School Finance - Final Reflections on Lessons Learned

After completing this course, I feel much more competent in the area of finance. The self-assessments, lectures, interviews, and readings have helped me tremendously. The assignments (in particular the wiki group activities) were very helpful. Reading the postings from the other groups on blogs and wikis gave me great insights. It was almost like having the opportunity to sit down and interview everyone’s business manager. I believe all of these activities helped me to grasp the basic concepts of school finance.

To begin, the self-assessment was very revealing. My Competency 8 section of the Self-Assessment changed greatly from week one to week five. There is only one area that I believe still needs improvement and that is in the area of working with the school board. In five other areas, I had considered myself needing improvement, but now feel that I am competent. These areas were applying procedures for effective budget planning; facilitating and evaluating effective account auditing and monitoring; establishing district procedures for purchasing, record keeping, and reporting; managing one’s own time and the time of others to enhance district operations; and using revenue forecasting to address budgetary needs. In two areas that I had previously considered myself only competent, I would now mark as strengths. These areas were acquiring, allocating, and managing resources; and applying legal concepts, regulations, and codes.

Over the last five weeks, the lectures, interviews, readings, and other resources have deepened my understanding of school finance. I always enjoyed the lectures, as they set the tone for the week. It is always helpful to hear experienced administrators talk about educational issues. Likewise, the interviews provided an opportunity to sit down with the superintendent and business manager and learn from them about our district, as well as general financial information. The readings were also strong for this course. The websites referenced contained more than enough material to complete the assignments and broaden our knowledge. Finally, the resource section was extremely helpful in this course. The sample data used for our analyses really made some of the more difficult concepts clear.

The assignments were very relevant to the course and helped me to understand many of the practical applications of the material presented. I learned a lot about my own district through the use of our district budget to complete assignments. Using sample data from different districts was also interesting to me. Looking at the data and comparing districts of different sizes and compositions was definitely a learning experience. Using the wikis and working in groups allowed me to compare my observations with others and see things I might otherwise have overlooked. It was also encouraging to see that others were agreeing with my observations and extending my analyses.

Finally, the blogs and reflections of my colleagues were always interesting and informative. The more that I read, the more that I feel I know my classmates in the program. Despite our different backgrounds and work experiences, we are sharing our observations and learning from one another. I was really concerned that the online courses would be difficult and hard to follow, but the discussion boards have allowed us to share and work together much more than I would have imagined. Overall, I am pleased with the knowledge and skills I have learned in this course and feel much better about my ability to work with school district budgets.

Code of Ethics for School Leaders

Standard 1.2.  The educator shall not knowingly misappropriate, divert, or use monies, personnel, property, or equipment committed to his or her charge for personal gain or advantage.  An administrator in a district where a friend worked used school funds to purchase several items which he took to his home for his own personal use.  The items included a DVD player and a new flat screen TV which he reported that he was taking home for “evaluation” purposes.  None of the items ever made it back to the campus.  Over the years, this administrator used thousands of dollars that could have been used to benefit students, but instead benefited himself only.

Standard 1.3.  The educator shall not submit fraudulent requests for reimbursement, expenses, or pay.  A campus principal turned in the paperwork for reimbursement for hotel and mileage for an out-of-town conference.  At the last minute, he accepted a ride with a colleague from a nearby district and did not take his vehicle on the trip.  At the conference, he stayed with the friend and split the hotel costs paying only half of his original request.  When he returned, he accepted the full reimbursement check and bragged about it later calling it one of the “perks” of his job.  In the same school year, the campus teacher travel budget had been cut and several teachers either missed conferences or paid their own expenses to attend.

Standard 1.11.  The educator shall not intentionally or knowingly misrepresent his or her employment history, criminal history, and/or disciplinary record when applying for subsequent employment.  In preparing his resume’ for a curriculum director position, a school administrator added several entries to indicate participation in curriculum writing and revising sessions that never took place.  He also added an entry claiming that he had been the department head during one of the years in question.  During the interview process, he answered several questions about the entries and greatly exaggerated his curriculum experiences.  When he was hired, he insisted on being paid extra due to his extensive curriculum background.

Standard 2.1.  The educator shall not reveal confidential health or personnel information concerning colleagues unless disclosure serves lawful professional purposes or is required by law.  An administrator shared with the interview committee the fact that one of the candidates for a position had been treated for years for a mental disorder.  The information had been shared in a Sunday School class at the church they both attended.  The administrator did not believe that the condition would interfere with the candidate’s ability to perform his duties, but rather hoped that the information would sway the committee into recommending another candidate he preferred.  The other candidate was less qualified, but had worked with the administrator in a previous district.  This candidate accepted the position at a higher salary than the first candidate had been offered.

Standard 2.6.  The educator shall not use coercive means or promise of special treatment in order to influence professional decisions or colleagues.  A principal promised a teacher that she would be the department head and receive the stipend that went with the position, if she “worked with him” and helped get rid of another teacher who served as the current department head.  The principal had the teacher document conversations that he used to convince the other teacher to resign rather than be non-renewed.

Consequences/Preventative Actions

In the first example, Standard 1.2, the short range consequences were a shortage of equipment available to students and a loss of confidence in leadership.  Teachers had to check out all audiovisual equipment through the library and in many cases, equipment was not available and teachers had to adjust lessons accordingly.  Staff members also heard rumors almost immediately and began to lose respect for the administrator.  The long range consequences were that the campus continued to suffer from a lack of equipment and the administrator was reassigned after the issue became public.  I think such ethical violations could be prevented if those in leadership positions maintain an awareness of ethical practices and model those standards at all times.  SBEC Competency 1 says that the superintendent should be an advocate for all children.  If this were the case, the superintendent would do everything he could to ensure that school funds are being used to benefit the students, not the staff.  Also, Competency 1 says the superintendent should monitor and address ethical issues.  All staff should be hearing a message from the top that ethical behavior is a priority and the superintendent should take seriously his responsibility to monitor his staff.

In the second example, Standard 1.3, there were also short and long term consequences.  In the short term, teachers and other staff suffered due to a shortage of funds for professional development.  While the administrator was taking school funds as personal gain, he was also robbing himself of other opportunities by using his allotted funds unwisely.  In the long term, the administrator’s actions were eventually discovered and he was forced resign and repay the funds.  Preventing such practices could be accomplished by following stricter policies and requiring receipts to be turned in with any reimbursement forms.  The superintendent should also ensure that all staff members are instructed on such policies.

The third example, Standard 2.1, also had short and long term consequences.  In the short term, the campus morale suffered immediately.  Most of the campus staff members were aware of the situation and took sides with one of the two teachers involved.  Throughout a very long school year, student achievement declined as teachers fought and the campus became very divided.  At the end of the year, the campus lost several very strong teachers who had sided with the original department head.  Those who stayed, continued to have difficulty working with the principal and the new department head.  In the long term, the principal stayed only one more year and left due to declining test scores.  I think the Competency 1 indicator that refers to interacting with staff in a professional and ethical manner applies here.  If the principal had not tried to manipulate the situation to his liking, he might have been able to accomplish more at the campus.  Again, the superintendent should set high standards and model appropriate behavior to establish an atmosphere where all administrators know that high ethical standards are expected at all times.

Interview with Business Manager on Financial Audits

After interviewing the business manager, I believe I have a much clearer understanding of the purposes and the process of completing the Annual External Audit.  Having an outside auditor examine the district’s financial operations is a very important yearly necessity.  An outside person can often see things that may be overlooked by district personnel who are too closely involved in the day to day finances of the district.  The process is fairly straightforward.  The district selects an external auditor following a request for proposals (bids) by the district.  The school board evaluates the proposals and selects a firm to complete the audit.  (Usually, we receive proposals from 2-3 firms.)  Once selected, the auditor will notify the district to schedule an onsite visit and send a list of any documents that he may need in advance or that the district must have available when he arrives.  The onsite visit takes 1-2 days in our district and the auditor will occasionally call with follow-up questions or requests for additional materials.  The conclusions of the auditor will hopefully be an unqualified opinion which indicates that the district’s operations and procedures are in order.  Regardless of the financial situation in the district, this is an important conclusion of the audit.  Finally, the auditor prepares a written report to be presented to the school board.  The audit report is presented in a public meeting before the board, published in the local newspaper, and sent to TEA.

Reflection – I was present at the board meeting at which the External Audit Report was presented in our district.  I found the material to be very comprehensive and the auditor very thorough.  The presentation was interesting and our district received an unqualified opinion.  The interview with the business manager helped me to truly understand the implications of the report and I was better able to see how all of the details in the report were relevant.  Overall, I found the activity very helpful.

Understanding Personnel Salaries in District Budgets

Based on the LISD 2010-2011 Budget, salaries make up approximately 72% of the total budget.  Payroll, including salaries and benefits, accounts for $1,502,416 of the budget.  The total proposed budget is $1,998,897.  Looking at other districts in our area, I believe we are fairly comparable.  In most of these districts, the percentage of the total budget that is devoted to salaries is roughly 70-80%.  I think that this makes sense, because I do believe that people are our most important resource.  Without the right people, programs and supplies will not produce learning.

Although most school personnel would welcome a 5% salary increase, there would be both positive and negative impacts from such an action.  On the positive side, an increase in salary would raise teacher morale and give them a much needed feeling of support from the district.  The district would be able to attract quality teachers and retain the teachers already hired.  A salary increase would likely create more loyalty and goodwill within the district.  On the other hand, a 5% salary increase could result in budget cuts in other areas.  Teachers or instructional aides could be released to allow for the higher salaries for remaining staff.  Supplies and other resources might be cut to increase the funds needed to increase salaries.  Cuts in these areas could hurt district morale.  In considering an increase in salaries, the district must consider both positive and negative consequences that may result.

Reflection – I have always heard that salaries make up the largest portion of the budget and it was interesting to look at the actual numbers and percentages for our district.  I think that this is reasonable considering that people are the most important resource in a district, in my opinion.  The other part of the assignment was also very interesting.  I think most people only consider the positive aspects of increasing salaries, but in our current statewide budget crisis, the negatives must be looked at carefully, as well.  Increasing salaries may provide benefit for some, but usually not for all.

Reviewing and Analyzing the District's Maintenance and Operations Fund

Based on the district’s 2010-2011 Budget and a brief interview with our business manager, I have learned a great deal about our district’s finances. As a campus principal, I have some experience working with budgets, but mostly from the perspective of expenditures. Working with the business manager, I gained some valuable experience in the area of revenues and how the revenues relate to the expenditures. Mainly, we focused on the revenue that goes into the Maintenance and Operations Fund.


In terms of revenue, the majority of our (M&O) funds come from local revenue (primarily the local property taxes), with the rest coming from state and federal revenues. 72% of these funds come from local revenue, 23% from state revenue, and 5% from federal revenue. State revenue includes funding for Regular and Special Education Programs, Career and Technology, Gifted and Talented, Compensatory Education, and Transportation. Most of the revenue from local, state, and federal sources goes directly into the General Fund to be appropriated for district expenditures.


Some of these funds go directly into the programs which generated the funds. Allotments for special education, CATE, GT, etc. are appropriated for those programs. The vast majority of the funds are not specifically dedicated to particular programs or activities and may be used in any area (M&O). Of these funds roughly 75% are budgeted for payroll. 49% of the budget is appropriated for Instruction. Remaining funds are distributed into the other “function” categories including media services, curriculum, staff development, administration, guidance services, health services, transportation, and co-curricular activities. Based on this information, I would say that most of the funds do show a direct relationship between source and allocation.

Reflection
I found this analysis and interview to be very interesting.  There are still many areas of school finance that are new to me.  I am learning a great deal and beginning to understand some of the complexities of the budget process.  I can already see that having a solid business manager who understands the process is essential to all stages of the budget process.