The state of California and all school districts are required by law to adopt a balanced budget each year.
This calendar shows the budget cycle for school districts and the state. It includes important legal deadlines, Education Code requirements, an outline of the budgeting process districts follow, and an overview of county office of education oversight responsibilities.
The fiscal year for both the state and school districts is July 1 to June 30. The state budget is extremely important because school districts depend on it for most of their revenue. This calendar shows the close timing in the summer between final approval of the state budget, school finance legislation, and the adoption of local district budgets. The state budget is often not approved by the deadline of June 30, forcing districts to begin the new fiscal year with only estimates of the amount of money they will actually receive.
School district budget development
District budget development takes place over several months. Within the deadlines shown on the calendar, districts develop their own schedules to:
- determine whether to hire or replace staff;
- negotiate contracts with all employees; and
Decisions depend on critical estimates of student enrollment, fixed costs, and commitments in employee contracts—as well as best guesses about how much money will be available.
The timing of some decisions is based on legal deadlines. For example, preliminary layoff notices to teachers must be delivered in March, with final notices in May. Thus districts must project enrollments and determine staffing needs long before they know their final revenues and expenditures for the current year or their income for the next one.
School district budget review and adoption
The district governing board (or "school board") and staff must submit a budget to the superintendent of the local county office of education by July 1. Prior to that, a public hearing on the budget is required bylaw. Most districts use a single adoption calendar, adopting their budgets by July 1 and then revising their estimates for revenues and expenditures after the state budget is final. A few districts go through a second (or “dual”) adoption process, which requires a second public hearing by Sept. 1.
Districts must publicly review their financial position at least twice during the school year. They do so by issuing interim reports for the period sending Oct. 31 and Jan. 31. At this time, they certify their ability to meet their financial commitments through the rest of the school year and two subsequent years. They must submit these reports, along with their final financial statements and annual fiscal audits, to the local county office of education.
County office of education oversight
Under state law, county superintendents have a number of oversight responsibilities related to district finances. They monitor all districts’ budgets, ongoing financial obligations, and multiyearcontracts. Originally put in place in 1991, these responsibilities were strengthened and expanded in 2004 with the passage of Assembly Bill (AB) 2756. (In a similar manner, the state superintendent of public instruction reviews the finances of county offices of education.)
County superintendents can approve, conditionally approve, or disapprove the district budget. If the county disapproves the budget, then the county superintendent either calls for the formation of a budget review committee or appoints an adviser. If the committee (or adviser) and the state superintendent both disapprove the revised budget, then it is up to the county superintendent—in consultation with the state and the local school board—to develop and adopt a budget for the district.