June 22, 2007 Neil Bernstein, Swampscott School Committee 1

SPS financial forecasting, budgeting and tracking

SPS Financial Forecasting, Budgeting

and Tracking(Swampscott Public Schools)

Neil BernsteinSwampscott School Committee

www.schoolcommittee.nsbernstein.comJune 22, 2007

June 22, 2007 Neil Bernstein, Swampscott School Committee 2

SPS financial forecasting, budgeting and tracking

Agenda

• Background

• Financial Forecasting

• Financial Budgeting

• Financial Tracking

• Proposed Policies

• Spreadsheet Examples

June 22, 2007 Neil Bernstein, Swampscott School Committee 3

SPS financial forecasting, budgeting and tracking

Background - Purpose

• Dramatically reduce budgetary and operational “surprises”• Improved financial management

– More aggressive and disciplined approach

• Objectives –– Establish SPS new policies and goals– SPS implements policies– Align SPS financial management time line with Town time line

• Concept validation– Detailed examples are meant to demonstrate the concept, not

necessarily what actual reports may contain

• Note: This is my own “strawman” proposal

June 22, 2007 Neil Bernstein, Swampscott School Committee 4

SPS financial forecasting, budgeting and tracking

Background - Expectation

• Should be feasible and effective

• Questions to be answered, at this time:1. Does proposal capture all essential

components required to adequately address problem?

2. Is there anything extraneous in proposal?

3. Does proposal contain anything objectionable or inappropriate to public interest or any town bodies?

June 22, 2007 Neil Bernstein, Swampscott School Committee 5

SPS financial forecasting, budgeting and tracking

Financial Forecasting

• Financial forecast – Plan that represents an estimate of future

financial situation, based upon past trends, current financial status and expected range of changes, into the future under consideration.

• Town Charter– Currently requires two forecasts (although one

is referred to as a “Budget Plan” (1).

(1) Swampscott Town Charter

June 22, 2007 Neil Bernstein, Swampscott School Committee 6

SPS financial forecasting, budgeting and tracking

Financial Forecasting –Town Charter

• SECTION 9-9: Annual Financial Forecast– The town administrator shall report to the board of

selectmen, the finance committee, and the school committee no later than November 15 of each year and present a financial forecast for the next fiscal year detailing anticipated revenues, transfers and expenditures.

• SECTION 9-10: Five-Year Budget Plan– The town administrator shall submit as supplemental

information to town meeting a five-year budget plan detailing anticipated revenues and expenditures.

June 22, 2007 Neil Bernstein, Swampscott School Committee 7

SPS financial forecasting, budgeting and tracking

Financial Forecasting –Comments about Town Forecasting

• Town Administrator currently presents the “Five-Year Budget Plan” at the same time as the “Annual Financial Forecast”, by November 15th of each year.

• “Financial Forecast.”– I will refer to these, jointly, as the Town of Swampscott “Financial

Forecast.”

• Recommendation: – SPS follow a coordinated time line, in which SPS “Financial

Forecast” will inform subsequent Town of Swampscott Financial Forecast, and both Town of Swampscott Financial Forecast and SPS Financial Forecast will inform public, in preparation for a subsequent public comment hearing on SPS Financial Forecast.

June 22, 2007 Neil Bernstein, Swampscott School Committee 8

SPS financial forecasting, budgeting and tracking

Financial Budgeting

• Budgeting refers to the process of preparing a financial plan for a specific fiscal year.

June 22, 2007 Neil Bernstein, Swampscott School Committee 9

SPS financial forecasting, budgeting and tracking

Financial Tracking

• Financial Tracking refers to the process of comparing actual funding and expenditures to the planned (forecasted or budgeted) funding and expenses.

June 22, 2007 Neil Bernstein, Swampscott School Committee 10

SPS financial forecasting, budgeting and tracking

Proposed Policies

• Attached, under separate cover, are proposed changes to SPS Policy. All changes are highlighted by appearing in red, italicized font (2).

(2) Due to the convoluted nature of the NEPN/NSBA classification, new proposals have temporary “numbers.”

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SPS financial forecasting, budgeting and tracking

Spreadsheet Examples

• Attached, under separate cover, are examples of “informative” spreadsheets and clear and concise graphs. (school_cost_tracking_070325c_nsb.xls)

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SPS financial forecasting, budgeting and tracking

Spreadsheet Examples (con’t)

• In the spreadsheet, are the following examples:– Tracking the SPS budget (3):

• School Budget 95-04

– Financial forecasts (4):• Town-GeneralFundForecast• Town-SurplusDeficitForecast

(3) Data compiled by copying summary page of Swampscott School budgets, which I found in Swampscott Library.

(4) Spreadsheet extracted from Town Administrator’s November 2006 Powerpoint presentation, from which I created town deficit graph.