Operations at SAS: The 2021–22 Budget
With the 2021–22 budget adopted by the school board on Monday, this week we explain our priorities in managing the funds entrusted to us by our students' families. Please click here to see the 2021–22 Budget and here to read our Budget FAQs, which explain its background and specifics in more detail.
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 deliver the skills, knowledge, and character development 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 high-quality 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, Eagle Activities and Athletics fees, earnings on invested working capital, and donations.
2021–22 Budget: 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 outstanding 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 2021–22 budget, the cost of salaries and benefits for all employees at SAS represents 81.5% of all expenses (excluding depreciation). Read more about our teachers here.
Besides excellent teachers, SAS offers students high-quality 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. Other expenses include those relating to learning resources, technology, administration, donations expenditures, and innovation. Requests for classroom materials and other program needs are carefully reviewed and prioritized by divisional leaders. Major costs are thoroughly examined by the leadership team as we seek to balance short-term needs with long-term goals.
As we move into implementation of our major campus upgrade plan, which was approved by the board in March 2020, the 2021–22 budget allows for the support of the related capital expenditures. These capitalized expenses are not recorded all at once on the income statement; instead, they are added to the cost basis of our fixed assets on the balance sheet, and subsequently they will appear as expenses on our income statements as they are depreciated over their useful life. The cash to pay the capital expenditures will come primarily from our Facilities Reserves and in part from a planned long-term loan of up to $100 million.
2021–22 Budget: Expenses
Understanding the fee increase
The 2021–22 budget includes an overall fee increase of 2% for returning students. Over the past ten years, we have worked to keep fee increases for our families to less than 4% per year. This is in line with inflation in the education sector in Singapore, which at around 3% per year is higher than in other sectors of the economy. In April 2020, the budgeted 3.5% increase for this year (2020–21) was rolled back to zero in response to the COVID-19 situation. The 2021–22 budget's 2% overall fee increase reflects the school's awareness of the continuing impact of the pandemic on our community and our continuing efforts to control costs.
In general, the faculty compensation offered by comparable international schools worldwide and the facilities costs of maintaining and improving our aging campus are of most relevance to our school fee increases. 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 families. By doing so, we will continue to operate at full enrollment, attract strong new students, and keep fee increases moderate and predictable. Thanks to the foresight and planning of prior boards and administrations, we will be able to maintain this predictable trend with school fees, even as we embark on our campus upgrade project to bring new and exciting facilities to our community.
We recognize that our fees must 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, with costs inclusive of GST.
Singapore School Fee Comparison (SGD, GST Inclusive)
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 the international comparisons below, we exclude GST and similar taxes.
Asian School Fee Comparison (SGD, GST not included)
We hope that this article helps readers understand the school's priorities in determining the 2021–22 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.