Contrary to popular thought, the Treasurer/CFO of a school district is not the sole owner of the district’s budget, nor should they be. But, as Treasurer/CFOs, we are the compiler. We should certainly understand the budget so that we can speak to it if asked by community members. So, who should we include in the budget process? The answer to that question is simple: all administrators from the superintendent to the operation department supervisors.
Starting at the cabinet level is always a good practice. Cabinet or district Leadership team meetings are typically held once per week. Asking this team for any significant upcoming expenditures will help start a conversation about future planning, both academic and operational. This meeting is a great opportunity to discuss the five-year forecast inputs with the leadership team to prime them for the upcoming budget discussions. Educating leadership on how the forecast works along with all the other funds that can be used to cover expenditures is important. The more the leadership team understands district finances, the better you can all work as a team when preparing the budget. It is just as important to have these conversations with building and department leadership. When everyone is working together, the budget process is so much smoother and everyone can speak to it if asked.
Why is it important to involve so many people in this process? Because our academic leaders make programming decisions in the best interest of our students, and those decisions typically have an associated cost. The Treasurer/CFO should attend as many administrative meetings as possible. Yes, it can feel tedious at times, but it is important. Many times, our academic leaders are so focused on student needs that they do not think about the financial implications. You can be the financial leader when this occurs, making sure they understand the cost and the impact to the five-year forecast, as well as the overall financial health of the district. The Treasurer/CFO can explore a solution that accomplishes the academic and financial outcome to meet the needs of both students and the district. This is not always easy. Other programs may need to be discontinued to have the funds necessary to pay for the new program. This is where financial leadership is key. We cannot and should not always say no without first working through the rationale and value of the program being requested.
What is a good timeline to have your budget completed? As we all know, the major areas of our budgets are salaries and benefits. Staffing conversations should begin, at least at a high level, by January so your district can benefit from a strong applicant pool. A best practice for staffing conversations is meeting with each building and department separately to understand their needs. Then, bring all levels together to hear the needs of others. This helps everyone see the bigger picture. Additional and replacement FTEs should be justified. Employees should not be replaced just because the position exists. Nor should new FTEs be added just because they are being requested. The budgeting process for the remaining forecast lines should also begin in January. The goal is to have all budgets finalized before June so the board can approve them, if that is your process. It is also important that buildings and departments know what their budget is for the next fiscal year. Getting a jump on summer ordering can ensure materials and supplies needed for next year are delivered promptly. If you can finalize your budget, which should match your five-year forecast, the board can approve the permanent appropriations at the June board meeting, and you will be set for the next fiscal year!
It is a Treasurer/CFO’s nature to hold the responsibility of the budget process close, but administrators need to be involved so that the budget you compile is all-encompassing. We must help find solutions. Understanding the academic goals of the district and what the administrative team is trying to accomplish is an important part of our positions as treasurer/CFOs.
Becky Jenkins
Senior Forecaster, K-12 Business Consulting, Inc
Treasurer/CFO, New Albany-Plain Local School District