One of the Board’s most important responsibilities is approving the annual budget and ensuring that the school’s financial plan supports its strategic priorities and long-term sustainability. While the administration prepares the budget, the Board reviews, asks questions, and approves the final budget. The Board also monitors financial performance throughout the year to ensure the school is operating according to plan.
The administration is responsible for developing the annual budget, but the Board is responsible for reviewing, asking questions, and approving the final budget. The Board’s role is not to build the budget line by line, but to ensure that the budget aligns with the school’s strategic priorities, is financially sustainable, and reflects responsible financial planning.
The Board is typically responsible for:
Approving the annual budget
Reviewing key assumptions (enrollment, staffing, tuition, exchange rate if applicable)
Ensuring the budget aligns with the strategic plan
Monitoring financial performance during the year
Approving major unbudgeted expenses (if required by policy)
Board members do not need to be accountants, but they do need to understand the major components of the school budget. Understanding where the school’s money comes from and how it is spent helps the Board make informed decisions and provide effective financial oversight.
Board members should understand:
Major revenue sources (tuition, fees, other income)
Major expense categories (salaries and benefits, facilities, programs, transportation, etc.)
Staffing costs as the largest expense category
The difference between operational and capital expenses
Whether the budget is balanced, surplus, or deficit
Key financial risks in the budget
Approving the budget is only the beginning of the Board’s responsibility. The Board should regularly review financial reports during the year to monitor whether the school is operating according to the approved budget and to identify any financial risks or significant changes.
During the year, the Board should monitor:
Actual revenue vs budget
Actual expenses vs budget
Enrollment vs budget
Cash flow
Forecast for the year
Any significant variances from the budget
Sample budget reports help illustrate how financial information can be presented to the Board in a clear and useful format that supports oversight and decision-making.
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