Dean Langdon is IASB field services director for the Blackhawk, Central Illinois Valley, Corn Belt and Western divisions. Tom Leahy is an IASB executive search services consultant. Both were Illinois school superintendents before joining IASB.
I t’s budget approval time for school districts in Illinois, so it shouldn’t be a surprise to anyone that Illinois school finance continues to be a challenge needing constant attention.
While the financial problems of today are more daunting than ever, we must remember that local boards and administrators are in the problem-solving business. Working together, locally elected board members and their superintendents and business officials should position themselves to continually establish and revise budget expectations and monitor the financial status of their school district.
The school district budget should reflect the board’s priorities, give direction to the administration and track financial progress throughout the year. The work of preparing the budget through reasonable assumptions happens throughout the year. Effective board/superintendent teams are continually communicating these assumptions at their monthly meetings. The board that waits for the formal approval process to begin to discussing budget expectations will find many decisions have already been made.
Consider these adages as we help you determine your best problem-solving strategies.
“That ship has already sailed.”
In a few instances, the timing of financial decisions places the board’s legal responsibilities at odds with what is practical and realistic. One example is the legal responsibility for approving the school district budget.
By the time the board is legally required to approve the school district budget, the levy has already been approved (the previous December), the teachers have been retained (the previous March), and your staff has already begun purchasing supplies and materials for the school year (most likely throughout the summer). What is the solution for this dilemma?
Best practice involves communication and clear expectations for all parties.
The levy discussion requires the board to think long term about taxing philosophy and the impact on educational needs. Staffing decisions require projections of student enrollment, programmatic impact and the connection to revenue.
Continual communication between the board and administration throughout the year is crucial. It’s not unusual for new board members elected in April to experience this at their first meeting. At that meeting, boards may be amending a budget for the year that is coming to an end, approving a contract negotiated by the previous board or issuing bonds for a project initiated months ago.
“You are never alone.”
How do you know your district is following all of the rules regarding the establishment and management of the budget? What are the requirements to transfer money? What is our debt capacity?
The good news is that you have expertise available to you — so use it! If you are new to the board, you’re arriving to an established organization with a past practice and a history. A veteran board member may be able to help to bring you “up to speed” on the financial history of the district, the expectations of previous boards and how they apply to the budget.
The superintendent can assist with the specific reasoning behind the details of the budget. An appointment with the business official (when applicable and with consultation of the superintendent) may help in a further understanding of the laws that apply.
Finally, the school auditor, a debt issue consultant and/or your school attorney may be able to schedule an educational session with the board. Talking to these individuals will help your board gain more knowledge and build the kind of relationship that will help you to get through the tough decisions ahead.
“Trust but verify.”
Good relationships are built on trust. We trust that fellow board members are not inappropriate in their use of authority. We trust that our superintendent is competent in managing the finances of the district and capable of decision making based on the board’s expectations. We trust that our business office has the appropriate internal controls in place so that theft is unlikely.
Trust is earned through competency, transparency and dependability — all of which require review by a third party.
Effective boards fully use the expertise of the district treasurer and auditor. It is important to note that these individuals can and should report to the governing body, not as a means to play “gotcha” but as a part of the team that verifies the financial work of the district.
The community is more likely to trust a board (and by extension the district) that is open and transparent regarding their financial status. The board has an obligation to model and lead this effort and to expect the same of the administration and staff.
“Plan your work and work your plan.”
A budget is only a plan. The needs of students must be considered throughout the year and changing conditions may impact district expenditures.
On the revenue side, veteran board members will tell you that state and federal dollars, in particular, are always in flux. Increasing class sizes may require the hiring of additional personnel, special education placements may send students off site, and that plumbing project may be more complicated than first thought. The experienced superintendent understands the importance of keeping the board informed as the year progresses.
The effective board will discuss how these changing circumstances fit within their long-term priorities and what changes, if any, need to be made in order to keep the focus on students and their needs. The board and superintendent should always be planning with the best information at the time and then working with the plan as new information becomes available.
“Sing from the same song book.”
It is important that members of the board work together with members of the administrative team in setting financial goals for the district. Good boards know the importance of expressing expectations as a governance team. Good school administrators will listen to those expectations and make daily decisions accordingly.
Both parties know that this relationship is a far from perfect. Board members may have opinions regarding the appropriateness of some expenses, and school administrators may disagree with the financial goals of the board. To complicate matters, you won’t always find policy language that clarifies the expectation of the board.
For example, we all know that staff development programs are important to professional growth. Boards shouldn’t micromanage the decisions regarding “who” goes to “what” event — that should be based on the needs of the organization. Policy and administrative procedures can guide the work of the administration in the areas of expense reimbursements for example, but you’re not likely to have written guidelines regarding distance from home, travel requirements and hotel accommodations.
The relationship must be strong enough that both parties understand these decisions sometimes align past practice, and other times may deviate from the norm. Communicating with each other helps to keep both parties singing from the same song book.
“Focus on the big picture.”
Too often boards find themselves diving into the operations of the school in their role of approving the bills at the monthly board meeting.
Should board members review the bill list and ask questions (in advance with the business office or superintendent) in an effort to further understand district operations? Yes! In fact, this monitoring function is important in establishing and maintaining a trusting relationship with the staff.
Keep in mind, however, the following points:
• The board has already approved the budget through which these items were purchased. More than likely, the new equipment is already out of the box and in the classroom for use. It’s not practical to repackage these items and send them back at this point in the process.
• Any objections you have to the purchase of specific items may be based on your individual experience or expertise. Where and what type of paper the district purchases is a decision by the people who use paper and make the copies. Board authority lies with the collective board of education, not individual board members.
• Boards should always model the necessary delegation of authority. And just as the effective board allows professionals to do their work, the effective superintendent does the same.
So, how do we use the monthly approval of the bills function to monitor district finances? We do that by asking questions (again, in advance of the meeting), learning more about the operations of the district and focusing on the big picture.
Rather than micromanaging the purchase of instructional materials, you might want to ask: “How do we determine the need for new materials?” “What process is in place to ensure quality for the best price?” or “Is there a schedule for replacement?”
A focus on the big picture will help to communicate the board’s expectations so future administrative decisions align with those expectations.
“Communicate, communicate, communicate.”
Successful leaders know they must repeat their message many times and in many ways in order for the public to hear it and understand it. School boards should do the same.
If your board’s financial picture has improved — take credit for it. Promote your recent decisions designed to take control of district finances. Publicize the board’s priorities in leading the district and do so multiple times.
Conversely, if you have tough decisions ahead of you, communicate those issues early and often. Lay the ground work for budget cuts or tax increases so that no one is surprised by the move.
Board members can and should be involved in this work by establishing and communicating “talking points” regarding these decisions. They will help the district by promoting transparency and increasing trust with the community.
The board’s role in the budget process is continuous throughout the year. While it may be too late to impact the 2012-13 budget, now is the time to consider the board’s role throughout the coming year.
Effective board members know the importance of asking good questions, using expertise and clarifying expectations, all while maintaining a positive relationship with fellow board members and the superintendent.
The tough budget decisions ahead of you will still be difficult. But we can’t think of a more qualified group than locally elected boards and their administrative team to make decisions on behalf of the children in their own communities.
A code of conduct for finances
1. I will represent all school district constituents honestly and equally and refuse to surrender my responsibilities to special interest or partisan political groups.
Rather than lobby for increased funding for the school music program … ask your superintendent about the methods used to fund all programs and initiatives. How do we fund new programs? Growing programs? The entire board has a responsibility to be sure these resources meet the board’s mission, vision and goals.
2. I will avoid any conflict of interest or the appearance of impropriety that could result from my position, and will not use my board membership for personal gain or publicity.
Rather than accepting a position as the assistant coach (while continuing your board membership) … assist your administration in recruiting candidates. Encourage others to apply but be clear that the administration will be doing the hiring. Although The Illinois School Code allows board members to earn up to $1,000 in other district jobs (aggregate amounts cannot exceed $2,000), your dual role could be troublesome. Avoid it if possible.
3. I will recognize that a board member has no legal authority as an individual and that decisions can be made only by a majority vote at a board meeting.
Rather than become involved in purchasing decisions because of your particular expertise (skilled tradesman, equipment salesman, etc.) … use your expertise to advise the entire board at a board meeting. Knowing that only the entire board can make the decision, advise your colleagues and allow the entire board to guide the district
4. I will take no private action that might compromise the board or administration and will respect the confidentiality of privileged information.
Rather than negotiate with district administrators or employees “on the side”… work with your board colleagues and superintendent on an agreed upon process. Working as a team ensures that your negotiated settlement will have the blessing of the entire board.
5. I will abide by majority decisions of the board, while retaining the right to seek changes in such decisions through ethical and constructive channels.
Rather than continually and publicly criticizing the latest contract settlement or administrator salary … be sure the board knows your opinion at the appropriate time and ask, diplomatically, for a future discussion at the next opportunity, according to the budget calendar or the settlement terms.
6. I will encourage and respect the free expression of opinion by my fellow board members and will participate in board discussions in an open, honest and respectful manner, honoring differences of opinion or perspective.
Rather than squelch the board discussion by pointing out the expense of a particular initiative … find a way to link the discussion to district mission, vision, goals. Yes, cost is a factor, but even expensive programs may be worth it if they are effective and aligned with district goals and priorities.
7. I will prepare for, attend and actively participate in school board meetings.
Rather than expect your administration to know all of the details of the financial report … review your packet in advance (with a pencil). Contact your superintendent prior to the meeting to ask any questions. If you feel the entire board should hear the information, your superintendent will be more prepared for the discussion.
8. I will be sufficiently informed about and prepared to act on the specific issues before the board, and remain reasonably knowledgeable about local, state, national and global education issues.
Rather than publically criticize the financial decisions of previous boards … know that local, state and federal assumptions are always shifting. Those boards may have made the best decisions based on the information at the time. Now, it’s your turn to decide, so stay in tune to educational funding issues that will impact the distinct.
9. I will respectfully listen to those who communicate with the board, seeking to understand their views, while recognizing my responsibility to represent the interests of the entire community.
Rather than dismiss a new idea as not “the way we’ve done it in the past” … listen and analyze critically. Does the idea fit our district purpose? Is it effective for all of the district’s stakeholders? Changing needs require changing programs. However, the board alone is responsible to monitor finances. Beginning a new program requires asking critical questions about resources and costs.
10. I will strive for a positive working relationship with the superintendent, respecting the superintendent’s authority to advise the board, implement board policy and administer the district.
Rather than spend board meeting time to criticize the purchase of a relatively inexpensive item, speak with the superintendent about the purchasing process. Sometimes other factors are involved in the purchasing process including the delegation to others, service, vendor relationships and the quality of the item. Do we really need to discuss the purchase price of grass seed, tennis balls or number two pencils?
11. I will model continuous learning and work to ensure good governance by taking advantage of board member development opportunities, such as those sponsored by my state and national school board associations, and encourage my fellow board members to do the same.
Rather than assume your own background knowledge will be enough to guide and advise your district … seek out opportunities to network with board members in other districts. What realities are they facing and how have they dealt with their financial issues?
12. I will strive to keep my board focused on its primary work of clarifying the district purpose, direction and goals, and monitoring district performance.
Rather than assume others are monitoring financial status … ask questions, understand important trends and ask your board to consider possible financial scenarios. All might be well now, but what if the economy takes a down turn?