At fiscal year end we sometimes see that actual costs are significantly below budget and one of the causes can be “savings” in Special Education. I put “savings” in quotes because this does not usually reflect a reduction in costs. It often reflects improper budgeting, which can lead to a number of unfortunate consequences. Other priorities may have been delayed or denied due to “lack of budget” only to find that there were sufficient funds after all. This leads to discord with employee unions, accusations of “hiding money” and an overall lack of credibility.
I attribute this to thinking that Special Education costs are by definition a mystery. The argument goes that because we must serve all students according to their educational plans regardless of cost, and because individualized plans change over the course of the year, and because students enter the program during the year needing unanticipated services, we therefore are unable to build a proper budget.
Special Education budgets can suffer from what I call the “kitchen sink syndrome”. All possibilities are thrown in with a bit of extra contingency for good measure.
When making projections for next year plus two (as required in California) the level of over-budgeting can be large. Even layoff large. If any one thing tops the list of despised school district activities, I would say that it is unnecessary layoffs.
Budgets should be built from the bottom up and Special Education is no exception.
- Budget district office staff (with any known changes).
- Budget classroom teachers and classroom aides (not one-on-ones), based on known programs for the coming year, adjusted downwards for a vacancy factor.
- Budget substitutes to cover vacancies (costs are usually less than full time staff).
- Budget extra staff (usually one-on-one aides) based on a ratio, such as the last three years aide to total Special Education population ratio. Include a trend factor if costs are trending up (they usually are). Adjust by a vacancy factor and budget for substitutes.
- Budget contracted services and non-public schools based on last three years actual costs (not budgets) plus a trend factor.
- Budget supplies and other services based on classroom allocations and prior year costs (not budgets).
Refine this budget throughout the year, based on monthly meetings with the Special Education department. Review actual positions and contracts and adjust the budget accordingly.
Note that the budget developed in this manner will reflect expected costs based on actual staffing and expected year over year cost increases. It does not contain additional contingencies. This makes many program managers uneasy. They say “what if this or that happens.” But think about it. If every department were able to convince the business department to pad their budgets “just in case” then the overall budget becomes unreasonably over-inflated. Throughout the year, with careful monitoring, some departments are going to need more funds, while others may be on track to spend less. If overall budget increases exceed decreases, then, yes, we are going to have to tap into our reserves. Those Chief Business Officials who are extremely risk averse and don’t want to explain increases to their board may wish to pad the budget with one contingency line item. I don’t even recommend this*, but if it is done, the CBO at least knows the true dollar amount of the padding.
I have developed several tools for monitoring Special Education budgets. First of all it is necessary to determine who does what. Depending on the district some activities will be in special education and in others the same activity will be in business services. Determine who does what. Note that my worksheet contains some blanks. These are there as reminders that such items exist and need to be considered. Determine what all activities are and who will be doing what. Amend the worksheet as necessary.
Contracted services (including non-public schools) are usually second only to personnel as the highest cost item in Special Education. I recommend that staff maintain a database of non-public school and non-public agency contracts by pupil. Monitor monthly to identify savings and adjust the budget accordingly. A sample NPS database is available here.
While the above is not a complete guide to budgeting Special Education, I hope it sets you off in the right direction.
* I don’t recommend contingency budgets because they have to be budgeted as something, often as supplies, or contracts within the CBO’s budget. Then if an unforeseen even occurs the CBO can move all or part of this budget to the department that needs it. But this should raise eyebrows. The board and bargaining groups might well be puzzled that the district can suddenly cover an emergency without increasing the overall budget. It can erode confidence. Districts need to have strong reserves for this purpose. The board and the bargaining groups need to have open discussions about what constitutes an adequate reserve. I urge transparency in all matters.
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