Twelve studies find that overall gains in charter schools are larger than other public schools; four find charter schools’ gains higher in certain significant categories of schools; six find comparable gains; and, four find that charter schools’ overall gains lagged behind traditional schools.
Source: Charter School Achievement: What We Know, July 2005 Update
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: Introduction
: Sample Annual Budget
: Additional Schedules
Introduction:
Annual Operating Budgets
This 1996/1997 budget from the St. Paul Family Learning Center Charter School is a good example of both a detailed charter school budget and a useful fiscal planning document. It should be remembered, however, that the specific estimates and cost projections used in this budget are unique to this school and to Minnesota's system for funding charter schools. Developers in other states are cautioned not to rely on these figures but instead consult with a charter school finance expert in their state. For more information on this topic, please see our Budget & Finance page.
An annual operating budget may serve a variety of purposes. First, and perhaps foremost, a budget is a fiscal reflection of the design principles of a school and a very concrete demonstration of a school's priorities. Second, a budget is a plan. It shows how much money a school anticipates receiving over the course of the year and how it plans to spend the money. Third, once approved by a school's governing board, the budget serves as the board's official authorization of the expenditure of the school's funds. Thus a budget may also serve an authorization and control function.
About The School
The St. Paul Family Learning Center, located in St. Paul, Minnesota, serves a diverse population of urban students under a charter granted by the St. Paul Board of Education. The school is the brainchild of Wayne Jennings, a school design expert and veteran school administrator. The school's design is based on the Community Learning Center's design created by Dr. Jennings as part of the New American Schools design effort.
Operating budgets usually list revenues by source (e.g., state general-purpose aid, state and federal categorical programs revenue, grants, earned income, etc.) while expenditures are usually shown by object (e.g., salaries, benefits, books, rent, utilities, etc.). It is often difficult to understand these figures unless some sort of explanatory material accompanies the budget and lists or explains the assumptions used to generate the revenue and expenditure estimates. The following narrative highlights the major assumptions and features of the St. Paul Family Learning Center budget and explains its major features.
Revenues
One obvious feature of this planning budget is the fact that it is actually three budgets. It shows anticipated revenues and expenditures assuming three different levels of enrollment: 66, 100 and 120 students (see Line 1). School developers often ask how large a charter school must be in order to become economically viable. Under the budget assumptions shown in this school's planning budget, the school would need to serve between 66 and 100 students in order to be viable because the school would run a deficit of $63 thousand at 66 students and a projected surplus of $76 thousand with 100 students (Line 57).
Charter schools' revenues are largely dependent on the terms of the state school finance laws under which they operate and the schools' size and student population. This budget shows that charter schools in Minnesota receive funding from several different sources. The top listed sources include a state general-purpose aid program (Line 4), a compensatory aid program for schools serving disadvantaged students (Line 5), and a state transportation aid program (Line 6). The school also anticipates receiving funds from the federal Title I compensatory aid program (Line 10)--the federal government's largest K-12 aid program and federal funds for child nutrition. Finally, the school's budget anticipates receipt of grants from both the federal government's charter school grant program (Line 12) as well as grants from local charitable foundations (Lines 14 - 16).
As shown by the three columns, most revenues vary with the level of enrollment. Charter school developers should consult with charter school finance experts in their state in the development of the revenue side of their budget and should not rely on these figures which are unique to this school and Minnesota's system for funding charter schools.
Expenditures
The expenses listed in the budget are a combined reflection of the school's design principles and the fiscal realities of operating a charter school. This school places a relatively heavy emphasis on investing in technology at $350 per student (Line 25), staff development at $1000 per staff member (Line 26), field trips (Line 27), and instructional materials and supplies (Lines 28 & 29). Though the level of expenditures on these items may seem low by the standards of the private sector, they are quite high relative to most public school budgets where technology, staff development, and the like often must be trimmed.
Schools are typically very "people-intensive" institutions and spend the vast majority of their funds on staff salaries and benefits. The St. Paul Family Learning Center's budget focuses the majority of its funds on staff, but does so in keeping with the school's design principles. For starters, the school has an unusually long work year, due in large part to the extensive investment in many days of common staff planning time. The school also has a novel performance-based salary compensation program through its FLC Instructional Performance Pay Schedule and an accompanying Expectations of Staff policy. While the program provides a base salary of only $22,500 per teacher, teachers may make up to an additional $32,000 per year, depending on where they place on the performance-based schedule. These details are shown on Lines 97 & 105 of the budget and the subtotal is reflected on Line 32 of the expenditures.
Staff benefits are also a major expense and the budget assumptions underlying the figures are shown on Schedule D: Benefits (Lines 108-114) and are reflected in total on the budget at Line 33. They include 7.65 percent of salaries for federal Social Security and Medicaid (FICA) taxes, an employer-paid contribution toward professional staff retirement costs at 8.14 percent, and life, disability, health, and workers' compensation insurance. Instead of hiring a principal and business manager as part of the staff, the school contracts with the firm Designs for Learning, Inc., to provide management services (Line 35).
Like most charter schools, and unlike most public schools, the St. Paul Family Learning Center pays a very large proportion of its operating budget toward facilities lease costs, over $102,000 per year (Line 39). This high level of spending on facilities would bankrupt a typical public school and has been a major fiscal challenge for charter schools nationally. Fortunately, the state of Minnesota recently added a facilities aid component to its charter school finance system. This new source of state funds, combined with the fact that the school will grow to fill the leased site, will greatly enhance the school's budgetary position in 1997-98. The school also spends relatively heavily on telephones (Line 43) to ensure that all staff have access to both voice and Internet communications (Line 38).
Line 57 shows that the school's operational budget anticipates breaking even at between 66 and 100 students. As shown on Schedule A: StartUp Costs (Lines 64-68), however, startup costs of preparing and furnishing the facility and playgrounds are substantial and drive all three scenarios into the red--at least for the first year. Presumably these startup costs, if capitalized, could be paid off within a few years if the school continues to operate and is of sufficient size. Though not shown here, a long-term projection or breakeven analysis could be developed to display this in more detail.
Sample Annual Budget:
SAMPLE 1996/1997 BUDGET FOR A CHARTER SCHOOL
| 3/13/97 |
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Line |
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|
|
| Number of Students |
120 |
100 |
66 |
1 |
| |
|
|
|
2 |
| REVENUE |
|
|
|
3 |
| General revenue |
$404,104 |
$338,320 |
$204,871 |
4 |
| Compensatory Revenue |
$101,804 |
$84,836 |
$55,992 |
5 |
| Transportation Revenue |
$14,535 |
$12,169 |
$7,369 |
6 |
| TRA Reduction (above less WDAM*19) |
($2,121) |
($1,775) |
($1,075) |
7 |
| Food reimbursement Revenue |
$29,580 |
$24,650 |
$16,269 |
8 |
| DL Sub-lease, share of utilities, etc. |
$13,000 |
$13,000 |
$13,000 |
9 |
| Federal Title I funds |
$44,160 |
$36,800 |
$24,288 |
10 |
| Grants: |
|
|
|
11 |
| Federal charter school start up grant, Summer 1996 |
$50,000 |
$50,000 |
$50,000 |
12 |
| Federal charter school start up grant, Spring 1997 |
|
|
|
13 |
| Technology Enhancement |
$10,000 |
$10,000 |
$10,000 |
14 |
| St. Paul Foundation |
$5,000 |
$5,000 |
$5,000 |
15 |
| Bigelow Foundation |
$10,000 |
$10,000 |
$10,000 |
16 |
| |
|
|
|
17 |
| TOTAL REVENUE |
$680,063 |
$583,000 |
$395,715 |
18 |
Total revenue per student |
$5,667 |
$5,830 |
$5,996 |
19 |
Payable in July 96-June 97 |
$466,490 |
$390,195 |
$240,442 |
20 |
| Payable in Oct 97 |
$51,832 |
$43,355 |
$26,716 |
21 |
| |
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|
22 |
| EXPENSE |
|
|
|
23 |
| Advertising, marketing, and recruiting |
$3,000 |
$3,000 |
$1,100 |
24 |
| Computer Equip, repair, training ($350:student)-$10K |
$32,000 |
$25,000 |
$12,000 |
25 |
| Staff Development ($1000 * Instr. Staff) |
$8,400 |
$6,300 |
$6,000 |
26 |
| Field Trips ($40/student) |
$4,800 |
$4,000 |
$2,640 |
27 |
| Instructional materials and equipment |
$18,000 |
$15,000 |
$9,900 |
28 |
| Instructional supplies, library materials |
$7,200 |
$6,000 |
$3,960 |
29 |
| Dues and Subscriptions |
$1,000 |
$1,000 |
$1,000 |
30 |
| Office/General Supplies/Postage ($50/student) |
$6,000 |
$5,000 |
$2,400 |
31 |
| Payroll/Salaries (see Schedule C) |
$218,331 |
$180,630 |
$180,623 |
32 |
| Benefits (see Schedule D) |
$38,957 |
$32,269 |
$32,267 |
33 |
| Professional fees (legal and accounting) |
$4,500 |
$4,500 |
$3,000 |
34 |
| Principal/Bus Mgr Contract (3 percent of Revenue) |
$20,402 |
$17,490 |
$12,000 |
35 |
| Contract services |
$2,000 |
$2,000 |
$2,000 |
36 |
| Printing, copying (2000 copies @.05:staff) |
$11,660 |
$9,350 |
$5,000 |
37 |
| Internet Access |
$2,000 |
$1,500 |
$1,500 |
38 |
| Building lease ($9760/mo.) |
$102,471 |
$102,471 |
$102,471 |
39 |
| Utilities:water & sewer, electric, gas ($2000/mo.) |
$21,000 |
$21,000 |
$21,000 |
40 |
| Cleaning Contract ($575/mo.) |
$6,000 |
$6,000 |
$6,000 |
41 |
| Maintenance, repairs, custodial supplies |
$2,000 |
$2,000 |
$2,000 |
42 |
| Telephone ($3500+$700:50 students) |
$5,180 |
$4,900 |
$4,424 |
43 |
| Insurance-Property and Liability |
$4,000 |
$4,000 |
$4,000 |
44 |
| Grass-snow removal, pest control, security |
$4,000 |
$4,000 |
$4,000 |
45 |
| Transportation |
$17,000 |
$17,000 |
$17,000 |
46 |
| Food Service |
$29,580 |
$24,650 |
$16,269 |
47 |
| Technology Enhancement |
$7,000 |
$7,000 |
$7,000 |
48 |
| |
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|
|
49 |
| SUBTOTAL EXPENSES |
$576,481 |
$506,061 |
$459,555 |
50 |
| Total expenses per student |
$4,804 |
$5,061 |
$6,963 |
51 |
| |
|
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|
52 |
| Extended Day (24 hrs:$20 hr:day) |
$0 |
$0 |
$0 |
53 |
| |
|
|
|
54 |
| TOTAL EXPENSES |
$576,481 |
$506,061 |
$459,555 |
55 |
| |
|
|
|
56 |
| REVENUE LESS ALL EXPENSES |
$103,581 |
$76,940 |
($63,840) |
57 |
| ADDITIONAL BUDGET SCHEDULES FOR A CHARTER SCHOOL |
|
3/13/97
|
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|
Line
|
|
Number of Students
|
120
|
100
|
66
|
62
|
|
|
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|
63
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SCHEDULE A: STARTUP COSTS
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|
64
|
|
Capital Equipment & Improvements ($2000:student)
|
$240,000
|
$200,000
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$132,000
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65
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Office and Classroom Furniture ($100:student)
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$12,000
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$10,000
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$6,600
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66
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Playground Equipment & Facilities
|
$10,000
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$10,000
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$10,000
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67
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Total startup capital required
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$262,000
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$220,000
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$148,600
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68
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69
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SCHEDULE B: OPERATING ASSUMPTIONS
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|
70
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Number of students, Reg-K
|
25
|
20
|
23
|
71
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Number of students, 1-6
|
95
|
80
|
43
|
72
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Number of students, total
|
120
|
100
|
66
|
73
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|
Number of WADM
|
113.95
|
95.40
|
57.77
|
74
|
|
Number of school days
|
170.00
|
170.00
|
170.00
|
75
|
|
Number of Lead Teachers
|
0.00
|
0.00
|
0.00
|
76
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Number of Teachers (1:33 students)
|
3.60
|
3.00
|
3.00
|
77
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Number of Special Ed teachers
|
0.50
|
0.50
|
0.50
|
78
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Number of LEP teachers
|
0.50
|
0.50
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0.50
|
79
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Number of Health Service Workers
|
0.20
|
0.20
|
0.20
|
80
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Number of Paraprofessionals (1:25 students)
|
4.80
|
3.30
|
3.30
|
82
|
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Number of Secretaries
|
1.00
|
1.00
|
1.00
|
83
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Number of Custodians
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0.00
|
0.00
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0.00
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84
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Number of Clerks
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0.00
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0.00
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0.00
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85
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Per student-Instructional materials
|
$150
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$150
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$150
|
86
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Per student-Library materials
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$60
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$60
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$60
|
87
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Per student-General Revenue
|
$3,546
|
$3,546
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$3,546
|
88
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Per student-Compensatory Revenue
|
$3,205
|
$3,205
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$3,205
|
89
|
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Percentage of students on AFDC
|
26.47%
|
26.47%
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26.47%
|
90
|
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Per student-Transportation Revenue
|
$170.00
|
$170.00
|
$170.00
|
91
|
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Per student Transportation Transition (reduction)
|
($42.44)
|
($42.44)
|
($42.44)
|
92
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Per meal-Food reimbursement
|
$1.45
|
$1.45
|
$1.45
|
93
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|
94
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SCHEDULE C: SALARIES
|
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|
95
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|
Lead Teacher (@$40,000, 11 month)
|
$0
|
$0
|
$0
|
96
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Teachers (@$22,000, 10.5 month)
|
$79,208
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$66,007
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$66,000
|
97
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Substitute Staff (2% absence @ $70)
|
$2,523
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$2,023
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$2,023
|
98
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Paraprofessionals (@$16,000, 10.5 month)
|
$76,800
|
$52,800
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$52,800
|
99
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|
Secretary (@$24,000, 12 month)
|
$24,000
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$24,000
|
$24,000
|
100
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Clerks (@$12,000, 10 month)
|
$0
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$0
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$0
|
101
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Health Service Workers (@$24,000, 10 month)
|
$4,800
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$4,800
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$4,800
|
102
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Custodians (@$24,000, 12 month)
|
$0
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$0
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$0
|
103
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Contract
|
$16,000
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$16,000
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$16,000
|
104
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Competency-based salary increases (see FLC Instructional Performance Pay Schedule)
|
$15,000
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$15,000
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$15,000
|
105
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Subtotal
|
$218,331
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$180,630
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$180,623
|
106
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|
107
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SCHEDULE D: BENEFITS
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108
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FICA (7.65%)
|
$16,702
|
$13,818
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$13,818
|
109
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Retirement, Professional (8.14%)
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$6,448
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$5,373
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$5,372
|
110
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Life and Disability (.9%)
|
$1,965
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$1,626
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$1,626
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111
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Health and other insurance (.7%)
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$13,100
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$10,838
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$10,837
|
112
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Workman Comp-8868-.34 per $100
|
$742
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$614
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$614
|
113
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Subtotal
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$38,957
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$32,269
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$32,267
|
114
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