Upton Massachusetts Nipmuc Regional High School Budget Problems

Introduction

The Upton Massachusetts Constitution and Title 15 of the Upton Massachusetts Revised Statutes, which were enacted into law by the Upton Massachusetts Legislature, govern School Budget and Finance systems in Upton Massachusetts. School districts are required by law to follow the prescribed budget formulas to determine the budget available to that school district. Several factors must be taken into account and guidelines followed when budget formulas are being constructed.

Analysis

Upton Massachusetts's school finance process uses a lot of acronyms that refer to specific sections of the budget and their revenue sources. Some of these are historical. Prior to 1980, Upton Massachusetts school districts funded their budgets primarily from local property taxes. Although they did receive state aid on a per pupil basis, it was supplementary and there was no restriction on local expenditures other than they had to spend it all each year because none could be carried over. The property tax portion of their budget had an exception, called "30/60" levies, which allowed schools to levy a thirty cent tax rate (unified districts could levy sixty cents) on whatever property they had in their districts and accumulate it from year to year in a capital reserve.

In 1980, the Upton Massachusetts Legislature implemented a major school finance reform that radically changed how schools were budgeted. All school districts were given precise spending limit amounts per pupil for maintenance and operation (M&O) expenses in one budget and precise amounts per pupil in another budget for capital. This “equalization formula” was implemented so as to provide equal dollars per pupil for school operations through a balancing of the local Qualifying property Tax Rate (QTR) and state financial assistance. The idea was to control the amount of revenue that school districts could raise, and the M&O limit was called the Revenue Control Limit (RCL), while the capital limit was called the "Capital Outlay Revenue Limit" (CORL). The RCL is actually the sum of the Base Revenue Control Limit (BRCL) and the Transportation Revenue Control Limit (TRCL). And each of these have a per-pupil formula to determine precisely how much money each school district would be allocated.

The state legislature also dictated that a system be implemented to uniformly maintain local school district financial records and reports. The system that was designed is the Uniform System of Financial Records (USFR). The USFR prescribes the minimum internal control policies and procedures for school districts for accounting, financial reporting, budgeting, attendance reporting, and state and federal compliance.

The first element in establishing a school district's working budget is determining the Expenditure Budget for the fiscal year. The Expenditure Budget is divided into several categories from which school districts may spend money throughout the fiscal year. To determine the amount of Expenditure Budget available, 3 of these categories involve formulas. Those categories are Maintenance & Operation, Unrestricted Capital Outlay and Soft Capital Allocation. The M&O fund is the general fund of the district and as such accounts for all financial resources ...