Instruction Budget Adoption and Revision
BP 3100

Note: Education Code 33129 requires the county office of education to develop its budget and manage its expenditures in keeping with standards and criteria adopted by the State Board of Education as listed in 5 CCR 15467-15479. Education Code 1040 and 1622 require all county office budgets to be adopted by the County Board.

Pursuant to Education Code 42120, if the County Board neglects or refuses to make a budget in accordance with law, the Superintendent of Public Instruction will not make any apportionment to the county office, of state or federal funds for the current school year.

The County Board of Education accepts responsibility for adopting a sound budget that is aligned with the county office of education’s vision, goals and priorities as developed by the County Board and County Superintendent of Schools or designee. The budget shall guide administrative decisions and actions throughout the year and shall serve as a tool for monitoring the fiscal health of the county office.

The budget to be adopted shall be from the best possible estimates provided by the County Superintendent or designee.

The budget shall show a complete plan and itemized statement of all proposed expenditures in each fund of the county office, of estimated ending balances and of all estimated revenues for the budget year, and shall include an estimate of those figures, unaudited, for the fiscal year immediately preceding the budget year.

Each year, the County Board and the County Superintendent or designee shall develop a plan to ensure that the budget is adopted within the time limits set by law.

The budget shall be developed in accordance with standards and criteria adopted by the State Board of Education. (Education Code 33127, 33129; 5 CCR 15467-15479) 
 
Note: The following optional paragraph may be revised as desired.

In reviewing the proposed budget, the County Board shall consider past, current and future fiscal obligations of the county office, stability of funding sources, enrollment trends, legal requirements and constraints, anticipated increases and/or decreases in the cost of services and supplies, use of one-time resources, categorical program requirements, and any other factors necessary to ensure that the budget is a realistic plan for county office revenues and expenditures.

Note: 5 CCR 15474 establishes minimum percentages or amounts that the county office must maintain as a general fund reserve for economic uncertainty. The following paragraph may be revised to reflect the specific percentage or amount applicable to the county office.

The County Board shall establish and maintain a general fund reserve for economic uncertainty that meets or exceeds the requirements of 5 CCR 15474.

Adoption of County School Service Fund Budget
 
Note: This section is based on Education Code 1620-1630 which addresses county school service fund budgets only. Fiscally independent county offices should revise this section to address their consolidated budgets. Fiscally dependent county offices may revise this section to address the County Superintendent budget, if the process for its adoption is identical to the one described below, or may add their process for adopting the County Superintendent budget after this section, if it is different from the process described below.

Pursuant to Education Code 1622, a public hearing must be held before the adoption of the county school service fund budget by July 1. The County Superintendent must present the proposed budget to the County Board in time to allow for the holding of the public hearing in accordance with law. The County Board may revise the following paragraph to specify the date by which the County Superintendent must present the proposed budget.

The County Superintendent or designee shall present the proposed county school service fund budget to the County Board as early as possible in the fiscal year preceding the budget year, to allow the County Board sufficient time to adopt the budget by July 1 in accordance with law.

On or before July 1 of each year, the County Board shall adopt a county school service fund budget for the budget year, and shall file the budget with the Superintendent of Public Instruction, the county board of supervisors and the county auditor. (Education Code 1622)

Before adopting the county school service fund budget, the County Board shall hold a public hearing. An agenda for this hearing shall be posted at least 72 hours before the hearing and shall indicate the location where the budget may be inspected. The proposed budget shall be available for public inspection at least three working days before this hearing. During the hearing, any taxpayer directly affected by the budget may speak to the proposed budget or any item in the budget. (Education Code 1620, 1622)
 
Note: Pursuant to Education Code 1622, on or before August 15, the Superintendent of Public Instruction must approve or disapprove the county school service fund budget and, if disapproved, provide the county office with recommendations regarding revision of the budget and the reasons for those recommendations.

In addition, Education Code 1622 gives county offices a choice of budget adoption methods. Under Option 1 -Single Budget Adoption Process (Education Code 1622(e)), the County Board holds a public hearing before adopting the budget by July 1 and may subsequently revise it by September 8 in response to the Superintendent of Public Instruction’s recommendations at a regular County Board meeting without a second public hearing. County offices wishing to use the single budget adoption method must notify the Superintendent of Public Instruction by October 31 of the immediately preceding calendar year. Under Option 2 - Dual Budget Adoption Process (Education Code 1622(c) and (d)), the County Board holds two public hearings, one before adopting the budget by July 1 and the other before adopting a revised budget by September 8. For such county offices the requirement to adopt a revised budget applies regardless of whether the initial budget was approved or disapproved by the Superintendent of Public Instruction.

OPTION 1: (Single Budget Adoption Process)

If the Superintendent of Public Instruction disapproves the county school service fund budget, the County Board and County Superintendent shall review and respond to his/her recommendations at a public meeting on or before September 8. That response shall include the proposed actions to be taken, if any, as a result of those recommendations. (Education Code 1622)

No later than 45 days after the Governor signs the annual Budget Act, the County Superintendent shall make available for public review any revisions made to the budget to reflect the funding made available by the Budget Act. (Education Code 1622)

OPTION 2: (Dual Budget Adoption Process)

On or before September 8, the County Board shall adopt and file with the Superintendent of Public Instruction, a revised county school service fund budget that reflects: (Education Code 1622)

1. Changes in projected income or expenditures subsequent to July 1

2. Any response to the Superintendent of Public Instruction’s recommendations

Before revising the budget, the Board shall hold a second public hearing in accordance with the legal requirements for the first public hearing. The revised budget and supporting data shall be maintained and made available for public review. (Education Code 1622)
 
Note: With either budget adoption process, Education Code 1622 requires the Superintendent of Public Instruction to approve or disapprove the revised budget by October 8. If the Superintendent of Public Instruction disapproves the budget, he/she must call for the formation of a budget review committee.

Budget review committee formation, convening procedures and timelines are set forth in Education Code 1623. Education Code 1626 provides that until the county office receives approval of its budget, it shall continue to operate on the basis of the last adopted budget for the fiscal year immediately preceding the budget year.

Transfer of Funds
 
Note: The following two paragraphs are optional and may be revised by the County Board as desired.

The County Board authorizes the County Superintendent or designee, without further approval, to spend within budget categories and to make transfers between budget categories, to meet necessary expenses. Any transfer of funds between budget categories shall be included in financial reports to the County Board.

The County Superintendent or designee may not transfer budget funds from the unappropriated fund balance without the approval of the County Board.

Budget Revision

Any proposed revision to the budget, in excess of $25,000, shall be incorporated into the next interim financial report or other County Board report and presented to the County Board for discussion and approval at a regularly scheduled public meeting of the County Board. A consultant’s contract for $25,000 or more that constitutes a budget revision shall require County Board approval. (Education Code 1280, 1281)
 
Note: Pursuant to Education Code 1302, the County Superintendent is required to bring to the attention of the County Board, salary increase or bonus for an employee of $10,000 or more, or increase in the retirement benefits of an employee.

Financial Reports

The County Board shall review two interim financial reports to be submitted by the County Superintendent or designee. The first report shall cover the county office’s financial and budgetary status for the period ending October 31 and the second report shall cover the period ending January 31. (Education Code 1240)

Legal Reference:

EDUCATION CODE
1040 Duties of boards
1042 Additional powers
1240 General duties; reports
1280 Revisions to annual budget
1281 Hiring of consultants
1302 Increases of salary or bonus of employees
1620-1630 County office of education budget approval
33127 Development of standards and criteria for local budgets and expenditures
33128 Standards and criteria
33129 Standards and criteria; use by local agencies
42120 Budget completion

GOVERNMENT CODE
7900-7914 Expenditure limitations

CODE OF REGULATIONS, TITLE 5
15467-15479 Criteria and standards for county office of education budget

Management Resources:

CSBA PUBLICATIONS
Professional Governance Standards for County Boards, September 2001
Maximizing School Board Leadership: Finance, 1996
CCBE PUBLICATIONS
County Board Member Handbook: A Guide to Effective Governance, 2000

WEB SITES
CSBA: http://www.csba.org
CDE, School Fiscal Services Division: http://www.cde.ca.gov/fiscal
California Department of Finance: http://www.dof.ca.gov
Legislative Analyst’s Office: http://www.lao.ca.gov
Association of California School Administrators: http://www.acsa.org
School Services of California: http://www.sscal.com

7/03

Policy Reference UPDATE Service
Copyright 2003 by California School Boards Association,
West Sacramento, California 95691
All rights reserved.