43,061.50|
|Teacher Reg Grades||$48,737.00|
|PCARD Object Code||$48,693.00|
|Books and Periodicals||$59,451.00|
Part 3 – Analysis
The analysis of data indicates that the projected budgetary figures are on increasing note. It is also observable that the expenditure categories on the financial periods of 2008 and 2009 showed perpetual increase, for instance, the non-discretionary expenditure figures increased by a whooping 159%. The increase can be associated by the increased enrollment given that the institution at inception had a single grade class in the 2008 having 96 students while in 2009 there are two grade classes with another 96 getting admitted to make a total of 192 students. It is also possible to associate this with the infrastructure and resource acquisition by the institution.
The highest amount of average expenditure was spending on teacher regular. Books and periodicals too account for a huge budgetary expenditure. The school given that it is new only two years gave the Principal, Gabriel Maldonado-Rivera a reason to spend on stocking the library. This is the reason why books and periodicals account for huge budgetary figures. The district provides $500 per student as support for books. The DEO made a small allocation this making the school to have a high budgetary expenditure on books and periodicals. The principal ideally sometimes transfers money from some accounts for use especially if the accounts in question lack enough funds.
Part 4 – Findings, Interpretations and Discussion
A closer look at the budgetary allocation and expenditure at Columbia Secondary School for Math, Science & Engineering reveals the following;
- The principal possesses a huge control on the spending in this institution. However, the school’s board is involved in authorization of particular figures of expenditure.
- The budgeting at the institution shows a trend of huge fluctuations in figures making forecasting practically impossible.
- The category of expenditure items also varies from one financial period to another.
It was found that the principal has a commendable control on budgetary responsibility. It is also observed that the principal has practically enough information on the operating expenditure of the school. The principal, Gabriel Maldonado assured me that the he was practically involved in the budgetary process. Transparency and accountability are virtues that apply equally well in the planning and finance department of this school. To ensure that integrity is kept, receipting of expenditures is done and a committee oversees budgetary implementation process.
Additionally, internal audit controls accounting operations to eliminate possibility of any fraud. The total operating expenditure at Columbia Secondary School for Math, Science & Engineering in 2008 was $788,834.00 compared to the budgetary projection of the first year which was $1,137,000. This represented a $348,166.00 under fall in budget. As for the 2009 financial year budget, the total actual operating expenditure was $1,607,091.00 against a background of projected budget of 2009 at $1,569,680.00.
There a number of items in the budget that each year receives budgetary allocation but never spend on anything. This makes the funds to remain as balances in the financial books to be transferred to the next financial periods. For instance, maintenance and Repair account received in 2009 $12,700.00, Lump Sum – Amount received $33,000.00, Supplies and Materials at $154,795.00, however al the above accounts in the financial period 2009 had a nil expenditure.
There are pressing areas that the principal may direct these monies. The limited budget allocations from the district the principal ought to implement the school budgets. The principal utilizes the money provided by the DEO in implementing the particular budget allocations. Some accounts though ended up with no budgetary allocations, there was encumbers. The principal transfer funds from those accounts to these with encumber. This leaves the school with limited funds that can be channeled to areas that are beneficial to the school.
Some funds in the budgetary allocations are vague in their use for instance the professional development and Community Association among others. The fluctuations in the values of budget make financial planning unpredictable. In some instances, different accounts showed different figures in the same financial period. This makes a tendency of fraud to be present.
Implications, Recommendations and Conclusions
The spending at Columbia Secondary School for Math, Science & Engineering is an indication of the District’s financial planning in the centralized approach but implementation at individual schools. In this case, the principals play no role in the allocating the budgetary figures but at implementation they are involved depending on the school they operate. At this particular school, the principal plays a pillar role in implementation.
At some instances, the principal lacks the full financial resource data. This coupled with being hardly involved in budgeting makes him to be incapacitated in designing the best financial strategy of making the desired status of the institution a reality. Moreover, with hardly any authority to get involved in the planning stage of budget preparation, the hands of the principal are tied in making significant proposal, contribution and spending on opportunities that may emerge coincidentally after budgeting preparation period.
The centralized budget preparation has the short fall of inability to customize budgets. The needs of the school though may be general; the school has specifics that need reflection in the budget. The district fails to specifically know the needs of the staff and the student making the approach to budgeting process not the best for this new school. Although the principal has some control in budgetary spending, he has limited access on hiring staff and on the professional development account.
The significant budget discrepancies in the actual operating expenses versus the projected values are a cause for alarm. This means the planned and desired state of the institution after a certain period of time may not be achieved given the financial deficits. This is a limiting factor. All this is coupled with a budgeting process that is vague in terms of projection and preparation of the budget. Although the central district budgeting process may justify their minimally or total none involvement of principal in budgeting as a process of making them focused on other demanding roles like administration, the process probably is a precursor to accounting malpractice by the concerned budgeting officers.
Therefore the following measures are needed to make the school achieve the laid objectives. First, the budget preparation must involve the principal is the budgets have to be prepared at a centralized office at the district. This is because the principal has the opportunity of injecting the favorable and customized budgetary allocations that will propel the school towards achieving its goals. Ideally if it is possible, the budgeting should be decentralized.
With enough measures top prevent malpractices; this approach is more effective and efficient than the centralized approach. Secondly, a contingency account is needed to make it possible to address emerging budget items that may not be in the budget in the first place. Moreover, it is important that adequate financial resources are allocated to the school to make it achieve the laid down objectives.
The vision and mission of the school is very attractive. The dedication of the staff and administration is too very outstanding. Finally, the potential held by Columbia Secondary School for Math, Science & Engineering in emerging as the best academic center of Excellency is very high should the above issues be addressed.
CSSMS&E (2009) Columbia Secondary School for Math, Science & Engineering – About the School
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