ERIC Identifier: ED336865
Publication Date: 1991-10-00
Author: Peterson, David
Source: ERIC Clearinghouse on
Educational Management Eugene OR.
School-Based Budgeting. ERIC Digest, Number 64.
School-based budgeting decentralizes fiscal decisions by putting them in the
hands of principals and, often, teachers and community members. The practice is
not for every school district. It requires substantial time, training, and
cooperative participation, but it can also bring significant benefits in staff
involvement and community support.
WHAT ARE THE ADVANTAGES OF SCHOOL-BASED
School-based budgeting (SBB) is usually adopted as part of a
comprehensive school-based management plan. The purpose of SBB is not to reduce
costs but to improve school productivity by altering authority relationships
within the district, say Wohlstetter and Buffett (forthcoming), who studied the
implementation of SBB in Chicago, Dade County (Florida), Detroit, Edmonton
(Canada), and Los Angeles. As one participant in the reform said, what "really
sells" school-based budgeting is that "decisions are made closest to the
student" (Spear 1983).
SBB offers many people a greater sense of participation in and ownership of
public education. Principals get an opportunity to develop fiscal and managerial
skills. Participating teachers, support staff, parents, and students may gain a
greater stake in the broader educational system. Since these people reap the
benefits of fiscal efficiency, they usually become more sensitive to
cost-cutting measures ranging from better use of staff time to turning off
lights in vacant classrooms. Parents and other community members who participate
in their schools' budget decisions often become more sensitive to the link
between district levies and school services.
Teachers, principals, and parents in Albuquerque, New Mexico, high schools
cited several concrete benefits after a pilot year of SBB: extra money for
supplies, custodial overtime, more effective staffing, added professional leave
time for teachers, and more telephone lines (Robinson 1987).
WHAT ARE SOME POSSIBLE PITFALLS OF SCHOOL-BASED
Moving budgeting decisions from the central office to the schools
is no panacea. Indeed, the weight of high expectations may doom otherwise sound
projects, particularly if participants are not prepared to invest a lot of time
in the process. One high school parent, for example, remarked in a survey that
the system "has been somewhat helpful, but at a tremendous cost in manpower" (Robinson). Other respondents complained of unclear guidelines and poor
communications. SBB may compound existing problems if it is not effectively
planned and implemented.
"The actual benefits of school-site budgeting," notes Kehoe (1986), "will
depend to a great extent on the level of trust between the principal and
teachers." Principals may resist pressure to share the budgeting process with
teachers, and principals and teachers alike may work against a system that ties
funding to the achievement of measurable objectives or engenders favoritism or
Calvert (1989) argues that SBB suffers from being "principal-based
budgeting." He asserts that principals are often unprepared for extensive
duties, may hide their failures, are not answerable to the electorate, and
seldom share their power with teachers or community members--attributes that are
counterproductive to decentralized authority. He cites a Canadian survey that
found that 78 percent of teachers in a school-based management system believed
that principals dominated the process.
Calvert also points out that SBB can lead to anomalies in a district's
schools. He uses the example of the Langley School District of Canada, where
five elementary schools decided to have no librarian. Average per student
library budgets for the district ranged from $4.37 to $21.75.
WHAT ROLE CAN THE CENTRAL OFFICE PLAY IN SBB?
office retains substantial authority within the schools under many SBB programs.
Central-office administrators may continue to control expenditures on items such
as maintenance and supplies to ensure uniformity of quality throughout the
district or to achieve economies of scale (Candoli 1991, Honeyman and Jensen
1988). Central-office administrators commonly exercise control over staff
salaries, which are ordinarily set at the district level.
Lausberg (1990) argues that district administrators may need to ensure that
schools do not neglect critical, low-profile services such as library
maintenance. Schools may also be tempted to buy inexpensive equipment that is
costly or difficult to maintain. Lausberg recommends that central-office staff
compile a list of high-quality products from which schools be required to
For all these reasons, fiscal experts in the central office remain important
under SBB. They continue to determine how much money each school will get, a
process complicated by the presence of more costly programs such as special and
vocational education. They may provide principals with technical assistance in
accounting and comparative cost analyses while encouraging them to be sensitive
to the district's larger needs, and they remain responsible for monitoring
schools' expenses and purchases.
HOW ARE DECISIONS MADE UNDER SBB?
There is no single system
of SBB. Honeyman and Jensen present three options for allocating decision-making
responsibility: the principal acting alone; the principal sharing power with
select administrators and department heads; and a more broadly representative
committee making decisions. Larger, more democratic committees require
substantial time and cooperation from their members, but they often promote a
broad sense of participation and accountability, two strong advantages of SBB.
For instance, principals in the Prince William County, Virginia, school district
must submit to and discuss budget plans with an advisory committee of teachers,
parents, and sometimes students, though only the superintendent and director of
school-based management can insist on changes (Neal 1989).
Although SBB delegates decision-making authority to school-based personnel,
the scope of authority is unequal. For instance, school-based personnel in Los
Angeles have relatively little fiscal power; they control spending on only
instructional supplies and substitute teachers, a tiny fraction of the budget.
In Edmonton, however, they control about 80 percent of expenditures, including
teacher salaries (Wohlstetter and Buffett).
Some districts allow schools to hire staff as they see fit, within parameters
set by the law and collective bargaining agreements. Hence, schools may be
tempted to hire inexperienced or part-time teachers to lower staff costs. Other
districts, wary of such practices affecting the quality of their teaching
staffs, allow schools to hire teachers on an average-cost basis. Under this
system, schools pay the district a flat, predetermined rate for each teacher,
regardless of the teacher's actual salary (Wohlstetter and Buffett).
Schools participating in SBB typically get to keep their surpluses. These
retained monies become discretionary funds. Chicago schools have used such
monies to hire an average of two additional educational-support staff annually
(Wohlstetter and Buffett).
HOW CAN SCHOOL-BASED BUDGETING BE IMPLEMENTED?
budgeting requires cooperation, particularly from the school board,
superintendent, and principals. Neal argues that a certain amount of
disagreement should be expected in the early stages of implementation, and that
particular care must be taken with collective bargaining agreements and
central-office administrators whose roles are shifting. Yet he urges
administrators to be assertive about the new system and to insist that it be
Training is a critical component of successful SBB. Teachers will need to be
prepared to submit detailed requests and justifications for monies and to sit on
advisory or decision-making committees. Principals require particularly
extensive training to fulfill their new responsibilities.
Kehoe recommends two to three years' preparation before implementing SBB: the
first for reviewing options, the second for training, and the third for
beginning the new system. The Prince William County district started by hiring a
consultant and then established a twelve-person task force composed of
Like more centralized systems, SBB often requires adjustments during the
year. Candoli urges schools to be scrupulously honest and open about these
adjustments. Indeed, principals, teachers, and others who participate in SBB are
less apt to blame central-office administrators for negative fiscal
developments. If properly done, the reform can make the school budget everyone's
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Calvert, John. "The Dangers of School-Based Budgeting." OUR SCHOOLS/OUR
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Candoli, I. Carl. SCHOOL SYSTEM ADMINISTRATION: A STRATEGIC PLAN FOR
SITE-BASED MANAGEMENT. Lancaster, Pennsylvania: Technomic Publishing Company,
1991. 245 pages. ED 327 921.
Honeyman, David S., and Rich Jensen. "School-Site Budgeting." SCHOOL BUSINESS
AFFAIRS 54,2 (February 1988): 12-14. EJ 365 996.
Kehoe, Ellen. EDUCATIONAL BUDGET PREPARATION: FISCAL AND POLITICAL
CONSIDERATIONS. Reston, Virginia: Association of School Business Officials
International, 1986. 27 pages. ED 282 287.
Lausberg, Clement H. "Site-Based Management: Crisis or Opportunity?" SCHOOL
BUSINESS AFFAIRS 56,4 (April 1990): 10-14. EJ 406 862.
Neal, Richard G. "School-Based Management Lets Principals Slice the Budget
Pie." EXECUTIVE EDUCATOR 11,1 (January 1989): 16-19. EJ 383 853.
Robinson, Carol. SCHOOL-BASED BUDGETING SURVEY STUDY OF PILOT SCHOOLS.
Albuquerque, New Mexico: Albuquerque Public Schools, 1987. 24 pages. ED 300 922.
Sanders, K. Penney, and Francis C. Thiemann. "Student Costing: An Essential
Tool in Site-Based Budgeting and Teacher Empowerment." NASSP BULLETIN 74,523
(February 1990): 95-102. EJ 403 793.
Spear, JoAnn Palmer. "School Site Budgeting/Management: The State of the
Art." Paper presented at annual meeting of the American Educational Research
Association, Montreal, April 11-15, 1983. 14 pages. ED 231 082.
Wohlstetter, Priscilla, and Thomas Buffett. "School-Based Management: Are
Dollars Decentralized Too?" In RETHINKING SCHOOL FINANCE FOR THE 1990s, edited
by Allan Odden. San Francisco: Jossey-Bass, forthcoming.