Student Resource Package – Managing the Budget

Deficit management and workforce bridging

Background

Devolved budgets and workforce management responsibility have operated in Victorian schools since 1996. All schools are expected to have planning strategies in place to manage their workforce requirements within available funds.

The SRP allocates the available state government funding to all schools in a transparent and equitable manner based on student needs. The imperative for all principals is to manage their school within available resources. Deficit management and workforce planning support may be available to schools in circumstances where the school is not able to meet commitments within their allocated budget. Support is provided in these circumstances through a combination of:

• management support via workforce planning through:
  • Strategic Financial Management Advisors
  • Schools Finance Liaison Officers
• financial support via workforce bridging – if the shortfall is not linked to local management decisions.

This will assist schools to make the transition from a deficit to a ‘within budget’ situation.

Underlying principles

The SRP is allocated to all schools based on the principles of equity, consistency and transparency. The SRP is adjusted periodically to reflect salary and other cost movements, consistent with the State Budget and the prevailing Victorian Government Schools Agreement.

Schools operate in a devolved environment, where workforce planning and SRP management is the responsibility of the principal and school council. Principals are therefore expected to have a sustainable workforce management plan for their school that is capable of being funded within the SRP. Schools participating in re-organisations are also expected to undertake workforce planning within their overall budget allocation while giving due consideration to clauses contained in the Human Resources School Merger or Closure — Staffing Guide.

School workforce plans must include contingency planning to deal with changing circumstances. This includes accommodating potential budget changes linked to such factors as enrolment variations and changing workforce commitments including staff salary increments and leave returnees.

Regional and central office departmental staff are available to assist schools with the workforce planning process through the provision of management advice and support. The SRP Planner (accessible from the SRP Portal) provides a useful modelling tool for schools for this purpose. If credit deficits arise, whether or not caused by local management decisions, it is incumbent on the school to take action to remove the deficit, within appropriate departmental policy.

Procedures for assistance

Management advice and support

Since the first imperative is to manage the school's SRP to avoid a deficit, principals should develop a workforce plan that is capable of being funded within the SRP. Should this process identify that the school has a need for possible assistance, the principal should contact the Schools Financial Management Support Unit (SFMSU) in central office or their Senior Education Improvement Leader (SEIL). The SEIL may refer to SFMSU for further support.

Discussions regarding workforce bridging will encompass the overall financial position of the school, including salary mischarges, credit/cash transfers and accumulated surpluses. This analysis will involve assessment of the school’s capacity to manage within its budget.

Support

If potential workforce bridging support is identified, SFMSU will assign a support officer to work with the school and prepare a report for the Workforce Bridging Panel. The support officer and school principal will develop a workforce bridging report based on the school’s workforce plan that will include strategies to return the school to a sustainable budget position. Factors considered in determining whether workforce bridging financial assistance is provided include:

• the budget shortfall is not the result of local management decisions
• the school has a viable deficit management strategy
• the school undertakes to consult with the SFMSU if it anticipates moving outside of its deficit management strategy.

On completion of discussions, the support officer will:

• provide the principal with a copy of the workforce bridging report
• submit the workforce bridging report to SFMSU who will present the report to the Workforce Bridging Panel for assessment and possible recommendation to the Deputy Secretary, Financial Policy and Information Services.

The Workforce Bridging Panel will meet as required and consists of:

• a Chairperson – Director, Schools Finance and Resources Branch
• a representative of People Division
• 2 practicing principals – one secondary and one primary
• a practicing Strategic Financial Management Advisor.

A letter confirming the Workforce Bridging Panel’s decision will be sent to the principal, with copies to the Regional Director and Regional Finance Manager. The principal will be asked to inform the school council of the Panel’s decision.

The level of support determined by the Workforce Bridging Panel and approved by the Deputy Secretary, Financial Policy and Information Services will be reflected on the School’s Budget Management Report.

The final amount of any workforce bridging financial assistance is subject to confirmation at the end of the calendar year as the amount is notionally approved and may be reduced subject to reconciliation of the school’s SRP.

Review

A process is available for schools that wish to have the decision of the Workforce Bridging Panel reviewed. Requests, outlining the grounds for the review, should be lodged within 14 days of the receipt of the letter confirming the Workforce Bridging Panel’s decision by notifying:

Manager
Schools Financial Management Support Unit
Department of Education and Training
Financial Services Division
GPO Box 4367
Melbourne 3001

If additional information is provided it should be explained why it was not included in the original report.

The review will, in the first instance, be considered by the Workforce Bridging Panel and may be referred to the Deputy Secretary, Financial Policy and Information Services.

Ensuring consistency

SFMSU has overall responsibility for the workforce bridging process and works with schools, regions, professional associations, and stakeholder reference groups to ensure that the process is supportive of schools, while remaining fair and consistent with the principles of devolved school self-management.