`A budget is the numerical expression of an organization's dreams that serves as a guide or measure of acceptable financial performance. " (Financial Planning for Non-Profit Organizations)

Planning

Getting Started

Think about the process that you use to develop a Head Start budget. Do you approach the task alone or with a group of staff? Think about when you begin the budgeting process in relation to the due date. Approximately how many days/weeks are you engaged in developing an annual budget?

Information Needed

Make a list of the information youneed to have available for the budget. What do you consider the most important information for the foundation of your annual budget?

Linking Program Planning and Budgeting

What is the relationship between the community assessment, program goals, and the annual Head Start budget? How do you determine that the budget you develop is a reflection of, and adequate to meet, identified program priorities?

Development Steps

The action steps serve as a general guide to budget planning and development and can be modified to meet specific program needs.

Action Step One: Establish Budget Planning and Development Team

The first step in the planning process is to establish a team to set the parameters for how the budget will be developed and provide input into the information base that will support proposed costs. It is suggested that, at a minimum, it be composed of the following:

• Program Director
• Fiscal Officer
• Program Managers
• Selected Staff Members
• Representatives of the Policy Council
• Representatives of the Board of Directors, School Board, or Tribal Council
• A Parent Representative

Action Step Two: Define Budget Development Process

The following are examples of the types of questions that will shape the dialogue about, and development of, the Head Start budget:

• How will the programs vision, goals, and objectives be defined?
• How will information concerning the previous years performance, both programmatic and cost, be reviewed and incorporated into the process?
• What factors of the external environment (e.g., community, funding sources, changes in the early childhood development field, etc.) will need to be considered?
• What factors of the program 's internal resources and capabilities (e.g., current staff qualifications, use of physical space, condition of vehicles and equipment, etc.) will need to also be considered?
• How will the program 's priority areas (e.g., expansion issues; staff development; priorities emerging from local, State, or Federal mandates; etc.) be identified and factored in?

Action Step Three: Establish A Budget Development Schedule

Establishing a schedule for budget development can help to integrate the process into the program's routine financial management tasks. The following are considerations for establishing a budget planning and development schedule:

• Whether budgets need to be developed for multiple funding sources and if they are in sync or staggered.
• How often critical information is collected and when it is made available before the conclusion of the fiscal year (e.g., community assessment data, self-assessment results, program plans and updates, audit reports, etc.).
• The timing of the budget approval process, taking into consideration internal reviews before submission to the Head Start Regional Office.

Step Four: Specify Program Goals

Three key pieces of information are crucial to program planning and budget development: the community assessment, the internal program self-assessment, and program plans.

• The objective of the community assessment is to determine what community factors will impact on the services needed and the expected level of program enrollment.
• Annual internal program self-assessments are designed to assess the internal needs of the program.
• The Head Start Program Plans are developed every three years and updated and revisited in the intervening years. The function of the plan is to address identified needs resulting from the community assessment, internal self-assessments and program reviews. The identified needs are translated into goals for each Head Start program area.

Action Step Five: Identify Needed Resources

Historically, most HS/EHS programs developed budgets based on available resources rather than the resources needed to meet program goals. Budgeting for needed resources provides some distinct advantages:

• Unmet needs are identified at the onset of the grant that allows for prioritizing the transfer of unspent funds among line items.
• Identification of unmet needs assists in complying with the bona fide need principle when spending available funds near the end of the grant period.
• Grantees can quickly apply for any additional funds that may become available.

Budget Changes

• After it has been developed and approved, how often is budget referred to for program implementation?

• How much future planning takes place in the development of the budget (e.g., forecasting of future needs? What is the process used for budget planning?

• Does your program establish funding requirements for program activities (e.g., determining spending requirements for successful attainment of goals)? If so, how?

• What is the level of involvement of your Governing Board and Policy Council in the development of the budget?

Sources:
     Fiscal Assistant