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3. Budget development and forecasting
3.1 Introduction
3.1.1 Purpose of a budget/budgeting in the education sector
A budget is a summary plan of the expected revenues and intended use of the revenues of an
organization. It also serves as a planning and business performance monitoring tool. A budget is a
composition of assumptions that results in a cohesive financial framework for current and future time
periods. These assumptions include:
1) Probable assumptions – assumptions that:
a) Management believes reflect the more likely set of economic conditions and planned
courses of action, suitably supported and that are consistent with Management’s
operating plans; and
b) Provide a reasonable basis of the budget’s use.
2) Hypothetical assumptions – assumptions about a set of economic conditions or courses of
action that are not necessarily the most probable in Management’s judgment, but are
consistent with the purpose of the budget and future directions of the enterprise.
VBE’s annual budgets are the financial outlines of the District’s educational program. Both the Board
and VBE regard the budgeting process as an important function/critical element of the management
and operation of the school district. The budgeting process serves as a means to improve
communications and goal-setting involving both the District and its stakeholders.
VBE submits its budgets to MEd in the Excel template prescribed by the Ministry. All school districts are
required to use the same format and template, enabling comparability of budgets and financial results
between the districts.
3.1.2 Defined financial terms
To support understanding of sections 3 and 4, the following terms are defined:
Term
Accumulated surplus
Definition
VBE’s net economic resources, representing that amount by which
all operating assets (financial and non-financial) exceed all
operating liabilities as recorded on the financial statements.
Consists of internally appropriated funds, prior years appropriated
surpluses and unrestricted operating surplus (each as defined
below)
Internally appropriated
Funds that are internally restricted by the Board for a specific
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