Here are six learned lessons applied to responsible public finance.
Lesson 1. Pay attention to the small details so they don’t become big problems. Don’t be lazy! As a newly minted part-time teacher, I was given the routine task of completing the supply request for my department. When I asked several veteran department members for guidance, one grizzled 30-year veteran responded, “Just fill the form out like we did last year and don’t sweat it.”
I went to the supply closet and found a stockpile of office supplies: paper clips, pens, pencils, notepads, and more. It was clear that filling out the form as had been done in the past would only result in a greater surplus of these unused items. Instead, a large portion of those supplies was distributed to other school departments so they wouldn’t need to order them.
This was one small detail in the big picture, but multiplied across an entire school district, it brought to light the fact that we were not using our financial resources effectively.
Lesson 2. Understand that schools are spending institutions focused on improving the well-being of children—priority number one! Obviously, schools are not savings institutions. As a school-based administrator in the early 1990s in a school with over 3,000 students and approximately 350 staff members, I worked with a range of leaders who displayed a variety of leadership styles. The principal was conservative with financial resources and I, as a new school leader, was more “action-oriented.” The principal wanted no ripples on the lake and worked to maintain the status quo by managing by avoidance and claiming, “We have no money.” With this approach, no decisions were necessary, no one was upset, and the “lack of resources” claim was the universal reason to do only the minimum.
Fortunately, a new principal arrived on the scene with a completely different approach. After realizing just how much money we had on hand, the principal directed me to develop a plan to expend the available funds in a fair and equitable way by the end of the school year. Although having no funds is stressful, having to spend money quickly and resourcefully promotes anxiety.
In the end, we could, in a collaborative way, allocate the funds to areas that needed attention and focus on the needs of students.
Lesson 3. Explain how you are spending your money so your priorities are evident. Follow the money! In working with new administrators, especially in growing school districts, I came to recognize the importance of linking the strategic plan to the budget. This is a purposeful practice at every level: district, department, school, and classroom.
We must all recognize the part we play as fiscal stewards of public funds. Our actions and how we use our budget resources should be aligned and influenced by the strategic plan goals.
Demonstrating this connection is essential.
If you want to ensure a continuous funding stream for any initiative, the proof is in the data! At the beginning, ask, “What evidence do I need to collect to support the effectiveness of this budget item, and how will I demonstrate that it is making a difference?”
Your budget proposal will rise or fall on the evidence you collect and how well you use these data to communicate the need for funding.
Lesson 4. Know the rules of the road before leaving on your purchasing/procurement trip.
Ben Franklin said, “By failing to prepare, you prepare to fail.” I propose, “Preparing to plan is planning to win.”
Time and again, I have seen districts make purchasing mistakes because individuals do not know the procedure or took shortcuts that did not follow the district’s procurement processes. This is a primary issue that gets school leaders in trouble and often ends in reprimands, disciplinary action, or termination.
As stewards of public funds, we must all know the rules and follow them. Procurement rules should be accessible to all staff members and included in annual staff training.
Another common procurement issue involves conflict of interest. Be aware of associations that compromise your position, integrity, and professional responsibilities when purchasing and negotiating contracts. Check with your legal counsel for guidance.
Lesson 5. Recognize that your annual budget spending plan is just that—a plan. We make plans so we are prepared and focused on the goals, but goals and plans can change. When developing an annual budget spending plan, do so collaboratively to determine how resources will be allocated and used. I encourage our district budget managers to have 90% of their budgets allocated at the start of the fiscal year, with 60%–70% of those funds expended by December and 80%–90% by March.
Naturally, there will be adjustments along the way, things will change, and priorities can shift. Holding back 10% is a sound practice to allow for an unexpected expense or to prioritize unforeseen conditions that must be addressed immediately. We gain peace of mind in knowing that we will not need to revamp our total budget.
Lesson 6. Differentiate to be equitable and address the individual needs of each child. Equity is not equal; equity is being fair and just! Are you basing the use of your fiscal resources on the needs of children in your schools and district? Is the element of equity guiding your spending and priorities? Regularly review your budget allocations and spending in relation to your data and the needs of your students—academically, socially, and emotionally.
Reconcile
We have been given the responsibility and trust to carry out our civic duty. It is incumbent on all of us to act honestly and responsibly with the resources entrusted to us by those we serve. Most importantly, if we act with integrity, we can positively change the future for many people. We need to pass these lessons along to the next generation of leaders to guide them in learning, growing, and successfully carrying out their responsibilities.
As fiscal stewards of public funds, we must be transparent, accountable, and trustworthy in how we expend funds.