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Resources in Financing Educational Activities
Several statistics were found after analyzing PEIMS Financial Reports for the period from 2021 to 2022. Speaking about total district revenue for Alief independent school district, it was determined that this figure is about $408,697,695 for the General Fund category (Texas Education Agency, 2022). This financing aspect is partially different for All Funds, which is $436,977,695 (Texas Education Agency, 2022). It should be borne in mind that this difference is determined by what financing parameters are included in these categories. The revenue per student was determined using these data, which are $10,056 and $10,752, respectively (Texas Education Agency, 2022). It is worth noting that this indicator is significantly higher than the national average. Consequently, these indicators allow us to determine the financial capabilities of the educational institution. Based on these values, it is possible to decide on the concentration of resources in financing educational activities.
Local and State Sources
Considering the percentage of the revenue from local sources, it should be noted that this indicator is 42.39% for the General Fund and 39.65% for All Funds. Concerning State Operating Funds, where this indicator is 52.44% and 49.08%, respectively, local resources are slightly lower (Texas Education Agency, 2022). Therefore, it is worth paying attention to the fact that these categories form the basis of the financing of educational institutions. Furthermore, there is a third category, which reflects the federal revenue amount. This indicator is 4.36% for the General Fund, which is a reasonably low indicator (Texas Education Agency, 2022). This is determined by the fact that, in reality, it is 10-13%. Several reasons for this difference should be highlighted. This is determined by the All Funds category which includes an expanded number of financing aspects. These are often tuition, state appropriations, restricted income and expenses, direct and indirect research, gifts, and endowment. Thus, these are optional and additional categories that significantly expand the district’s financial capabilities.
Fund Balance
The difference between a fund’s assets and liabilities is referred to as the fund balance in accounting. Fund balance reflects the net cash after all revenues have been deposited and all costs have been paid for cash-based institutions. One of the main objectives for developing a fund balance strategy is to provide adequate cash flow to satisfy operating requirements. Governments keep an unrestricted fund balance of at least two months’ worth of revenues or 16.7%. Considering the report, it can be found that Total Operating Expenditures amount to about $430,651,732 (Texas Education Agency, 2022). Assessing this indicator, it should be noted that the fund’s balance is negative and amounts to $21,954,037 (Texas Education Agency, 2022). Therefore, it can be concluded that the district has many obligations that current funds and funding sources cannot cover. To mitigate present and future risks, governments must ensure constant levels of financial balance. It manifests itself in income deficits and unexpected expenditures as well as the need to maintain steady tax rates. In most circumstances, fund balance debates should center on a government’s general fund.
Because the General Fund is the primary fund through which most operations are funded, including state aid and municipal taxes, the fund balance of the General Fund is crucial. The quantity of unassigned fund balance is a significant factor used by rating organizations when evaluating school bonds. Bond-rating organizations view unassigned fund balances as an indication of a school district’s financial resilience and express concerns when fund balances decline. Government fund balances do not necessarily reflect cash on hand or funds available for spending.
Expenditures by Function
Analyzing the category of Total Operating Expenses by Function, the viewer can find several spending criteria that are important or, on the contrary, may seem irrational. In this case, a clear example is the cost of School Leadership, which is about $30,423,278 or 7.06% of the total (Texas Education Agency, 2022). This indicator ranks third in the list of expenses and has a reasonably significant amount of funds. It should be noted that leadership development is quite an important aspect that accompanies the development of the competitiveness of an educational institution. However, several categories can be defined as much more critical and significant, but much fewer funds are allocated for their maintenance. An example is Health Services, $7,489,301, and Curriculum & Staff Development, $5,549,472 (Texas Education Agency, 2022). These expenditure items make up a relatively insignificant percentage; however, a much larger amount of finance can be allocated for them.
This is determined by the fact that these categories are important enough to create a successful educational institution. Another category that caused some surprise is Transportation, for which $17,136,687 or 3.98% was allocated (Texas Education Agency, 2022). It should be noted that in this case, a significant amount of finance is allocated, which is difficult to determine objectively. On the other hand, we should consider the Instruction category, which accounts for the vast majority of the district’s expenses – $264,785,995 or 61.48% (Texas Education Agency, 2022). In this case, it is understandable why a significant amount of money is spent. However, it is necessary to analyze in much more detail what exactly the funds were spent on. It is possible that several options could make it possible to reduce such spending and direct funds to other categories.
Reference
Texas Education Agency. (2022).2021 – 2022 budgeted financial data: Totals for ALIEF ISD (101903).
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