Strategic �School �Finance����

August 2024

Colorado School Finance Project

Agenda

• Introductions (Tracie)
• What do we mean by strategic school finance? (Tracie)
• Mindsets of the Strategic CFO (Tracie)
• Lunch Break – 12:00-12:30
• Strategic Planning & School Finance (Glenn)
• Long-Term Financial Planning (Glenn)
• Annual Budgeting (Glenn)

Follow along in the District Team Workshop Tool!

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What do we mean by Strategic School Finance?

• Historically, the district CFO has often had a compliance, deadline-driven, accounting-focused role
• The typical CFO is focused on "keeping the trains running on time" and controlling costs
• Today, school districts face challenges that demand a more strategic approach
• The strategic CFO is focused on leveraging the district's resources to meet the district's strategic goals

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What do we mean by Strategic School Finance?

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GFOA Smarter School Spending Framework

*Government Finance Officers Association

Things to Think About

• We are going to present you with a lot of different models and information.
• Remember that developing this process is iterative and will take time—you don't need to adopt every practice right away.
• What is your review process?
• Annually this process will vary—just expect that. The process may be similar, but outcomes will be different.
• As we proceed, think about what's happening in your district for next year.
• ESSER dollars ending, capital projects? Other grants ending? Declining enrollment?

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What do we mean by Strategic School Finance?

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ERS: The Strategic CFO

Mindsets of the Strategic CFO

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• How can you become better at predicting revenue and expenditure trends?
• How can you evaluate what your key investments require and make sure they are funded long-term?

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Mindsets of the Strategic CFO

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• How are stakeholders and staff involved in key financial planning and decisions?
• How can you improve input mechanisms and feedback loops?

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Mindsets of the Strategic CFO

• What are some easy ways to evaluate the effectiveness of investments?
• How can you begin to stop doing things that aren't working?
• Who determines what isn’t working?

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District Team Workshop Tool:��Mindsets Reflection (p. 3)

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Group Reflection & Questions

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Lunch Break

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Strategic Planning & School Finance

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Strategic Planning & School Finance

• The district's strategic plan (or strategic goals, or instructional priorities) should guide the financial plan—not the other way around
• Don't get too hung up on having a perfect strategic plan
• The plan has to be dynamic and responsive
• If you don't have a strategic plan: Start by at least identifying 2-4 strategic goals (what) and associated action steps (how) so you know what has to happen to achieve the goal

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Strategic Planning & School Finance

"Strategic plans are necessary to focus district and school efforts on meaningful priorities, achievable goals, and proven/promising initiatives that will benefit the school community. " - Hanover Research

"The district-level responsibilities positive correlated with student achievement include:

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Strategic Planning & School Finance

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Before you begin strategic planning, these foundational statements clarify the district's "foundational beliefs, purpose and aspirations:"

Strategic Planning & School Finance

“It is our mission in Mapleton Public Schools to guarantee all students can achieve their dreams.”

”In partnership with our families and the community, 27J Schools empowers every student today to take control of their future tomorrow.”

”The mission of Bennett School District 29J is to provide a safe environment for a quality education with high expectations for success, ensuring students obtain the necessary skills to achieve their full potential and to think critically as responsible citizens in a complex, diverse, and ever-changing world.”

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Strategic Planning & School Finance

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https://www.ksd.org/about/strategic-plan-goals

Goal

Action

Steps

Strategic Planning & School Finance

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https://www.lausd.org/cms/lib/CA01000043/Centricity/Domain/1371/22-26_Strategic_Plan-1122.pdf

Goal

Action

Steps

Measures

Strategic Planning & School Finance

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https://www.philasd.org/wp-content/uploads/2023/08/SDP_StrategicPlan_23_July28-3.pdf

Resources required for each action step. Plus timeline.

Strategic Planning & School Finance

• You may be spending on things that are not aligned to your strategic plan
• Remember that it is MUCH easier to not start something than it is to stop doing something
• Test every new expenditure against your strategic priorities

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Strategic Planning & School Finance

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Real world story?

District Team Workshop Tool:��Strategic Plan Reflection (p.3)�District Strategic Priorities (p.4)�District Spending Not Aligned (p.4)�

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Group Reflection & Questions

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Long-Term Financial Planning

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Long-Term Financial Planning

• The purpose of the long-term financial plan is to anticipate coming changes to revenue and/or expenses in time to plan for and adjust to those changes while keeping focus on your strategic priorities
• Colorado requires districts to do a five-year budget forecast by statute
• This doesn't need to be complicated right away
• The first step is to identify the basic trends you anticipate (up, down, stable)
• You can work to quantify them over time—you don't have to eat the elephant all at once

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Long-Term Financial Planning

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Long-Term Financial Planning

• Once you have identified the trends and potential bottlenecks, who and how do you engage in thinking through trade-offs or potential decision points?

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Could we repair buses instead of replacing?

What if we don't get the BEST grant? What's plan B for the elementary school?

Do we have to replace both the ELA and math curricula? Could we just do one?

If we have to choose between school counselors and interventionists which should we pick, based on our strategic priorities? Can we grant fund one or the other?

How can we recapture students choicing into other districts?

Long-Term Financial Planning

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https://www.sd35.bc.ca/wp-content/uploads/sites/2/2023/06/Financial-Plan-2023-Final-Version-Digital.pdf 

Long-Term Financial Planning

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https://www.sd35.bc.ca/wp-content/uploads/sites/2/2023/06/Financial-Plan-2023-Final-Version-Digital.pdf

Long-Term Financial Planning

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https://www.sd35.bc.ca/wp-content/uploads/sites/2/2023/06/Financial-Plan-2023-Final-Version-Digital.pdf

Long-Term Financial Planning

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https://www.sd35.bc.ca/wp-content/uploads/sites/2/2023/06/Financial-Plan-2023-Final-Version-Digital.pdf

Long-Term Financial Planning

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https://www.ntschools.org/site/handlers/filedownload.ashx?moduleinstanceid=10463&dataid=15692&FileName=Long%20Range%20Financial%20Plan%20North%20Tonawanda%20City%20School%202022%20vFINAL.pdf

District Team Workshop Tool:��Long-Term Financial Planning Reflection (p.5)�District Long-Term Financial Plan Drivers (p.5)

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Group Reflection & Questions

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Annual Budgeting

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Annual Budgeting

• Today we will discuss the philosophy behind annual budgeting that supports strategic school finance.
• Aligning the budget to strategic priorities, guiding principles
• Engaging stakeholders
• Building the budget
• Tomorrow, in the Putting it into Action session, we will discuss an annual budget timeline and order of operations, including tools to enable you to start this planning
• Legislative process vs. Internal process

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Annual Budgeting

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Strategic Plan

Annual Budget Document

https://www.fresnounified.org/goals/ 

Annual Budgeting

• In addition to spending on your priorities, evaluate effectiveness of your investments to decide which ones to keep / sunset
• A model to evaluate the effectiveness of investments is Plan-Do-Study-Act (PDSA)
• In applying PDSA, ask yourself three questions:
• What are we trying to accomplish?
• How will we know that a change is an improvement?
• What changes can we make that will result in an improvement?

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Annual Budgeting

• Once you know the impact of each investment, use a model like A-ROI to decide which ones to prioritize for continuation

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Annual Budgeting

• How do you create a culture where it's okay to say no to starting or continuing an investment?
• Use objective decision-making criteria
• Strategic priorities
• Rubrics & guidelines
• Train staff in how to have crucial conversations – build this expectation
• Present a unified front rather than putting the CFO out on the sharp end alone

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Annual Budgeting

• Agree on Guiding Principles with your Board of Education

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Annual Budgeting

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Annual Budgeting

Engaging your stakeholders in 3 easy (?) steps:

1. Get everyone on the same page about the numbers: Create clear, easy-to-understand, credible content about the district's financial situation that can be shared synchronously and asynchronously. Frame the conditions and the choices.

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Make this content simple, visual, concise

Avoid jargon and acronyms

Definitely avoid charts with a lot of numbers in them :)

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Strategic Priorities and funding required

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Clear explanation of uses of fund balance

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Tie back to stakeholder input

Clear presentation of priorities and costs

Annual Budgeting

2. Identify Key Stakeholders and differentiate ways to engage. For example:

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Annual Budgeting

3. Develop and execute engagement strategies. If you've done step 1, engagement can be around different investment options—not arguing about the numbers.

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CSFP ESSER Communication Tools, including templates, can be found here.

Annual Budget

• Pop Quiz: Does your budget cycle start with opening the current year's budget document and selecting "Save As...?" You are not alone.

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Annual Budget

•  Restricted: These funds are designated for a specific purpose and are not very flexible. They are often time-bound. Budget them first.
• Examples: Grants for a specific purpose, donations for a specific purpose, funds with a voter-intended purpose (bond revenue, i.e.), ESSER.
• Be wary of using these funds on personnel unless you are going to get them every year.
• One-time purchases are a great choice.

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Annual Budget

•  Somewhat restricted: These funds are designated for a general purpose but are flexible as long as the activities align to the general purpose. You usually get them every year. Budget them second.
• Examples: ESEA (Title) funds, ECEA/IDEA special education funds, ELL/GT/Transportation funds.
• May be okay to use on personnel as you get them every year.
• Watch for / be familiar with requirements and restrictions, including supplement not supplant. It's like the Hotel California—you can never leave.
• Be wary of just doing the same thing year after year with these funds.

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Annual Budget

• Not restricted: These funds are able to be used on a wide variety of activities. You typically get them every year. Budget them last for “everything else.”
• Examples: General fund, some Mill levy overrides, unrestricted donations.
• Be wary of just doing the same thing year after year with these funds.

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Restricted

(tightest fit, budget first)

Somewhat Restricted

(budget second)

Not Restricted

(budget last)

Annual Budgeting: Things to Think About

• Grants: 
• These are one-time money. 
• How do you evaluate them in terms of cost-benefit? You will get a service to the district, but you will also spend time on reporting and compliance. 
• Have a plan up front for how you will sunset these services.
• Re-evaluate your spending annually, even sacred cows.
• ESSER has provided an opportunity to re-evaluate what your priorities are, versus just paying for what you have always paid for.

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Annual Budgeting: Things to Think About

• What about when you have to revise your budget midyear?
• A budget is a work in progress. Revision should be expected and the need to revise is not a mistake.
• Many things change throughout the year (hiring, AV, pupil count, etc.)
• Consider at least a light version of stakeholder engagement and communication when you revise.
• DAC as a minimum
• The impact of the changes you can make mid-year is by definition limited. For example, you have staff contracts that are yearlong.

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District Team Workshop Tool:��Annual Budgeting Reflection (p.6)

Annual Budget Stakeholder Engagement Planning (p.6)�

Group Reflection & Questions

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Questions?

• Tracie Rainey�t.rainey@cosfp.org�303-860-9136

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Stay connected

• https://cosfp.org/
• @COSFP
• Colorado School Finance Project -Facebook

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• Glenn Gustafson�gustafson_g@cde.state.co.us�

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