Allocating Funds in Educational Budgeting

Petra Weisenborn

Lumpsum funding is commonly encountered in education. By lumpsum funding, we mean that an organisation receives an amount of money for a student without a breakdown in parts labelled how the organisation should spend the money. When allocating the received money to the teams with the students under their wing, an educational institution has several choices.

What we encounter when we implement budget tools for large educational institutions is their different reasoning in allocating money to the teams in their organisation.

They start their reasoning with a common starting point: the number and type of students in the teams. However, after that starting point, they argue from one of two perspectives.

Perspective 1

Every student needs a certain amount of teacher attention, depending on the type of student. This perspective uses student/teacher-staff ratios and enables a calculation of the number of teachers that the team needs to educate its students.

According to this perspective, the next step in the budgeting process is to use a teacher's average cost and calculate the amount of staff funding that the team needs to do its teaching job. When we arrived at this stage, we encountered two follow-up approaches in budgeting.

Approach A

Reasons that when the team follows the student/staff ratio, there is no need to make a detailed staff planning on individual employee level.

Checking the number of teachers in the team confirms that we've met the budget. In this approach, the financial budget will have equal amounts for funding and personnel costs.

Approach B

Approach B reasons that detailed personnel planning on the individual employee level is still needed to check if the planned staff of the team is suitable for its task. Personnel costs in the budget for the team are according to the detailed plan.

Perspective 2

The fee per student is a fixed amount the team can spend on staff or material according to its discretion. They can calculate the team's funding by multiplying the number of students by the fee per student. This perspective is more in line with the idea of lumpsum funding than perspective 1.

It acknowledges that a simple student-to-staff ratio may not always reflect today's diverse teaching practices. In this case, we always create detailed personnel plans to calculate costs and ensure effective use of funding. In the case of both perspective one and perspective 2, it is common to inspect the relative amount of personnel cost against the funding.

This interesting indicator is also part of the benchmark the government funding agency uses to compare educational institutions.

How To Handle These Perspectives In Budgeting

Both perspectives have their pros and cons. It depends on how the education authority wants to deal with it. The calculation process must be transparent to all. The different allocation methods require a flexible approach to your budget solution.

With XLReporting, we can configure your budgeting tool to follow perspective 1 or perspective 2, or in case not all teams use the same principle, both principles will be part of the implementation, and each team can budget according to its own chosen perspective. XLReporting helps you to make budgeting easy.

If you would like to learn more about our approach to educational budgeting, please contact our team for further questions or a demo.

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