School Finance 609: The 2017-18 Budget
With the 2017-18 budget adopted following last Monday's parent presentation, this week we give you the broader budget picture by explaining our priorities in managing the funds entrusted to us by our students' families. For background and specifics of the budget, as well as definitions of budget-related terms, please read our budget FAQs.
We have several priorities in deciding how to allocate the school's money. On the one hand, we strive to provide an excellent education that develops in every student the skills, knowledge, and character needed to thrive in the 21st century. On the other hand, we must ensure the long-term financial health of the school while keeping our fees competitive with other premium international schools. In a nutshell, we must achieve our mission— providing each student an exemplary American educational experience with an international perspective—without letting our expenses exceed our revenue.
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. As our endowment fund has reached its intermediate goal of $50 million, we are for the first time able to budget $1 million from its earnings toward 2017-18 revenues.
2017-18 Budget: Revenues
Turning to expenses, our largest expense category is always faculty and staff salaries and benefits. To provide an excellent education we must hire excellent teachers, and this requires competitive salaries and benefits packages. We benchmark our compensation packages against those of similar schools in the region and worldwide. In the 2017-18 budget, as in last year's budget, the cost of salaries and benefits for all employees at SAS represents 69 percent 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 10-year asset management plan helps us manage these expenses by controlling facilities maintenance and construction costs, keeping track of renewal cycles, and avoiding major fluctuations in project workload or financing.
Other expense categories include classroom and technology resources; administration, communications, and admissions needs; allocations to planned reserves, which buttress us against emergencies; and research and development costs. Requests for classroom materials and other program needs are carefully scrutinized 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.
2017-18 Budget: Expenses
The bottom line, for parents and payers
The 2017-18 budget includes an overall fee increase of 3.9 percent for returning students, which is slightly higher than recent years' increases of 3.5 percent. This is because we are now in the implementation stage of our research and development process. Students will benefit from recommended program initiatives including a Chinese immersion strand in the elementary school, an expanded high school counseling staff, additional teachers to meet specific needs, and the gradual reduction of EAA/CSA fees for participating students. Our new facilities master plan also calls for significant spending on facilities improvements over the next five years.
We have written previously about changes in student demographics and in Singapore's international school scene. We have revised our fees to address these changes and make SAS more attractive for all applicants, and especially for American families. In order to balance the financial burdens placed on old and new SAS families, we have also created two fee rates for the facility fee going forward.
We recognize that our fees should remain competitive with those of other international schools here. Therefore, each year we determine our average cost of attendance and benchmark this against other schools' fees, as seen below. As you look at the charts, bear in mind that most of Singapore's international schools charge separately for field trips and overnight trips, even in the lower grades; at SAS, except for Interim Semester fees, such fees are included in tuition.
Singapore international school fees for returning students (GST included)
We also want to be competitive with respected international schools outside of Singapore, so we benchmark our fees against those of comparable schools in Asia and worldwide. In these comparisons, we exclude the various countries' taxes.
Asian international school fees (SGD), 2016-17
Worldwide international school fees (SGD), 2016-17
We hope you have found this explanation of the wider context of the 2017-18 Budget helpful. If you have questions or comments about the new budget, or ideas for future finance articles, please let us know at firstname.lastname@example.org. We look forward to hearing from you.