Finance at SAS 807: The 2019–20 Budget
With the 2019–20 budget adopted following Monday's community budget presentation, this week we present the broader budget picture by explaining our priorities in managing the funds entrusted to us by our students' families. To see the budget and read more about its background and specifics, please go to the "Budget Information" section of the School Board page on the MySAS portal.
Our goal when deciding how to allocate the school's money is straightforward: to achieve our mission, an exemplary American educational experience with an international perspective, without letting our expenses exceed our revenue. This means that, on the one hand, our educational programs must develop the skills, knowledge, and character necessary for students to thrive in the twenty-first century, while on the other hand, we must ensure the financial health of the school and keep our fees competitive with those of other premium international schools.
Revenues and expenses
Like any budget, the SAS budget can be divided into revenues and expenses. Our revenues come primarily from student fees: the tuition, facility, and re-enrollment or application fees, and, for new students, the registration fee. Other income includes summer semester fees, CSA/EAA fees, earnings on invested working capital, and donations. For the third year, we are able to budget $1 million from earnings on our endowment toward 2019–20 revenues.
Turning to expenses, faculty and staff salaries and benefits (S&B) always make up the largest category. To provide an excellent education, we must hire excellent teachers, and this requires competitive S&B packages. We benchmark our compensation packages against those of similar schools in the region and worldwide. In the 2019–20 budget, the cost of salaries and benefits for all employees at SAS represents 69% of all expenses. Read more about our teachers here.
Besides excellent teachers, SAS offers students excellent programs, facilities, and resources, and we plan carefully to meet the school's evolving needs in these areas. The second largest single expense category is campus operations, which includes facilities costs (buildings and grounds) and day-to-day operating costs. Our multi-year asset management plan helps us manage these expenses by controlling maintenance and construction costs, setting renewal cycles, and avoiding major fluctuations in project workload or financing.
Other expenses include classroom and technology resources; administration, communications, and admissions needs; and innovation costs. Requests for classroom materials and other program needs are carefully reviewed and prioritized by divisional administrators. Major costs such as large-scale program upgrades or school-wide purchases are thoroughly examined at the cabinet level as we seek to balance short-term needs with long-term goals.
Understanding the fee increase
The 2019–20 budget includes an overall fee increase of 3.5% for returning students, which is lower than the fee increases of the last two years. Parents sometimes ask why fees must rise by more than Singapore's inflation rate. The answer is that inflation only affects our costs to a limited extent. Of more relevance are the S&B packages offered by comparable international schools worldwide and the facilities costs of maintaining and improving our aging campus. In Singapore's competitive international-school setting, we must hire excellent teachers and offer excellent facilities to maintain our position as one of the most desirable schools for expatriate families. By doing so, we will continue to operate at full enrollment, attract strong new students, and keep fee increases moderate and predictable.
We recognize that our fees should remain competitive with those of other international schools. Each year, we determine our average cost of attendance and benchmark this against comparable schools' fees, as seen below. Bear in mind that most of Singapore's international schools bill parents separately for field trips and overnight trips in all grades, while SAS includes such charges in the tuition fee, except for Interim Semester costs.
We also want our fees to be competitive with respected international schools outside of Singapore, so we benchmark them against those of comparable schools in Asia and worldwide. In these comparisons, we exclude GST and similar taxes.
We hope that this article helps readers understand the school's priorities in determining the 2019–20 budget. Questions or comments about the new budget, or ideas for future finance articles, are very welcome at firstname.lastname@example.org. We look forward to hearing from you.