About the District Questions

  1. What is the difference between the Operating Budget and the Capital Budget?
  2. What is the relationship between the FCPS Master Plan and the Operating Budget?
  3. Where does the greatest amount of money for school system operations come from?
  4. Does the county have to give the school system a certain amount of money?
  5. What share of the county budget does FCPS receive?
  6. How does the state decide how much state aid it provides to each county?
  7. What is most of the school system budget used for?
  8. How does the school system decide how much to give to an individual school?
  9. What factors would be responsible for an increase in the school budget?
  10. How are employee salaries and benefits determined?
  11. What are budget categories?
  12. What does FCPS do if something needs to be added to or changed in the budget after the school year begins?
  13. What does FCPS do to ensure operating efficiency?
  14. How does FCPS get its budget approved?
  15. How are budget decisions made?
  16. What opportunities do citizens have to influence budget decisions?
  17. What information is available from published budget documents?
  18. What is surplus fund balance and how does it come about?
  19. Some of the revenues from Maryland casinos are dedicated to the Education Trust Fund, or ETF. When will FCPS receive additional revenues from the gambling?
  20. How does a new charter school affect the operating budget?

What is the difference between the Operating Budget and the Capital Budget?

The Operating Budget supports the day-to-day operations of the school system, including the provision of teachers and other staff, supplies and materials, and other operational needs of schools and offices. It is funded largely through revenues from state and local sources.

The Capital Budget supports school construction, renovations, land purchases and other major “bricks and mortar” projects. It is paid for largely through debt assumed by Frederick County and funding from the State.

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What is the relationship between the FCPS Master Plan and the Operating Budget?

The Master Plan complies with Maryland’s Bridge to Excellence requirements and meets federal standards. It guides FCPS in all activities to improve student achievement and provides accountability for the results obtained. The Operating Budget aligns with the Master Plan, operationalizes it and provides a basis for its implementation.

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Where does the greatest amount of money for school system operations come from?

In FY2018, state and local funding were each 47% of the budget.  Much of the state funding is derived from a variety of state aid formulas. The Frederick County Executive and County Council determine how much of the overall county operating budget the school system will receive.  The majority of the county funds comes from taxes paid by residents - the property taxes and income taxes. The remaining sources of FCPS operating budget are federal funds (3%) and revenue from fees, interest income and other sources totals 3%.

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Does the county have to give the school system a certain amount of money?

State law obligates each county to provide the local school district with a minimum amount of local money, called Maintenance of Effort (MOE). Under this law, each school system must receive in local dollars at least equal to the per-student amount it received the previous year. In other words, if student enrollment increases by 5% compared to the previous year, the county must increase funding to maintain the per-pupil amount at the prior year’s level. In order to be eligible for FCPS share of state aid, the County must provide the MOE funding.

If a county decides to give a school system extra money for one-time projects, such as opening a new school or a new computer system, that amount does not count toward the requirement, if approved by the Maryland State Department of Education. MOE provides increases for basic enrollment growth, but the law does not address the effect of inflation on instructional materials and employee salary and benefits expenses.

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What share of the county budget does FCPS receive?

In FY 2018, the FCPS Operating Budget constituted 47% of all Frederick County Operating Budget appropriations. In most Maryland jurisdictions, funding for public schools is the largest part of the local budget.

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How does the state decide how much state aid it provides to each county?

State aid makes up 47% of the FCPS operating budget. Maryland provides aid to each county based on a variety of formulas, including such factors as student enrollment, county wealth, and the number of students eligible for Free and Reduced-Price Meals (an indicator of poverty).

Counties with lower property values or personal income receive a higher share of state aid than wealthier counties.

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What is most of the school system budget used for?

Approximately 87% of the Operating Budget pays for employee salaries and benefits (health insurance, life insurance, retirement contributions, social security taxes, workers compensation, and unemployment insurance). Under state law, salaries and benefits are determined through collective bargaining with employee unions. FCPS has three associations: the Frederick County Teachers Association (FCTA) for teachers and other professional staff; the Frederick Association of School Support Employees (FASSE) for supporting services staff; and the Frederick County Administrative and Supervisory Association (FCASA) for principals and other supervisors.

Other than the 87% of the budget that goes for compensation, other significant items in the budget are: fuel and energy cost 2%; contracted services 4%; textbooks and other materials of instruction 1% and tuition for students attending non-public schools 2%.

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How does the school system decide how much to give to an individual school?

Funding for individual schools is driven by formula allocations. In addition to the formula allocations, other school-based funds are held centrally until needs of the individual school are determined. Allocation formulas, most of which are based on student enrollment, determine how much individual schools receive. These formulas ensure that each school gets an equitable share of available human and financial resources.

The allocation formula sets how many staff members each school receives each year. As enrollment increases or decreases from year to year, schools may receive greater or fewer staff. If enrollment changes after allocations are completed, school staffing may change accordingly. Other staffing adjustments may relate to special programs offered at a school or other particular or unusual circumstances. Some positions, such as custodians and maintenance workers, are allocated according to the amount of space that must be maintained. Student enrollment also determines the funding for such items as textbooks and instructional and media materials.

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What factors would be responsible for an increase in the school budget?

Most of the annual increase in the FCPS budget results from the increased cost of providing existing services, not from new or expanded programs.

The largest factor increasing cost is employee salaries and benefits, which makes up 87% of the FCPS budget. Salary increases include the “step” increase paid to eligible employees for another year of satisfactory performance. “Steps” are specified annually for each pay level up to a maximum negotiated with employee unions. Turnover savings — resulting when a senior employee retires or leaves employment and is replaced by a more junior, lower-paid employee — can reduce the impact of step increases.

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How are employee salaries and benefits determined?

Collective bargaining agreements with each of the three employee associations determine salaries and benefits for FCPS employees. The unions are the:

  • Frederick County Teachers Association (FCTA) for teachers and other professional staff,
  • Frederick Association of School Support Employees (FASSE) for supporting services staff, and
  • Frederick County Administrative and Supervisory Association (FCASA) for principals and other supervisors.

The Board of Education is responsible for negotiating with each of the unions that represents employees. The state of Maryland determines which issues can be bargained, which issues may not be bargained (such as curriculum), and which issues may be bargained if both sides agree. Multi-year agreements may be “reopened” annually for certain issues.

Associations may negotiate the scope of benefits and percentage share of premiums that employees will pay, but they may not negotiate the total cost of benefits or the specific identity of third-party providers. FCPS is self-insured for health and dental insurance, meaning that it pays the actual cost for claims as they occur instead of paying premiums to an insurance company. Eligible FCPS employees are covered by the Maryland State Retirement and Pension System defined benefits plan. Monthly payments to members and beneficiaries are made upon retirement, disability, or death.

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What are budget categories?

The state of Maryland requires each school district to classify expenditures by category, generally the purpose of the expenditure. This allows consistent comparisons among school systems. Among the 15 major categories are Administration (Category 1), Instructional Salaries (category 3), Special Education (Category 6), and Student Transportation (Category 9). All employee benefits, regardless of the type of salary expenditure with which they are associated, must be budgeted in Category 12 Fixed Charges. The County government annually allocate to FCPS a lump sum budget identifying any funds that are considered one-time and non-recurring. The Board of Education decides how to spend the allocated dollars and appropriate into the major categories. The County Council approve the budget by major categories.

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What does FCPS do if something needs to be added to or changed in the budget after the school year begins?

Because the budget is a plan for a fiscal year, unexpected circumstances during the year may require changes in how money is spent. Given more revenue, such as a state or federal grant, the Board of Education may request approval to spend the funds by asking the County for a budget amendment. The Board of Education may not spend any money above the approved amount, no matter what the source, without County Council review and approval. If budgeted resources are insufficient, the Board may ask for a supplemental appropriation from local revenue sources.

Once the annual budget is approved, the Board of Education may transfer funds from one state category to another only with the approval of the County Council.

The Board of Education may, during the year, transfer funds within a state category. This type of transfer is between “objects” of expenditure, such as salaries, supplies, contractual services, equipment, or other expenditure and does not require County Council approval.

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What does FCPS do to ensure operating efficiency?

FCPS reviews all expenditures annually to make sure that resources are distributed fairly and used to achieve the goals of the school system’s Master Plan. Based on projected enrollment, number of professional staff, and other established factors, school-based resources are allocated by school annually according to budgeting formulas common to all schools and approved by the Board of Education. Central office leaders annually review the use of all personnel and other resources.

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How does FCPS get its budget approved?

In January the FCPS superintendent and staff recommend to the Board of Education an operating budget for the coming fiscal year that addresses systemic goals and priorities. The proposal includes budget increases necessary to maintain current programs, services and contracts for the planned student enrollment and employee base and to accommodate the rising cost of health insurance, fuel and other utilities. It also outlines improvements to provide the requisite quality and scope of services for students.

The Board reviews the proposal, takes it to public hearing in February, and then reevaluates and modifies it accordingly before forwarding the request to the County Executive by the middle of February. The County Executive submits the proposed budget to the County Council no later than April 15.  The County Council must approve the County Executive’s budget by May 31. After receiving the final appropriation amount from the County, the BOE will approve the budget by categories during June.  The fiscal year begins on July 1.

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How are budget decisions made?

FCPS annually re-examines the justification for all resources, including personnel. Many decisions depend on established factors, such as projected enrollment, building square footage, and collective bargaining agreements. The Superintendent of Schools recommends other budget changes, including program initiatives, reductions, staffing and realignments after receiving extensive input from the Budget Committee, the Board of Education, county elected officials, parents, employee organizations, and citizens. The superintendent announces the recommendations at a public presentation to the Board of Education in January. The presentation is televised on FCPS Television (channel 18) and is available on the FCPS web site. The Board of Education reviews the Superintendent's recommended budget and seeks comments from the community. The public is able to participate through community engagements, e-mails and through a public hearing on the budget held in February. After receiving public comments and additional input from the Superintendent and FCPS staff, the Board of Education proposes a budget request to the County Executive by the middle of February.

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What opportunities do citizens have to influence budget decisions?

Parents, students, staff, community organizations, and other citizens have many opportunities to influence budget decisions. FCPS conducts community engagement opportunities and periodic surveys to find out what students, parents and employees think about the educational experience. A Board Public Hearing in February provides another opportunity to comment on the recommended budget. County Council hearings in April and May give citizens an opportunity to influence final budget decisions. Citizens do not need to be budget or financial experts to have a viewpoint on what is working and what needs to be changed or improved in the school system. Additional information on the FCPS budget is available at www.fcps.org/budget.

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What information is available from published budget documents?

The Division of Fiscal Services publishes documents to inform the public about the FCPS budget. All are available at www.fcps.org and by request from the Budget Department, 191 South East Street, Frederick, MD, 301-644-5006.

The Superintendent's Recommended Operating Budget Request, produced in January, is intended as a concise summary; it shows proposed changes to the budget and provides explanations of proposed or expanded programs.

The BOE Proposed Operating Budget Request, published in February, details what the Board of Education is requesting for the succeeding budget year, including any changes that have occurred since the issuance of the January proposed request. The County Executive and County Council use this budget document as their starting point for making funding decisions. FCPS makes a summary document available as well.

The Approved Operating Budget, published after the budget is adopted, details what the Board of Education has approved for the succeeding fiscal year. It reflects funding approved by the County Council, reductions or other changes made by the commissioners, and changes in revenue projections that have occurred since publication of the Board of Education’s Budget Request.

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What is surplus fund balance and how does it come about?

Fund balance can come from two sources, under expending the budget and/or receiving more revenues than was estimated. When the Operating Budget is developed, it is representative of an estimate to future obligations. The process to develop the estimates begins almost a year before FCPS begins to operate in that fiscal period. It includes assumptions about student enrollment, salaries and benefits to be paid to employees, energy and supply cost and a number of other items that comprise the Operating Budget. If the estimates are greater than the actual expenditure when closing out the fiscal year, this under-expenditure flows into the surplus. The same is true when the actual revenue received by FCPS is more than the estimate. The entire surplus at year end, June 30, goes to the Operating Budget for the next fiscal year.

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Some of the revenues from Maryland casinos are dedicated to the Education Trust Fund, or ETF. When will FCPS receive additional revenues from the gambling?

Maryland's spending on education won't be affected by an increase in gambling revenues. The gambling profits placed in the ETF do not add to the amount of funding for state schools. It relieves the need for tax dollars to be used for education aid.

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How does a new charter school affect the operating budget?

Charter schools are part of FCPS, and the funds to operate them are included in the operating budget. FCPS does not receive additional funds from the state or county when a new charter school opens. Charter schools are provided funds from the FCPS Operating Budget through a calculation commonly referred to as the per pupil allocation. Often it is perceived there is no or minimal impact of a new charter school on the Operating Budget. As with opening any new school, there are added costs such as staffing and operational expenses. Without additional funding, FCPS must look to reduce other areas of the Operating Budget in order to provide funds to the new charter schools.

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