The North Carolina state budget Concept

Introduction

The North Carolina state budget features education as one of its major budget components. Under education, this study focuses on the department of public instruction. The North Carolina Department of Public Instruction (NCDPI) implements North Carolina’s public school policies, procedures, and laws directing public education from pre-kindergarten to the 12th grade. The department and its functions are led by the elected State Superintendent of Public Instruction (North Carolina, 2021). The superintendent operates under the State Board of Education’s policy directions. The NCDPI provides yearly funds for federal and state public schools.

  1. Submission Process

The budget process entails the budget creation and approval processes. The method facilitates the determination of expenditure levels for NCDPI. It occurs in several vital phases, beginning with the relevant education sector regulators consulting with the financial service department to prepare worksheets to guide the NCDPI to prepare its budget projections. The department’s administrators cooperate with managers to present and deliberate the plans for the subsequent year’s anticipated activity levels.  The managers then consult with the financial services to create the department’s following financial year estimates. In conjunction with other critical stakeholders, the managers present the finished budgets to the department’s executive officers for evaluation and sanction. The executive may require that such approval is in writing to confirm the budget.  Since managers consult with the administrative officers regarding the required budget components, the submissions may be altered at this stage.

  1. Budget Format

NCDPI utilizes the line-item budget format, as seen in the presentation by Cooper (2019), who outlines the agency’s most current budget. Its budget format is characterized by the primary principle of fostering financial accountability and avoiding misappropriation and wastage by ascertaining that allocated monies are utilized for the intended objective. The line-item format is characterized by the columnar listing of the department’s budget items. Multiple expenses categories are listed column-wide to allow comparisons with the previous year’s expenses.

The projected expenses are derived from focusing on the previous year’s estimated and actual expenses as the ‘base’ that allows comparisons of the initial and current years’ budgeted expenses. Besides, the format uses various formulas, such as ‘fair share’ for budget balancing. The format depicts the main actors in balancing the department’s budget as the primary office budget managers, accountants, and other interested sanctioned parties. Constituency advocates in the state’s legislature are other vital actors in the department’s budget.

  1. Revenue Sources

North Carolina’s state budget is intricate and fluid because it depends on projected revenues and scheduled overlays vulnerable to changes in a financial year’s course. The implication is that it must accurately project its expenditures and balance them accordingly because of the constricted funding resources. Nonetheless, various revenue sources help the NCDPI to finance its budget.  In 2018-19, North Carolina public schools spent approximately $9.1 billion. The department gets its highest funding contribution for public education from the state, which finances 63.4 percent of its budget.

If the expenditure exceeds the projections, the state may increase taxes to obtain more funding from people and businesses. The state may borrow funds by selling various treasury securities, such as treasury bills and notes.  North Carolina’s counties (local governments) provided $3.4 billion (26.4) percent to fund the budget, and the remaining $1.3 billion coming from the federal government as a 26.4 percent funding contribution. Besides, in 2019, the North Carolina education lottery gave North Carolina public schools got over $725 million in revenue, as noted by Luebke (2020).

  1. Challenges

A major challenge in managing the budget is the likelihood of inaccuracy that may upset other budget items’ functionality.  Generally, a budget is founded on several assumptions that nearly replicate the operating conditions presiding over its formulation. However, if the business environment changes significantly, the department’s expenses and revenues may change radically to cause sudden departure from the projected budget expectations. For example, the recent coronavirus pandemic has caused sudden reductions in the NCDPI’s operational budget. Today, North Carolina public schools lack the required student-to-nurse and student-to-psychologist ratios, implying that they are not well-prepared to support learners’ learning and health needs (The Hunt Institute, 2020).  

NCDPI cannot adjust its budget in real-time, implying that it lacks the funds to apportion more assistance to meet the states’ student learning needs. Thus, many students will encounter difficulties as they attempt returning to their learning schedules in the current COVID-19 pandemic. The state’s schools are under-resourced to allow students and teachers to adhere to the recommended fundamental health practices to curb the COVID-19 risk, such as through extensive and inclusive remote learning. Significant variations in the projected budget expectations have occurred due to the pandemic, given the unpredictable fluctuations in currency exchange rates and interests rates.  The pandemic has understandably left some schools financially-strapped, meaning they cannot invest in other possible learning alternatives, such as online learning that requires significant financial investments.

  1. Federal and State Submission Process

The yearly federal budget procedure commences with the federal agencies that have participated in internal budget preparation for at least six months submitting their budget proposals to the Office of Management and Budget (OMB) for evaluation. The OMB appraises the proposals and forwards them to the president, who then, with the OMB’s assistance, determines what they support. The agencies forward their ultimate applications to the OMB. After the OMB forwards these applications to the president, the approved requests may be incorporated in the President’s budget application to Congress. Congress forwards the appraisals to budget committees to assess each request’s economic viability and long-term financial prospects.

The senate budget committee deliberates and sanctions or denies each appeal and annual appropriation bills approved by the house. After Congress’ approval of the forwarded requests, the president sanctions or denies the request within ten days, and the new financial year commences with the requests incorporated in the budget (USAGov, 2019). Conversely, the state budget process features the given agencies working with their state’s financial departments to prepare the budget projections. Department administrators cooperate with the relevant managers to discuss the prospective activities regarding particular agencies and departments and create the following year’s financial projections.

The agency and department managers forward the sanctioned estimations to the department’s executive officers for final budget review and sanction. The forwarded agency or department-specific request may be mirrored in the next year’s state budgetary allocations. Both processes are similar because they entail budget requests proposals to a head authority for assessment. The authorized oversight agency reviews the proposals to determine their feasibility. The review may result in some requests being denied and others accepted or reviewed further.  The executive agency submits the proposal for further discussion and establishes the budgetary request after approval to appear in the next budget.

 

 

 

References

Cooper, R. (2019). State of North Carolina education Roy Cooper governor recommended base budget and fund purpose statements, 2019-21. https://files.nc.gov/ncosbm/documents/files/2019-21_Education_LineItemDetail.pdf

Luebke, B. (2020). Funding North Carolina public schools: Time for a change? https://www.nccivitas.org/2020/funding-north-carolina-public-schools-time-change/#:~:text=N.C.%20General%20Statutes%20115C%2D408,instructional%20expenses%20from%20state%20revenues.&text=This%20total%20includes%20all%20funding,from%20the%20state%20(63.4%25).

North Carolina. (2021). Public Instruction, Department of. gov/agency/public-instruction-department“>https://www.nc.gov/agency/public-instruction-department

The Hunt Institute. (2020). COVID-19 Funding relief: State and federal supports for North Carolina’s education system. https://hunt-institute.org/resources/2020/04/covid-19-funding-relief-state-and-federal-supports-for-north-carolinas-education-system/

USAGov. (2019). Budget of the U.S. government. https://www.usa.gov/budget

 


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