Intellis Blog

Welcome to our community! We talk about solutions that improve the built environment while making facility management and capital planning more efficient.

Higher Education | K12 Schools | Corporate Real Estate | Government Buildings | Infrastructure

All Posts

What is Capital Budgeting? A Guide for K-12 School Facility Managers and Educational Administrators

In this blog, we discuss the basics of Capital Planning, Budgeting, and Analysis for K12 School Facility Managers and Educational Administrators. 

Preparing and presenting a funding proposal is not easy. That's why we put together this guide to break down the basics, so you will be able to dazzle the school board and other key stakeholders with your financial expertise and secure approval for your school's most important capital improvement projects.

What is Capital Budgeting?

Capital budgeting is the term for the planning process used by organizations for evaluating, appraising, and determining which project expenditures and investments are worth pursuing. For K12 school facility managers, this includes investment in new building construction, critical health and safety improvements, physical asset management, and other long-term ventures.

High-dollar expenditures include the purchase of fixed assets like land, buildings, new equipment, rebuilding or replacing existing equipment, as well as research and development.

The large amounts spent on these types of projects are known as capital expenditures. At its core, Capital Budgeting is a tool for maximizing the future of an organization. Because most K12 schools and districts can only manage a limited number of large projects at any one time, Capital Budgeting is an essential tool for optimizing funds.

Typically a Capital Budgeting plan takes into account:

  • Calculation of each project’s potential accounting profit by period.
  • Cash flow by period.
  • The present value of cash flows after time value for money.
  • The number of years it takes for a project’s cash flow to pay back the initial cash investment.
  • An assessment of risk and other factors.

Learn how FOUNDATION.Plans can make the Capital Budgeting process easier for your K12 School or District.

What is the Goal of Capital Budget Analysis?

In general, the goal of the capital budget analysis is to put numbers into perspective. It provides context to the costs of physical assets against your K12 School or District's overall budgetary limitations and requirements.

This type of analysis will help you decide which projects to fund and which to defer. Based on project rankings that are measured against industry benchmarks as well as each other. If projects pass the benchmark, then they are worth pursuing.

Intelligent software, like FOUNDATION.Plans, will make the Capital Budget decision-making process much easier. For example, our platform includes a system that associates costs with building deficiencies, ranks prioritization of construction projects, and performs in-depth analysis reporting.

These reports are essential in helping K12 facility managers justify to the School District Superintendent and other key financial executives that the projects they want approval for are critical for the long-term health of the K12 School and District.

Watch Intellis CEO Steven Warshaw explain how we transformed capital planning at the nation's largest school district. 

Case Study: The New York Department of Education and the School Construction Authority

For example, we have worked with the New York Department of Education (DoE) and the School Construction Authority (SCA) since 1998 to implement a system that performs comprehensive costing for the annual school construction budget.

Our solution, FOUNDATION.Plans, allows the DoE to generate comprehensive reports based on specific School Construction Authority requirements. Plus our costing calculation software enables report generation based on inspection deficiencies.

Listen to Intellis CEO Steven Warshaw discuss the surprising benefits of implementing a continuous inspection cycle. 

Their Five-Year Capital Plan, which regularly encompasses $14 to $16 billion in project planning, requires that assessments are performed across the entire network of the City’s 1,700 public schools. After receiving inspections, the agency determines which problems to fix, how much each project will cost, and how long they will take to implement. Prior to working with Intellis, this process was arduous, inefficient, and often inaccurate.

Deficiencies found through the inspection process (using facility condition assessment software, FOUNDATION.Conditions, also developed by Intellis) are costed and prioritized using the Deficiency Costing Prioritization system. 

This system allows the DoE and SCA to manage the extraordinary task of prioritizing the deficiencies of 1,700 public schools using built-in algorithms and reporting.

After the implementation of our FOUNDATION Solution, the agency was able to produce a more accurate and transparent 5-Year Capital Plan Amendment, which included an increase of over $1 billion for enhanced educational services and better facilities for the City's more than one million students and the teachers and staff who serve them.

Read the full case study to see how Intellis software helped the NYC Department of Education improve its capital budgeting process.

With the help of FOUNDATION, the DoE and SCA have seen an average increase of $1 billion per year in funding. We are proud to continue working with the DoE and SCA to produce these amendments that optimize and enhance the capital planning process. So that K12 facility managers can provide enhanced educational services and better facilities. FOUNDATION helps the DoE and SCA to ensure secure, safe, and modern learning environments for students and teachers!

Our experts are here for you! Schedule a quick demo with us to learn how we can make the capital planning process a whole lot easier! 

Request Demo