6 Strategies for Effective Financial Management in K-12 Schools

effective financial management in schools

Managing school district finances effectively requires a complicated series of day-to-day, monthly, and annual tasks administered by finance officers at the district level. From creating and balancing budgets, to managing contracts, paying vendors, and maintaining assets, all functions are geared toward aligning desired student outcomes with available resources.

In many states, schools are forced to meet rising academic standards with inadequate or declining funding. Michigan schools, for example, have seen total revenues decline by 30% since 2002. Maintaining a well-performing K-12 school system that meets 21st century needs with limited resources requires effective financial management.

Challenging Times Necessitate a Systematic Approach

School finances are closely tied to both public policy and student achievement. School funding is a concern in the current climate of economic uncertainty. With per-pupil allocations and revenue-raising tax system fluctuations, it is necessary to keep pace with decisions affecting school funding. Declines in enrollment and revenue alongside aging facilities strain school districts to operate more efficiently. During these challenging economic times, effective school finance officers can leverage the following strategies to support a systematic approach.

Strategy #1: Monitor data, public policy, and legislation continuously

These include student demographic and achievement data, enrollment trends, financial reviews, state funding formulas, etc. Since district finances are closely tied to enrollment and per-pupil funding allowances, recognizing and analyzing trends allows school finance officers to make data-driven decisions, proactively create projections, and anticipate impending challenges.

Strategy #2: Create a strategic three to five year plan

By focusing on student learning outcomes, stakeholders create a three to five year strategic plan. This long-term plan is then broken down into implementation plans with actions steps that guide the budgeting process. In partnership with instructional staff, finance leaders ensure that annual budgets are carefully aligned to district goals.

Strategy #3: Minimize unnecessary administrative costs

Consider hidden costs, locate inefficiencies, and rethink outdated processes. By keeping administrative costs under control, districts can ensure that funds are allocated where they should be: in the classroom. Investigate the indirect and soft costs related to district operations.

Strategy #4: Manage district assets appropriately

Anticipate capital expenditures and minimize maintenance costs. By working closely with facilities administrators and staff, school finance officers can plan appropriately and in advance.

Strategy #5: Operate with transparency and accountability

Establish and maintain public trust. Tailoring communications to various groups allows school finance officers to collaborate effectively with school board members, administrators, academic leaders, and community members. Engaging these stakeholders in long-term planning increases buy-in and confidence, building support for the strategic goals.

Strategy #6: Review cost containment strategies

Take a look at cost containment relative to consolidation and contracting school support services. Even as school districts strive to improve student outcomes with rigorous standards and new technologies, it is possible to improve business practices by refining operational processes. Academic return on investment should always be a top priority.    

Examining Support Services

School districts perform a wide variety of services that may include meals, transportation, and communications on top of their primary mission of instruction. In addition, there are numerous administrative duties involved in the provision of these services. To remain viable and competitive in the current market, school districts must be fiscally responsible. Contracting services where appropriate can improve quality, reduce costs, or both.

School finances support and enable the district’s educational initiatives, as instructional goals drive the budget. The strategic use of outside contractors and staffing agencies can add value to a district’s spending. Personnel costs, a dominant feature of school district budgets, are largely controlled at the local level. The staffing of substitute teaching personnel is a budgetary line item that warrants consideration.

Accessing Innovative and Cost-saving Solutions

Effective financial management means thinking outside the box and looking outside the district. Accessing specialized and innovative solutions can impact the bottom line. A staffing agency that increases fill-rate for substitute teachers promises an academic return on investment. With substitute teachers filling in for inevitable teacher absences, this budget line supports the strategic plan and helps to maintain instructional momentum. Quality substitutes trained to support the district’s instructional goals and educational initiatives add value to the school day.

A full-service K-12 educational staffing agency that manages the hiring, background checks, and credentialing of a substitute pool relieves the district’s human resource department of the time and money required. When that agency also handles the training, scheduling, and reporting functions of managing that talent pool, the savings continue to grow. Add in the soft cost savings that include insurance, administration, payroll, and documentation, and contracting substitute staffing and management from an experienced education staffing company like ESS becomes a choice that can both improve instructional quality and keep costs down.

ESS provides innovative, custom-designed solutions to education staffing and management that support your instructional goals while improving the bottom line. Contact ESS so we can work with you to manage costs while providing staffing that supports your strategic plan.