School Business Affairs May 2019 SCHOOL BUSINESS AFFAIRS | MAY 2019 27 The Key Elements in Planning for the Future Financial forecasting is critical to helping district leaders meet district and student needs. By Tamara L. Mitchell FORECASTING & PLANNING anticipation warrants, and voter referenda. A financial forecast can be as simple as a one-page summary or as complex as a multipage workbook, depending on the target audience. The forecast’s sophistication can vary as well; tools can be created using basic spreadsheet software or custom software designed specifi- cally for such documents. Gathering Information The most crucial aspect of prepar- ing a financial forecast is being well informed and knowledgeable from the start. Being well informed means: P reparing financial fore- casts is a fundamental and exceedingly important school business task— especially during times of fiscal uncertainty. Financial forecasting can range from projecting revenues and expen- ditures by month to projecting them for many years. School business officials use forecasting to build the annual budget to meet immediate needs and rely on three- to five-year forecasts to provide the financial road map for the future. The Importance of Financial Planning and Forecasting Financial forecasting is not an exact science, but is critical to helping district leaders meet the needs of the district and its students. Although the data for financial forecasts beyond the five-year mark are less reliable, forecasts 10 years out may still be useful in predicting the dis- trict’s long-range financial position. In addition to estimating annual financial performance, school business officials use financial forecasts for: • Planning curriculum adoption, instructional equipment pur- chases, athletic and extracur- ricular uniform refreshes, and technology upgrades. • Planning instructional programs and extracurricular opportunities. • Determining whether revenues will support current and projected staffing levels and needs. • Determining feasibility of pro- posals presented during labor contract and service contract negotiations. • Coordinating and prioritizing facility maintenance and construc- tion projects. • Ensuring compliance with local or state minimum fund balance requirements. • Guiding discussions on alternate financing options, such as short- and long-term debt issuances, tax PESHKOV/STOCK.ADOBE.COM