Learn how to speak education finance.
Download our Education Finance Glossary »

Financial Transparency—The Key to ESSA’s Implementation

Stay on top of your district's spending by evaluating where your district stands in these five critical areas.

In light of ESSA’s impending implementation, superintendents need to have a finger on the pulse of the goings-on of their school district more than ever. This wave of increased transparency can bring unprecedented levels of scrutiny to even the most basic processes within a school district, so it’s crucial that superintendents and district administrators aren’t caught unawares. School boards and community stakeholders may want answers to ensure that all district spending —beyond textbooks and field trips— is transparent, strategic, and engenders resource equity for students.

Here are five areas to consider:

Utilities

How much money did the district spend annually on utilities—electricity, natural gas, sewer, and water?

Under ESSA, districts will be tasked with ensuring that all school funds are being spent in an equitable and meaningful manner. Reducing energy bills can increase the amount of funds available for instruction and maximize student opportunities.

Looking to reduce your utility spending? You have many options that are independent of each other, but can work together to collectively reduce cost. First, consider engaging an energy management company that focuses on changing human behavior; cutting off lights when classrooms are empty, efficiently managing temperatures when buildings are unoccupied, using technology and employing trained energy specialists to monitor energy use.

Dallas based Cenergistic leads the industry using this approach with their ‘no risk’ proposition. If they don’t save you money from reducing energy usage, you don’t pay them anything, and there is no retrofitting cost. Additionally, purchasing energy efficient equipment that employs sleep-mode settings can also reduce usage. Replacing older model equipment with a newer energy efficient version can greatly reduce overall energy cost in the short and long term.

Replace lights with LED fixtures, invest in sink controllers that automatically shut off after a certain time duration as well as low-flow faucets to conserve water use. While there are many new companies to choose from, traditional companies such as Trane, Siemens, and Johnson Controls remain popular choices for districts going the ‘equipment retrofit’ route. Several of these companies want you to finance the retrofitting or sign a 30-year contract that is repaid with energy savings.

Finally, if you are in a state that allows you to purchase energy competitively, consider using an energy broker to negotiate a reduced rate for your district.

Fuel and Transportation

How much money did the district spend on fuel to transport students to and from home to school this past year?

Unless your school district fully outsources your transportation needs, many superintendents will need to keep a tight watch on fuel and transportation costs as these can easily skyrocket and disrupt even the most well-planned budgets. The more a district spends on transportation, the less it has to spend on other programs. A thorough review of fuel and transportation costs should include insurance and liability costs, bus parts and supplies, fuel, vehicle maintenance plans, driver training, and transportation-related expenses.

Additionally, make sure you have a thorough understanding of your cost-per-route mile, as a less than average cost-per-mile may indicate a well-run program in a district.

Need to reduce your transportation budget without reducing services? Consider school bus advertising. Entering into a contract with local businesses to place appropriate advertisement on district school buses could generate needed income. Additionally, reach out to neighboring schools outside your school district to see if there is interest in your district providing bus services. This service could bring in revenue that helps your school district reduce cost and increase resources for students.

Finally, if you are not already doing so, consider running a multi-tiered bus routing system. By staggering school start times, you can use the same bus and driver to pick-up and deliver students to numerous schools.

Insurance

How much money did the district spend on liability, theft, flood, and casualty insurance this past year?

While the cost of liability insurance varies widely, many district officials are noticing escalating premiums from longtime vendors, while other vendors are requiring policyholders to cover more of the cost, to the tune of thousands of dollars. Since many districts are required by law to hold liability insurance policies, it is important to thoroughly review how much your district has spent in these areas to better prepare you for questions from your board or community. Recent events have shown the importance of having such insurances in place, however districts should still ensure that these costs don’t take too much from other programs designed to benefit students.

Wondering how to reduce insurance expenses without sacrificing coverage? Consider a liability insurance pool. Collaborating with other school districts to purchase insurance can lower insurance cost by spreading the risk. Additionally, ensure that your district can show that you pose limited risk by explicitly defining a school sexual harassment policy or hiring additional security guards to protect students. Make sure that your flood insurance covers schools that are in the municipalities’ flood plain and that the deductions are set high enough that you can receive significant savings, but not so high that your fund balance could not cover a major disaster.

Human Resources

How much money did the district spend on recruiting, onboarding, and training teachers new to the district this past year?

In light of the recent turmoil that many districts are undergoing with teacher strikes and walkouts, it’s no surprise that the cost of recruiting and keeping qualified teachers will be a question top of mind with your board and community stakeholders. Take the time to review how much you have spent historically in this area and compare it with your recent spending. Be ready to account for any significant changes with transparent data and evidence to prove that adequate spending is budgeted to attract and retain the most qualified staff to benefit students.

Take a close look at where you are recruiting and which recruiting trips are resulting in good hires that stay with you. In a district I previously worked, recruiters were visiting the University of Hawaii. As it turns out, we had not hired a teacher from that university during the five years the recruiters visited the school. Needless to say, that wasn’t the best use of our resources.

Per-Pupil Spending

How much money did the district spend per student on:

  • Magnet versus neighborhood schools?
  • Special education versus gifted students?
  • The top 1/3 of the highest performing versus the bottom 1/3 of the lowest performing schools?

ESSA will make comparing a school district with its peers easier than ever as all public districts will be required to report identical information in an identical format for public consumption. Parents especially will be interested in how much public schools are spending per student compared to magnet or charter schools in the area to determine whether they should enroll their children in one of these latter options. Make sure you can clearly articulate how much you are spending per student in each of the areas outlined above with ample justification to support your decision.

Allovue can quickly help you answer all of these questions and more.

Transparency is the key to financial support. When everyone can see how you are spending your resources, two things happen; (1) You will be more accountable for your district’s and school’s expenditures, and (2) when you need additional resources, your community will be more likely to support your request.

It takes a strong leader to demand financial transparency in a school district. Often, it’s the district’s financial officer that poses the biggest roadblock and it takes a committed superintendent to remove it. Ego, control, or the desire to hide money for emergencies, etc. should not be allowed to block the countless positive benefits to financial transparency.


About Dr. Terry Grier

Image of Terry Grier

In March 2016, after seven years, Dr. 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 Dr. Grier’s leadership, HISD became the first district in America to win the prestigious Broad Award a second time (initial award in 2002).