Finance & Business

The complete budget cycle can be viewed as a continuous five-step process shown below. Each of these steps requires board approval and is open for public inspection and comments. The process used by the school district is mandated by state law.

Property Tax levy

The process begins with submission of estimated property tax levy information to the Minnesota Department of Education (MDE) by mid-July. The MDE sets the maximum levy amount for each school district based on current legislation and formulas. This property tax levy information is reviewed, updated and certified by the Board of Education prior to the end of the calendar year. The collection of the property tax levy occurs during the calendar year and is intended to be utilized during the upcoming school year. For example, a tax levy for a coming year that is certified in December is collected in May and October of the following year and would be used for that coming school year.

Preliminary Budget

During the middle of each school year, the district moves to the second step in the process and begins development of the preliminary budget for the next school year. This process includes the completion of long-range enrollment projections, updating the five-year budget forecast, development of staffing guidelines and determination of revenue and expenditure assumptions to be included in the budget. This process also includes development of the capital expenditure budget for the next school year during the spring of the current fiscal year. The School Board must approve a budget by the beginning of the fiscal year (July 1) in which it will be used. This provides the district with spending authority as the initial estimates are revised and the actual enrollment is determined.

Final Budget

The third step in the budgeting process happens during the fall each year. The finance department updates the preliminary budget with revised estimates and staffing allocations, and develops the final budget. The revisions are based on any changes in laws that affect education finance and are based on the actual enrollment on October 1 of the current year.

Budget Adjustments

The fourth step in the process is a spring budget adjustment based on revised information; spring adjustments are primarily focused on federal and grant programs. Because of federal program requirements, the district makes these adjustments to ensure that the revised budget is closely aligned with actual expenditures for the year. This adjustment allows for accurate funding for programs and provides the most accurate basis for developing the preliminary budget for the next fiscal year.

Annual Financial Report and Audit

The fifth and final step in the process is closing the books and preparing the financial statements. This occurs during late summer each year. During this period, the district undergoes an independent audit as required by state law. The auditors render an opinion on the district’s financial statements and accounting practices. The School Board typically reviews the audited financial report in late October.

The district currently has an AA- bond rating from S & P. This rating puts SSPPS in the top third of all Minnesota school districts rated by S & P. 

The S & P credit analysis report stated that the AA- underlying rating reflects the district’s commitment to sound budgeting practices and stable financial operations. S & P noted that given the affordability and likelihood of the lease payment, as reflected in the appropriation rating and the district's general creditworthiness, the outlook is stable for the district to proceed with the issuing of certificates of purchase as part of its building lease payment plan. Specifically, the credit report said that the lease features and terms were “standard with no unusual risks regarding timely payment of debt” and the outlook was “stable for all ratings.”