Attending the Association for School Business Officials (ASBO) Envision 2020 conference this year provided great insights on what topics were most on the mind of school finance leaders. Seeing people from across the nation (and world!) come together to tackle the most challenging problems districts have had to face this century was inspiring.
It was interesting watching CFO roundtable discussions on a wide range of topics such as district budget uncertainty and school reopenings. While no one person had the perfect answers, the exchange of ideas and best practices proved that these leaders were willing to step up and guide staff and students through this unprecedented time.
Among some of the most interesting conference takeaways were the importance of strong financial communication, optimized financial allocations in a time of budget and operational uncertainty, and the feeling of isolation faced by many finance personnel across the country.
Communication of Financial Information
Finance leaders are often tasked with educating principals, department heads, and board members on their financials. One common point raised was that many of these stakeholders don’t have finance experience and feel disconnected when jargon is used with them. The solution posed by some (such as Kim Cranston, the Executive Director of Missouri ASBO) was to explain data visually and use examples that relate to the real life of the budget owner. The core goal of all such communication is to create and increase trust, more important than ever in a time when many feel anxious about school operations.
It’s critical that financial information is understood across an organization, and doing this means finance leaders have to build the context and narrative around the numbers to ensure the information is communicated effectively. The most effective finance leaders are adept at molding their messages to various audiences depending on their role. The need for quality communication is amplified by current events causing budget and operational uncertainty.
Decision Making in Uncertainty
Another major obstacle faced by finance leaders is navigating the current uncertainty. The pandemic has made future revenue levels unpredictable and budgeting more difficult. Compounding this challenge, ambiguity about the educational delivery method (virtual vs. hybrid vs. in person) makes financial allocations more difficult to manage while ensuring cost efficiency.
Apart from COVID’s impact on state and local revenues, which has negatively impacted districts across the country, districts still don’t know whether there will be a federal education relief package passed to help them survive the economic downturn. Without these funds, many districts are spending more conservatively, which could have adverse effects on students when much-needed school programs lose funding. On the operational front, without universal direction regarding school reopening plans or phases, districts are often caught in the middle and having to plan for both online and in-person scenarios for students. According to Dr. Marguerite Roza, the Director of the Edunomics Lab at Georgetown University, planning for both online and in-person is the most expensive option because funds have to be spent aggressively to improve the technological infrastructure for districts while also paying to maintain staff and prepare physical facilities for a socially distanced educational environment.
This combination of future revenue uncertainty from pending legislation and cost structure increase from unclear operational direction is straining K12 finance leaders. The simple solution of greater certainty provided by federal, state, and local leaders would immediately improve the financial position of districts across the nation as they strive to provide the programs students need.
Island of Finance
One surprising takeaway from the conference was the sentiment that CFOs often feel isolated from other decision makers in the district. The unfamiliarity and discomfort that many have for finance seems to seep into how they value the input of business personnel. CFOs are viewed as detached from academic operations and their information isn’t always taken to heart when it comes to reopening plans and changes in the education environment. They feel like they’re on an island apart from the rest of the organization.
This trend is not productive; decision makers need finance leaders to tell them what is monetarily feasible so they can act accordingly. It is possible that the reason CFOs feel their perspectives are not well-received is because they haven’t found the ideal way to communicate them in a way that considers context and makes others comfortable with the CFO’s domain of excellence (as touched on above).
In the face of these challenges, it is heartening to see CFOs persevering to achieve excellence for their students and provide what students need when they need it the most.
How can Edstruments help?
Ultimately the above takeaways from the conference show a lack of clarity and the impact that it has on school districts. Without transparency in finance, spending behavior is not optimal for students, stakeholders are uncertain of the constraints they can spend in, and the finance department more generally is isolated from the rest of a district.
The Edstruments platform can help create greater transparency within school districts and alleviate the above issues by taking accounting data and displaying it in an easy to navigate, visual format that allows budget owners at all levels to interact with their finances in a simple way. It also makes it easy to give external stakeholders a clear and real-time picture into the financial operations of the school district so that strategic goals can be met with greater efficacy. Reach out to us at hello@edstruments.com to schedule a demo and see how we might serve your district!
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