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Top 10 Things Superintendents Need to Know about Finances

Spending drives everything in a school district, including the ability to hire highly-qualified teachers, offer professional development, ensure that students are supported with wraparound services, evaluate the curriculum, assure the safety and cleanliness of school facilities, and provide extracurricular offerings, technology infrastructure, food, field trips, library resources, college prep, and more.

And yet, despite its importance, many superintendents don’t have access to the financial data they need to make critical budgetary decisions.

In our work with districts across the country, we see a convergence of several trends: the rising costs of pensions and debt, reduced state budgets, a focus on funding equity, and calls for increased financial transparency. School boards are asking tough questions about whether their districts’ spending is truly aligned with their top priorities for student achievement.

How confident would you feel if you had to answer those questions today?

We sat down with former Superintendent of Houston ISD, Dr. Terry Grier, to ask him what questions superintendents should be asking (and answering) about their district budgets and spending. During Dr. Grier’s 32-year tenure as a superintendent, these questions were essential for ensuring equity and student achievement:

1. Is our district allocating resources equitably across schools, according to student and school needs? All students deserve equitable resources and an equal opportunity for a great education. Under ESSA, districts will be tasked with proving they are equitably distributing dollars before additional federal dollars can supplement state and local funds. Is your district prepared for the ESSA changes?

2. Is our chart of accounts telling us what we need to know about resource allocation? Your chart of accounts holds a LOT of information - but is it telling you what you need to know about equity across schools and program effectiveness? At a minimum, your chart of accounts should allow reporting and spending by program and location.

3. Do our leadership development programs include financial management? Principals and department leaders often manage huge budgets. But unless they majored in accounting in college, they may not feel ready for the responsibility of managing millions of dollars. Assess their professional development needs for financial management and budgeting strategy as well as instructional leadership.

4. Do your school leaders have easy access to their financial transactions and account status? Access and control of fiscal decisions should match the level of financial responsibility that is placed on school leaders. Having readily available accounts information (budget, expenditures, encumbrances, and available) is vital for school-level and department-level decision making.

5. Are your schools’ budgets aligned to address their most glaring academic problems? In education finance, student success is the bottom line. Your resources should be aligned with your goals for student achievement. Are you able to track your resource alignment across schools? Can you evaluate which resources are most effective for improving student performance?

6. What percentage of your budget was actually spent on strategies to address the goals and priorities established by the school board? You gathered the outcomes data, you collected stakeholder input, you sat through a lot of long school board meetings… now what? Your strategic plan shouldn’t just be a document on your website. Make sure your budget managers understand how their resources are tied directly to the district’s goals and actions.

image of accounts with goals tied to spending

Tie your dollars directly to district goals and monitor your progress

7. How much unspent grant money did your district return last year, and why? Every year, districts leave millions of unspent grant dollars on the table for a variety of (avoidable!) reasons: the budget manager didn’t know money was available, accounts weren’t being monitored, or budget managers didn’t understand how to strategically use funds to co-fund a resource. Grant money is typically allocated for the most high-need students, so don’t let your grant dollars go to waste!

image of available grant funds in Balance

Shown above: Available grant funds you didn’t even know you had!

8. Are we spending money on software, curriculum, training, or other materials that were well-researched and/or proven to get results? ESSA is interested in the effectiveness of every dollar. The law includes provisions to implement programs with “strong,” “moderate,” or “promising” evidence that they produce a positive outcome for students, as determined by existing scholarly research. It will be more important than ever for you to understand which programs are being implemented at each location and to continuously monitor those results.

9. Do we have an equitable distribution of staff positions across schools and departments? If not, how can we reallocate positions or redirect funding? Personnel salaries and benefits make up nearly 90 percent of district budgets ($540 billion in total), so it’s crucial to monitor the equity of these resources. If your district allocates personnel based on average salaries, inequities may be hidden in your budget.

10. Are your district’s programs and policies cost-effective? District leaders should know if the programs they implement actually create opportunities for student learning. Likewise, they must know when a program should be discontinued due to a lack of an effect on learning. In the end, given a balance of program cost and program effect, a leader will have the right information to make these tough decisions.

About Terry Grier

Image of Terry Grier In March 2016, after seven years, Terry Grier retired as Superintendent of the Houston Independent School District and assumed the role of Executive Director of Pure Edge, Inc. During his time in Houston, the district received two $12 million federal magnet grants and a $30 million Race to the Top Grant. Scholarship dollars offered to seniors increased from $52 to $313 million. In November 2012, Houston citizens approved a $1.9 billion construction bond (largest in history of Texas) by a 69 percent approval rate. HISD’s PowerUp Digital Conversion program is widely considered to be the most successful in America. In 2013, under Grier’s leadership, HISD became the first district in America to win the prestigious Broad Award a second time (initial award in 2002).

October 13, 2016