12 Step School Budget Planning Checklist

You may be asking right now: “How do you create a school budget plan?” Whether you’re an experienced budgeting professional or new to budgeting altogether, it’s always a great idea to have a thorough checklist to review with administrators, teachers, the accounting department, or the school board. 

How Does School Budget Planning Work?

The school budget planning process involves creating a clear financial roadmap outlining your expected revenue and expenses for the academic year, aligning the school's goals and mission. 

It's a continuous process that includes the key aspects below:

1. Setting Clear Goals and Objectives: Your school must have well-defined objectives and goals that are in sync with the school's vision and mission. 
2. Revenue and Expenses Projection: Your budget should project how much money your school expects to receive and how it will be spent. 
3. Establishing Limits: Whether or not your school funding comes with expenditure restrictions, you must set limits on how much you can spend in different areas, such as facilities, instruction, and equipment. 
4. Strategic Planning: You must ensure your budget aligns with the school's long-term strategic goals such that your financial resources support student success, academic excellence, and overall institutional growth. 
5. Flexibility and Communication: The one-and-done approach to budgeting is gone. School budgets are living documents that should be adjusted regularly to address unexpected opportunities and challenges. Collaborative budgeting and communication between the board, finance committee, and the principal promote effectiveness. 
6. Seeking Professional Help: Most school boards use a finance committee or seek advice from financial management professionals to review and manage budgets. 
7. Budget Approval: The board of trustees approves the final budget before the financial year begins. 

Seeking professional help and using dedicated financial management software are critical to the school budgeting process. 

At Martus Solutions, we help institutions work with one of our accounting partner firms to enjoy enhanced budgeting, forecasting, and reporting services through the Client Accounting Services partnership program. 

If you are just looking for a reliable financial management tool, Martus is the ideal software for your school. 

You can enjoy collaborative budgeting, automatic budget roll-ups, better visibility for timely approvals, and customized budget creation. 

Streamline your school budgeting process with Martus now—schedule a discovery call today.

Why the Importance of Financial Resources in Education Cannot Be Ignored

In the public school system, financial resources are more than just line items in a budget. They are the basis of student success, community and public trust, and staff retention. 

However, school leaders must manage increasingly complex school budgets without the appropriate tools to plan, forecast, and report effectively. 

At Martus Solutions, we have worked with schools trying to maximize their limited funds to improve outcomes. Here are the five primary reasons we believe financial resources matter in education and why managing them well is critical:

1. Facilities and Learning Environments Need Strategic Investment: If your school operates in buildings well past their prime, the challenge isn't just funding. It's about knowing how and when to prioritize and track capital investments. Budgeting software can help school leaders align expenditure with real facility needs, while communicating clearly with funders about where the money is going. 
2. Staff Recruitment and Retention Depend on Proper Financial Planning: Competitive compensation, strong professional development, and manageable class sizes require thoughtful monetary planning. With access to real-time budget and forecasting software, you can make clear decisions regarding staffing and respond quickly to changes in funding, enrollment, or policy. 
3. Access to Learning Technology Requires Data-Informed Budgets: Modern learning tools and technology are essential, yet schools struggle to track and plan for tech-related costs such as software fees and staff training. With the right financial software, your school can build more sustainable edtech budgets that support long-term, equitable digital learning. 
4. Support Services Need Consistent and Transparent Funding: Many school programs, such as mental health services, scholarships, special education, and school meals, rely on grantor and donor funds. The money usually comes with grant-based or donor-imposed restrictions, making financial transparency necessary. An effective budgeting and reporting tool makes it easier to track these funds, apply for grants, and show compliance with federal and state requirements. 
5. Clarity and Accountability Can Improve Funding Equity: School funding is different from one district to another. Financial clarity and accountability are essential to build trust with funders and secure more funding, especially in underserved communities. A modern budgeting platform can help you present financial data clearly to school boards, auditors, and the public, showing how money is spent to support all students. 

How Budget for Public Schools Differs From Private Institutions

Because of their funding models, public schools have high stakes for accuracy, transparency, compliance, and accountability. Their budgeting differs from private schools in several ways:

Difficulty Due to Unpredictable, Multi-Source Funding

Unlike private schools that often rely on endowments and tuition, public schools primarily receive a complex mix of local, state, and federal funds. Some also receive donations from private sources. 

Governmental revenue streams fluctuate based on enrollment, legislation, shifting policies, and property tax values. 

These donor and government funds are unpredictable, making long-term budgeting difficult, especially for district schools looking to maintain consistent programming and staffing. 

Public school boards and finance committees must model various funding scenarios, manage funding volatility, and make data-informed decisions under uncertainty. 

Strict Regulatory Compliance and Transparency Requirements

Public schools must fulfill detailed reporting and compliance requirements to satisfy auditors and private benefactors and retain access to funding. 

For example, public schools need to comply with applicable federal programs such as Title 1 of the Elementary and Secondary Education Act (ESEA), the Elementary and Secondary School Emergency Relief Fund (ESSER), and the Individuals with Disabilities Education Act (IDEA).

Where applicable, your public school must publicly present and get its budget approved by the necessary boards or state agencies. This budgeting and approval process isn't required of private schools, including the detailed documentation it attracts. 

Public schools must find ways to do real-time reporting, follow audit trails, and track specific funds. 

Limited Flexibility in How to Spend Funds

Public schools usually receive restricted or categorical funding that they can only spend on specific programs, such as special education, scholarships, feeding systems, or bilingual education. 

You can't change these funds to cover general expenses, which are a considerable part of your school's budget. Private schools rarely have this level of restriction. 

Funding fragmentation makes developing budgets difficult, especially when essential changes must happen in the middle of the year. 

How to Prioritize the Importance of Resources in Schools

School leaders must be intentional about allocating funds, planning for the future, and using their resources for optimal impact.

You can follow the tips below to prioritize and manage the importance of resources effectively.

1. Promote Equity and Access

Public schools serve diverse students, many of whom come from disadvantaged backgrounds. For equitable access to high-quality education, you should prioritize resources that address student gaps and provide them with the tools and opportunities they need to succeed.

School leaders must use data to decide on the most pressing needs, ensuring that every student receives support regardless of their background. 

They can also advocate for and allocate more resources to programs that support the most vulnerable students, such as special education and after-school initiatives. 

2. Strategically Manage Funding for Long-Term Sustainability 

Budgets for schools are about meeting long-term needs as much as they are for meeting immediate needs in the face of fluctuating funds. 

School professionals must forecast future needs, track spending, and comply with funding requirements. Financial management software can help ensure that both short-term and long-term needs are met. 

Schools can also prioritize capital improvements like facility maintenance and infrastructure upgrades to avoid costly repairs down the road. 

3. Involving Stakeholders in Budgeting Decisions

As a public school, you can include teachers, parents, students, and other local stakeholders in resource allocation decisions to ensure you spend resources in a way that reflects the school community’s values and priorities. 

By communicating openly, practising transparent budgeting, and seeking community partnerships with businesses, nonprofits, and local governments, you can improve resource availability and expand educational opportunities.

School Budget Planning Checklist

With the basics cleared, let’s now discuss the steps for creating a school budget in greater detail.

Following a comprehensive “back-to-school” checklist for school budget managers can help start a smooth financial planning process! Here are 12 steps for creating a school budget for the upcoming academic year:

1. Review The Previous Year’s Budget & Set Budget Goals

Analyze the previous year’s budget and expenses to identify areas for improvement and adjustments for the new school year. It’s always helpful to collaborate with school administrators, department heads, or the school board to establish clear financial goals and priorities for the upcoming academic year. Make sure the budget aligns with the mission and vision of the school as well. Convey the budget priorities to school staff and stakeholders to ensure everyone is aligned with the financial plan.

2. Consider Your Budgeting Software or Process

Take a look at how you create your budget and make sure it matches the scale of your school’s needs. If your budget managers only use Excel spreadsheets or Google Sheets, it might be time to switch to a more robust budgeting software to facilitate efficient budget tracking, expense management, and financial reporting.

3. Update Enrollment and Cost-of-Living Projections

Gather updated enrollment projections to estimate the number of students for the new academic year, which will impact various budget categories and projections. Also, make sure to account for inflation and cost-of-living adjustments when projecting expenses to ensure that the budget remains realistic and sustainable. This could mean wage raises in the next year for teachers, or adjusting tuition for students; this could also affect how much your school spends on supplies, for example.

4. Compile Expense Categories

Create a list of expense categories, such as salaries, instructional materials, technology, facility maintenance, transportation, and extracurricular activities that might happen this year. 

5. Review Vendor Contracts and Agreements

Request quotes from vendors for various goods and services, such as textbooks, school supplies, uniforms, or maintenance contracts. Following that, assess existing contracts and agreements with vendors to ensure they align with the school’s needs and budget goals, and make adjustments as needed.

6. Evaluate Capital Expenditure Needs

Identify any necessary capital expenditures, such as equipment or facility upgrades, and plan for their inclusion in the budget. This could include a meeting with your maintenance team to see if there are any parts of your campus that need more immediate repairs or attention.

7. Plan for Staff Development, Events, or Field Trips

Allocate funds for professional development opportunities for faculty and staff, whether it be team bonding activities, training, in-service, certificates, and more. Budget for school trips, events, and activities throughout the academic year and coordinate with teachers on their ideas.

8. Account for Grants and Donations

Incorporate any expected grants or donations into the budget and ensure they are used according to the donors’ stipulations. It can be helpful to coordinate with the school board to see if there is anything coming up from specific donors or sponsors as well.

9. Create Contingency Funds

Set aside contingency funds to account for unexpected expenses or emergencies, such as property damage, accidents, weather events, or anything else out of the school’s control that could affect spending.

10. Budget for Technology Upgrades

Allocate funds for technology upgrades, software licenses, and maintenance for teachers and students, as well as administration. It may be time to upgrade the computers in certain rooms or the tablets students use for work in school, if they’re provided.

11. Review the Budget Periodically and Prepare for Audits

Implement a system for tracking expenses throughout the year to monitor budget performance and know how to adjust if needed. Also, schedule periodic budget review meetings to assess progress, make adjustments, and ensure financial goals are being met with the budgeting team, administrators, teachers, or the school board. Ensure all financial records and documentation are organized and ready for potential auditing from outside sources or your leadership!

12. Train Staff on Budget Procedures

Educate staff involved in budget management on the procedures, guidelines, and responsibilities related to the budget. If you’re implementing new budgeting software, make sure those who will access it are comfortable with the tool before the school year begins.

Every academic institution is different and will have different needs. Whether you manage the budget for an elementary school, middle school, high school, college, or other organization, this school budgeting checklist is a great starting point! Refreshing the way a budget manager plans for the school year can help ensure responsible financial decisions that directly impact your staff, teachers, parents, and students.

Top Challenges in Managing a Budget for Schools Effectively

Most schools face the following challenges in budget management:

Limited Staff Capacity and Financial Expertise

Many schools are understaffed or stretched thin and lack the right financial professionals. Not all school leaders have the necessary financial expertise to handle budgets, reporting, fund accounting, and forecasting. 

The lack of capacity can lead to costly budgeting errors, delayed reporting, faulty forecasting, or missed funding opportunities. 

Limited Financial Transparency

Schools often lack transparent, accessible, and real-time visibility into financial data, which hampers their ability to make informed decisions. 

Without timely access to financial data, your school may miss opportunities to cut unnecessary expenses, reallocate funds, or invest in high-priority areas. 

This pitfall is easy to address if you use dedicated financial tools and clear reporting dashboards, review budgets regularly, and train your staff on financial literacy. 

Inadequate Financial Planning Tools

Many school districts still use outdated and disconnected tools like spreadsheets, legacy systems, or basic accounting software. 

These tools cannot support the required real-time forecasting, multi-fund tracking, or compliance reporting. Schools need centralized, accurate, transparent, and collaborative budgeting software. 

As a cloud-based financial planning software, Martus can help schools develop multiple budgets, make data-driven decisions, and maintain compliance. 

Martus can also help you align spending with the school's strategic goals, reducing errors and saving up to 50% of time. 

The good news is that Martus integrates with popular accounting software like Sage Intacct to complete your accounting system to reinforce its budgeting, forecasting, and reporting functionalities. 

Martus is also intuitive and easy to use, which streamlines financial management and reduces the need for extensive training for teams with limited financial knowledge. 

Ready to ditch spreadsheets and inadequate financial planning systems?

Schedule a consultation with us today to learn more about Martus’s capabilities and how it can transform your school budget planning. 

Future Trends in Schools' Budget and Strategic Allocation

As public school budgeting and resource allocation become more complex by the day, the trends below will be common going forward:

• Data-Driven Budgeting: School budgeting will rely more on data analytics through financial management software to optimize resource allocation and reduce forecasting errors. More schools will adopt technological advancements to increase efficiency in the budgeting process by reducing the time teams spend on outdated spreadsheets and legacy tools. 
• Centralized Consolidation: Even as different school departments work on their budgets individually, schools will adopt a collaborative approach that combines the budgets of different stakeholders. The consolidated inputs of different teams will result in unified budgets with consistent forecasts and reports while respecting the needs of each stakeholder. 
• Diversifying Funding Sources: As public sector education funds decline, schools will look for alternative revenue sources, such as increased donations from private benefactors. 

Frequently Asked Questions (FAQs)

Let's close the discussion with common questions regarding school budget planning. 

What Is the Role of a Principal in School Budget Planning?

School principals oversee the allocation of the institution’s resources. They ensure the budget meets the school’s needs within the existing financial constraints. 

Principals manage funds for infrastructure, extracurricular activities, and instructional materials. 

How Often Should a School Revisit Its Budget?

A school can revisit its budget throughout the year to capture changes in funds and needs. You can revise the budget monthly, quarterly, or semiannually to compare budget vs actuals and adjust where necessary. 

Why Is Budgeting Education Critical for Policymakers?

Budgeting education equips policymakers with the knowledge and experience to allocate resources effectively, ensure financial accountability, and prioritize funding based on ever-changing school parameters. 

They can make informed decisions that directly affect equity, student success, and long-term planning. 

Budgeting also promotes transparency and public trust as policymakers can justify allocation and spending and advocate necessary investments in education from the government. 

What Happens When the Budget for Schools Falls Short?

When school budgets fall short, schools may face cuts to essential programs, drops in employee numbers, and reduced student performance. 

Students may struggle with reduced support services, limited extracurricular activities, or outdated educational materials. 

Financial problems may strain people's morale and compromise long-term planning, forcing schools to make reactive rather than strategic decisions.

Conclusion

Looking to improve the way you budget, or just wanting to make budgeting a whole lot easier on you? Martus Solutions is a Cloud-based budgeting software that allows you to create, execute, and analyze budgets with ease. This tool was designed simply enough for budget managers that might not be finance people, but is also robust enough for budgeting experts! Built for schools, non-profits, churches, small businesses, associations, and so much more, we have customers all over the world that budget better with Martus.

Learn how Onward We Learn’s CFA Officer took their nonprofit budgeting process to more productive, collaborative levels with Martus!

Ready to learn more? contact us for a free demo today!