Use School Business Managers as Budget Allies
Two years ago, a school business manager sauntered into a meeting of assistant superintendents and principals who were intent on improving and expanding their district’s prekindergarten program.
He studied the research I presented to the group, and he asked good questions. “What’s the most solid evidence that shows investing in prekindergarten pays off in the long run?” he wanted to know.
The business manager proved to be an asset and an ally. At one meeting, he punched numbers into a hand-held computer and came up with money for books and classroom learning centers. Over the summer, he reworked the budget to pay for an instructional coach and literacy training for teachers.
The bottom line
The Association of School Business Officials International (ASBO), headquartered in Reston, Va., says a business manager’s most important duty is developing a budget that ensures that all students have opportunities to learn in well-equipped classrooms with high-quality teachers.
The bottom line -- the balance that remains after all revenue is accounted for and all expenses are paid -- shows a school district’s fiscal status. ASBO says business managers should consider an equally important bottom line: a balance sheet that shows how budget decisions improved achievement for all students.
What should business managers know and be able to do? Briefly, these are the professional standards ASBO says you should expect of your district’s fiscal officer:
• Finance and policy expert who manages all facets of the budget; understands legal issues and public policy; and works with legislators and policymakers on fiscally responsible ways to support quality teaching and learning.
• Organizational expert who blends interpersonal relationships with sound fiscal management; conducts needs assessments; and resolves conflicts over competing demands on the budget.
• Facilities expert who promotes safe schools; works with real estate developers, zoning officials, contractors, and community leaders to develop long-range plans for capital projects, including renovating old buildings and constructing new ones; and budgets adequate funds for building maintenance.
• Technical expert who assures budget data is properly analyzed, secured, and used by the business staff, school board, and school officials; and is knowledgeable about instructional technology infrastructures and equipment.
• School-wide expert who manages budgets for ancillary services, including transportation, cafeterias, and health programs.
And you should expect impeccable ethics, Pennsylvania State University’s William Hartman and Jacqueline Stefkovich say.
In ASBO’s Ethics for School Business Officials, Hartman and Stefkovich say business managers must be prudent, fiscally and ethically, when it comes to choosing vendors, awarding contracts, and deciding which budget requests have merit.
They advise business managers to weigh “issues of fairness and equality” before approving proposals that affect student learning. At times, the theory of maximum benefits -- using funds for the greatest good for the greatest number of people -- is appropriate. At other times, the theory of targeted benefits -- allocating more money to high-need groups such as homeless students -- should be applied.
Money and achievement
Does more money ensure higher student achievement?
Charlene Tow at the University of California, Berkeley, studied school funding and student achievement in selected California schools. The notion that more money guarantees higher achievement is a “misconception easily believed by the public,” she discovered.
Consider Arkansas’ school finance fiasco.
In 2004, Arkansas legislators added $700 million to the state’s $2.5 billion education budget. But money intended for instructional coaches, tutors for struggling students, and smaller class sizes in science, math, and reading went amiss. A number of school districts took the money as a windfall, using it to raise salaries and add elective courses in football, basketball, and baseball, apart from regular physical education programs.
In her 2006 study, Tow reported that “not all spending on instruction is of equal worth in promoting high achievement.” She found that increases in categorical aid, targeted to specific student groups, generally yielded positive results. By contrast, increases in spending through general funds did little to improve achievement, and, in some cases, lowered student performance.
Some states and school districts are heeding this lesson by adopting targeted funding.
New York, for example, recently authorized $428 million in state funds for 55 districts with schools “in need of improvement.” The “Contract for Excellence” stipulates that districts must target allotments to student achievement strategies on the state’s approved list: class size reduction; extended school days; improved teacher and principal quality; middle and high school restructuring; and full-day prekindergarten and kindergarten programs.
Under pressure to cap and reduce budgets, some states and school districts are adopting fiscal models to hold the line on expenses and ensure that money is well-spent. The adequacy model establishes the monetary limit schools need to operate each year and does not presume automatic annual increases. The equity model assures revenue is distributed fairly to help all students succeed.
Need help?
Where can business managers, superintendents, and school boards turn for help?
Investing in Learning: School Funding Policies To Foster High Performance, published by the Committee for Economic Development (CED), a Washington D.C.-based research and policy organization of 250 business and education leaders, provides good advice.
CED contends that most schools are “financed, budgeted, and operated using a system that no other organization would adopt, let alone emulate.” Efforts to improve fiscal management are “slow and piecemeal,” the agency says.
Still, CED says, school leaders can adopt fiscal practices that zero in on student achievement:
• Decentralize budget decisions pertaining to instruction and supplies to school buildings, and hold principals accountable for money spent to improve achievement.
• Review the research and cost-effectiveness of proposals, such as reducing class size and hiring teacher aides, before making funding decisions.
• Guarantee funding equity by allotting high-need students, such as economically disadvantaged and English- language learners, a fair share of the overall budget.
• Deny continued funding for programs and practices that show little or no evidence of helping students learn.
The Price We Pay: Economic and Social Consequences of Inadequate Education, by economists Clive Belfield and Henry M. Levin, encourages fiscal officers to consider the long-term outcomes of budgeting decisions.
Start with your district’s dropout rate. Belfield and Levin say that improving education for the 30 percent of students nationwide who drop out -- the rate for Hispanic and African-American boys is much higher -- is “an investment with the potential to yield benefits that far outstrip its costs.”
The fiscal and social costs associated with dropouts extend far into the future. Overall, dropouts’ reduced educational and job opportunities result in low incomes that produce less tax revenue. Many dropouts require high-cost services such as criminal justice, health care, and public assistance.
Factors outside of schools contribute to dropping out -- mobility, poverty, and teen pregnancy, to name a few. Even so, Belfield and Levin say schools can offset these factors by investing in programs proven to reduce the dropout rate. These programs include:
• Perry Preschool Program -- a center-based program that emphasizes small classes, parental involvement, and home visits.
• First Things First -- a plan that organizes schools into small learning communities with high-quality teachers, involved families, and state-of-the-art instruction.
• Chicago Child-Parent Center -- a center-based public preschool program that requires parent involvement and stresses health and nutrition.
• Project STAR -- a program to reduce class size, particularly in the early grades.
• Teacher salaries -- compensation systems designed to increase teacher retention and improve classroom instruction.
A vision for learning
Writing in School Financial Management in 2007, two British educators, Paul Ainsworth, deputy headmaster at Belvoir High School in Leicestershire, and Josephine Smith, of Casterton Business and Enterprise College, say “every decision in a school -- be it about buildings, personnel, or equipment -- should be informed by a vision for learning.”
I’ve seen firsthand what an informed, committed school business manager can do to support good programs and help kids learn.
I hope you’ll see to it that your district’s fiscal officer understands teaching and learning, and always considers kids and classrooms first when figuring the bottom line. n
Susan Black, an ASBJ contributing editor, is an education researcher and writer in Hammondsport, N.Y.
Fiscal policy vs. fiscal management
The Illinois Association of School Boards (IASB) draws a line between fiscal policy, which is the duty of school boards, and fiscal management, which is the duty of business managers and superintendents.
IASB’s guidelines, developed for school boards serving Illinois school districts, are useful for boards in all other states:
• Adopt board policies that govern fiscal management for cash flow reserves, short-term borrowing, debt loads, fund balances, asset protection, and budget reports.
• Require budget officials to explain estimates of projected revenues and expenses; surplus or deficit balances; and alignment with district priorities and goals.
• Conduct monthly oversight of income and expenses. Review current and projected budgets; an updated balance sheet that shows fund balances; and evidence that cash flow is available and bills are paid on time.
• Conduct yearly oversight of cash flow trends; deficits and surpluses; and projections of income and expenditures for five or more years.
• Review data used to plan budgets, including student enrollment; state mandates and financial aid; and local property taxes.
Adapted from James Fritts. Essentials of Illinois School Finance. Illinois Association of School Boards, 2006.