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MONTHLY NEWSLETTER: OCTOBER 2006 ISSUE
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THE TRUE VALUE OF AN EFFECTIVE AND HONEST BUSINESS MANAGER
BY AGNES GILMAN CASE, ED.D, A + CHOICE SOLUTIONS
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One of the main reasons that charter schools fail is because of finances: budgets are overspent, accountability for funds is not in place; or actual malfeasance is present. The charter school’s business manger or accountant can save the school from all of these things, but only with the assistance of the school’s Board of Directors.
It is prevalent in regular educational settings and in charter school settings to dismiss all staff members (at the school and on the Board) who are involved with supervising school finance as “doomsayers”, “worry warts,” “cynics,” “wet blankets,” or downright “pains.” Many educators truly believe that the greatest pleasure for a business manger is to say “no” or to prevent the school from doing what it wants to do. For those people who believe this, discussion is needed on the role of the effective business manager. An effective business manager will provide three very important services for the school: develop the budget, monitor the budget, and send out alerts to the Principal and Board well in advance of crisis formation.
An effective business manager will lead the development of the school budget, always in concert with the Board of Directors and the Principal, so that the budget reflects the goals and aspirations of the school. However, there are some caveats to this development that are the purview of the business manager that lead to mistaken beliefs on the part of educators:
A school budget should not be built on faith, but on recognizable income. It is easy to make a school budget balance when some of the revenue is hoped for, but not committed. Authorizers, lenders, and auditors will be looking for budgets that are based soundly in achievable revenue.
Expenditures must be planned in line with that revenue. It might be a good educational idea to have classes of 15, or to have a class set of laptops in every classroom. Does the revenue in the school’s budget support that? If not, the school simply cannot have that class size or have computers in every room. For every expenditure increase there must be an equal expenditure decrease. If the school chooses to spend more on one expense (computers, guidance counselors, etc.) than was planned, then a corresponding decrease in other expenses must happen (unless, of course, the school has received additional revenue).
An effective business manager monitors the school budget regularly. This means that he/she:
Makes sure that expenses incurred reflect the budget. If there is no money for computers, the business manager will be aware if there are expenses made for that.
Ensures that money is spent in the correct area of the budget. If money is budgeted for professional development, only professional development expenses should be spent from that budget line.
Watches the spending patterns of the school and the staff to ensure that there is sufficient money for the entire school year, and for the budgeted items.
All this monitoring leads to the fact that the effective business manager will raise alerts to the Principal and Board of Directors when something seems out of line financially. If there are too many staff members, if furniture costs exceed the amount budgeted, if large numbers of students leave, if gas prices cause an increase
in fuel costs for the buses, the effective business manager will alert the board as soon as discrepancies are noticed. From this springs the impression of a “pessimist” and a “Gloomy Gus”; but the fact is, if there must be a budgetary adjustment, it is easier to begin the adjustment as soon as possible with incremental changes rather than a drastic change all at once. All of these seemingly minor issues have the potential for becoming larger ones. Should the business manager keep these concerns to him/herself until there actually is a crisis, or would a Board prefer to be prepared?
Talk to the business manager. The effective business manager does not want to simply say no, and leave it at that. Neither does the effective business manager want to wait until the last minute of a crisis and “save” the school. The effective business manager wants to seek solutions, but needs the cooperation of the board and the principal. Ask the business manager for options and alternatives. A simple transfer of funds may alleviate the problem. A retaining of staff in financial procedures could be the solution. Perhaps staff members DO need to be reduced, or additional revenue could be earned. Negotiation is usually possible.
An effective business manger can keep a charter school out of financial trouble. He or she WILL be the bearer of bad tidings from time to time; but rather than being dismissive of those warnings, be glad that someone is honestly willing to tell the unvarnished and perhaps unpleasant truth. ?
Agnes Gilman Case, Executive Vice President, A + Choice Solutions
Phone: 443-480-6481
Email: caseaplus@comcast.net
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