District chief financial officers are under a tremendous amount of stress today. Despite a surging economy, districts still struggle financially as they lose students, as state spending fails to keep up with inflation, and as pension and health-care costs climb. Teacher strikes have put stagnant teacher pay back in the headlines, and some states are increasing minimum wages, putting pressure on the bottom line for schools with many lower-paid employees.
Keeping districts afloat and answering the questions lobbed at them by school boards, state education departments, and the feds has taken up vast amounts of CFOs’ time. But a new white paper from Education Resource Strategies and the Broad Center suggests some ways CFOs can think and act more strategically to improve academic outcomes.
While ERS, a school finance consultant group, was looking to put on paper many of the lessons it’s learned from working with more than 40 school districts across the nation over the last decade, the Broad Center, a training center for district administrators, sought to put together a guide for new CFOs entering the field.
Citing conclusive research that money can improve academic outcomes, Jonathan Travers, a partner with Education Resource Strategies, said in an interview that it’s incumbent on CFOs to make sure the district’s human and capital resources are being spent in a way that has the most impact on the classroom.
Here’s a brief description of some suggestions the organizations have for CFOs.
Look Forward: CFOs are often tasked with charting out historical spending patterns so that school board members and superintendents can decide whether to continue to invest in a program. But the two organizations suggest CFOs should also anticipate costs coming down the pipeline. For new initiatives, the paper says, CFOs can help district and school leaders think of all the costs associated with a new academic program to make sure it has the most impact.
Travers said CFOs can help the public understand where the district has discretionary spending and help facilitate discussions about how best to invest that money.
Reach Outward: While CFOs often sit on superintendents’ cabinets and present frequently to school boards, the authors say they also are perfectly situated to build trust in communities about how taxpayers’ dollars are spent. The authors encourage CFOs to take their presentations on the road, talking with parent and advocacy groups about how the district receives funds and how it decides to spend the money.
“The CFO who is trusted by the board and community can help the district focus community engagement around academic strategy and how to best serve students, instead of on basic financial management issues,” the authors wrote.
Be Strategic About Budget Cuts...and New Investments: When it’s time to slash the budget, CFOs sometimes tell every department director to cut a certain percentage from the budget, leaving it up to other administrators to figure out which programs to shutter and which staff members to lay off. But this sort of “across-the-board” cutting can undercut districts’ academic goals. The authors encourage CFOs to be more strategic in their spending and cost-cutting by connecting spending initiatives with district goals. They should help community members and other administrators see the big picture and frame budget cuts as tradeoffs to allow for district leadership to grapple with the decisions they make, the authors write.
As states start reporting school-by-school spending data, required under the Every Student Succeeds Act, Travers said CFOs have an opportunity to talk more broadly about why the district spends how it spends.
“CFO’s chief responsibility is to explain, not defend,” Travers said. “I think the most strategic CFOs are going to help districts understand why school spending numbers are what they are.”
Read the entire report here.