Budget Amendments

Budget Amendments

June 12, 2020 | Financial Management

When do you need a Budget Amendment?

During the fiscal year of a charter school, the school’s board may need to amend the school charter approved budget to reflect changes in operations, the educational programs, demographics, or enrollment since the beginning of school.

Budget amendments are an essential part of the budgetary process and are utilized to move funds from one account to another and, at times, to correct an accounting error that has been made.

A charter must amend the official budget before exceeding a functional expenditure category, i.e., instruction (11) administration (41), etc., in the total district budget.

There are two types of budget amendments:

  • Amendments that move budgeted funds between accounts but within the same function and object do not require Board of Trustee approval and can be processed at any time during the year
  • Amendments that move funds from one account to another and which also change function or object codes must by law be presented to the Board of Trustees for approval.

It is recommended that the finance department follow charter budget amendment instructions and procedures by making wise decisions regarding income and expenditure adjustments and transfers, and by completing the appropriate paperwork involved in the approved budget amendment process.

Use of Budget Amendments

While budget amendments are sometimes necessary, the effective charter administrator readily learns that the overuse of the adjustment and transfer process can send questionable signals to and raise serious inquiries from business department personnel, district-level administrators, and even charter board members, who in many schools have final approval over budgetary changes.

The annual financial and compliance report should reflect the amended budget amounts on the schedule comparing budgeted and actual amounts. The requirement for filing the amended budget with TEA is satisfied when the school district files its Annual Financial and Compliance Report.

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