School districts are the fiscal agents of California's public school system and as such they are responsible for using the funds the state and federal government provide to deliver educational services to the state's children. In California, they must do so within a process prescribed by state law.

All California school districts operate on a fiscal year that begins July 1. The budget process, however, is virtually continuous.

• Forecasts of revenues, expenditures, and student enrollments begin in the fall, a year in advance. A preliminary budget is adopted prior to July 1 but generally continues to be adjusted.

• During the school year, the district confirms its financial status both officially and unofficially.

• After the books for that year are closed, the process ends with an audit certifying the accuracy of the district records.

While school district managers implement each step in this process, the elected school board holds final responsibility for adopting the budget, and making sure that the budget allows the district to meet its current and future financial obligations.

A local school district must balance the need to be fiscally solvent against state and federal expectations for academic performance, community expectations for services schools should provide, and staff expectations around their compensation and working conditions. Further, while fiscal responsibilities rest with school district officials, the educational enterprise occurs at the school site and in classrooms. That means that discretion over resource allocations is also a balancing act, this time between school site and district. School districts vary in the amount of decision-making power and flexibility they give their schools, depending on their size, staff, and traditions, including sometimes their collective bargaining agreements.

But regardless of how decisions are made, a district's top officials-its elected board and superintendent-remain accountable for how well the district balances all of these competing priorities and meets its legal obligations for financial responsibility. The state in turn has policies and procedures in place to help assure that districts are living up to that responsibility. And state law requires that the district conduct its business in public, giving community members and parents the opportunity to be informed and involved in the district budgeting process.