The Bottom Line

Break out the spreadsheets and small font, because budget season is just around the corner.

For school districts around the country the process goes a little something like this:

• Determine how much money you have (or don’t have) for the upcoming fiscal year.
• Calculate your site-level budget targets.
• Create and disseminate spreadsheets — sometimes hundreds of them — to your budget owners so they can build line item budgets for their schools, departments, programs and grant funds.
• Wait… patiently.
• Collect those hundreds of spreadsheets back via email and start aggregating all those account codes and budgeted amounts.
• Cross your fingers and load all that data into your financial system and hope you come out with a balanced budget.

Doesn’t it seem like there should be a better process? That’s what I thought, too. In my former role as Executive Director of Budget for Denver Public Schools, I was constantly looking for ways to improve the site-level budget development process. There had to be a way to rid the district of all those spreadsheets.

My philosophy was that building a budget should be as easy as using TurboTax to file my taxes. That’s not to say the decisions that go into building a budget are easy—they aren’t! But the process to assign dollars and headcount to all those account codes should not cause heart palpitations and grey hairs.

There are several key pain points I needed to see addressed if I was going to abandon my Excel spreadsheets and purchase a budgeting tool, and I suspect you have these same challenges and needs too, including:

1. A Reliance on Excel

For many people, Excel is a scary little beast. Unless you’re a spreadsheet expert, like most financial staff, using it can feel daunting. I needed a product that made budget builders from all departments and schools feel comfortable and confident in the process. Instead, I kept finding products that touted the look and feel of Excel, but I wanted my budget owners to feel as far removed from Excel as possible.

2. Access to Historical Information

A new budget is the product of the budget that came before it. It’s grounded in staffing plans, strategies, and purchases from the year before that are adjusted to meet the needs of the next fiscal year. In order to accurately plan for the upcoming year, access to your historical spending is key.

• Do your budget owners have access to their historical spending in order to know what to tweak for the future?
• Which accounts were typically overspent or underspent?
• Which positions are changing in purpose based on a new strategy?

In order to build an accurate budget, historical information is necessary.

3. Efficiency in the Reconciliation Process

District charts of accounts contain thousands of account codes, each with a unique and important purpose. My staff would spend nearly two weeks reconciling each account code to make sure it was used appropriately, ensuring that funding guidelines were met and the budget was balanced to its total allocation of funds. To be effective, your budget tool should streamline that process and take any guesswork out of reconciling your accounts.

4. A Holistic View of Funds

One of the biggest challenges with Excel spreadsheets is their inability to allow budget owners to view and plan for all funding sources at the same time. A school principal would sometimes receive 3-5 separate Excel forms to encompass the various sources of funding that they were responsible for. This is like paying for a tank of gasoline with 3 separate credit cards. Without all of the funding sources being simultaneously visible to the budget manager, principals have little ability to plan for their total expenditures and create the budget.

5. Flexibility to Build a Budget at the Individual Site Level

Schools, departments, programs, and funding sources all add a slightly different twist on how a budget is built. I needed a tool that was agile enough to handle the nuances of all of these different micro-businesses within the district, like using average vs. actual salaries, varied staffing models, and numerous funding restrictions, just to name a few. The products I looked at could each handle some of these variations, but there was nothing available that could solve for all these budgeting methods in a single tool.

6. Transparency and Collaboration Developing the Budget

In an Excel-based budget process, collaboration means emailing a spreadsheet back and forth, which means version control and loss of functionality with any complicated formulas are prevalent problems.

From a budget director’s standpoint, a budgeting tool needs to allow the budget to be viewed by the various stakeholders. If there was one place where everyone could view and develop the budget, and challenge and modify line items as a budget building team, our process would be more strategic and streamlined.

7. Visibility During the Process

One of my most nerve-wracking months as a budget director was the annual lull between sending out those hundreds of budget forms and waiting, seemingly forever, while everyone completed their individual line item budgets. It was only after all those forms came back that I could put Humpty Dumpty back together again in all his spreadsheet glory and see my $1.7 billion dollar budget in its entirety. I wanted to see budget owners actively working to build their budgets. It was important to understand what they were budgeting for so we could gain a sense of how large or small our staffing changes might be, and ensure that planned contracts were being funded appropriately.

8. Strategic Planning and Resource Allocation

The biggest issue with an Excel based process is that it forces budget builders to think in rows and columns rather than big picture about the overall plan. School and department leaders get completely tied up in the process of filling out their spreadsheets, funding rules and deadlines that they aren’t able to thoughtfully engage in the process to ensure the most effective use of funds.