In the South Bend Community School Corporation (SBCSC), one of Indiana’s largest districts, we faced this exact pressure. We were a top-five district by size but ranked in the bottom third of the state for teacher pay. We faced crippling staffing shortages and a looming fiscal cliff.
However, in the 2026 budget cycle, we decided to reject the role of the passive scorekeeper. We embraced the role of the Strategic CFO. By rigorously auditing our own operational assumptions, we found a way to approve a budget that vaults our district to the top 10 in the state for teacher pay — all while our total general budget increased by only a standard 3% inflationary adjustment.
We conducted a deep-dive analysis of the contract and found that we were paying a significant premium for overhead and profit margins that did not translate to service quality.
We funded a flat $9,000 base salary increase for teachers (a 13% average increase) and 20% wage increases for support staff. We did this without a referendum by reallocating over $15 million in structural waste.
Here is the technical blueprint we used to turn operational inefficiencies into human capital.
1. Challenging the "Outsourcing" Default
For years, our district operated under the assumption that outsourcing facilities management was the most cost-effective model. We held a $20 million contract with a major third-party vendor.
As strategic finance leaders, we must audit value, not just costs. We conducted a deep-dive analysis of the contract and found that we were paying a significant premium for overhead and profit margins that did not translate to service quality.
We made the decision to terminate the contract and insource our 200+ custodial and maintenance staff. By bringing these operations back in-house, we regained control over service levels and are projecting $3 million to $5 million in annual savings. This move challenges the prevailing industry logic that privatization is always leaner. In our case, investing in internal capacity was the more fiscally responsible choice.
2. Aggressive Healthcare Procurement
Healthcare costs are often treated as an uncontrollable "fixed cost" in school budgets. We challenged that inertia. Our district had not competitively shopped its medical insurance plan in years, resulting in steady, compounding premium increases.
We took our plan to the market. The result was a transition to a central health fund that is projected to save $6 million to $7 million annually. Critically, we structured this deal to reduce premiums for both the employer and the employee. This turned a liability into a retention tool, proving that SBOs can drive value through rigorous procurement processes.
3. Optimizing Fund Transfers
Perhaps the most technical lever we pulled involved our internal fund structure. In Indiana, districts can transfer funds from the "Education Fund" (instruction) to the "Operations Fund" (overhead). Relying on this transfer to balance operational budgets is a common practice, but it structurally starves the classroom.
In 2024, our transfer rate was 9.1%. Through strict internal controls and the savings generated from insourcing, we aggressively reduced this dependency. We cut the transfer rate to 5.5% in 2025 and approved a rate of just 1.0% for 2026.
This was a deliberate structural change. By forcing the Operations Fund to live within its own means, we protected millions of dollars in the Education Fund, ensuring they were available exclusively for teacher compensation.
The Result: A Structural Shift in Spending
These were not one-time cash infusions; they were structural corrections. By eliminating waste in operations and insurance, we fundamentally altered our expense ratios.
In our 2026 budget, 82% of our general fund expenditures are dedicated to employee wages and benefits, a significant increase from 70.4% the prior year.
The ROI on this strategy extended beyond the balance sheet. Because we could present these savings as a shared victory to our bargaining units, we settled our teacher contract in just four days. Furthermore, our budget was approved by a unanimous 7-0 vote for the first time in five years.
As SBOs, we often feel trapped by our ledgers. But South Bend’s experience proves that the resources to solve our staffing crises are often already within our control. By moving from compliance to strategy, we can find the hidden capacity in our budgets and invest it where it yields the highest return: our people.