Managing Our Expenditures

It was sure great to take a few weeks off from writing this weekly column! I believe it a wise practice every once in a while to pause for a brief respite. Here's a fun fact: This post will mark the 481st article that has been written since this blog began in 2011, the first of which was posted on June 9, 2011 (it was a very lame first attempt). That comes out to over 40 posts per year. Frankly, I don't think anyone will argue with the fact this been a long year (that started in March of 2020) where a lot of my posts singularly focused on COVID. Truth be told, Ann and I decided that once we had both been vaccinated we would take a vacation. You might be surprised to know that while things are returning to normal there continues to be a great deal of caution around the country with regard to mitigation protocols that are still in place. However, I would anticipate a relaxing of much of these protocols in the coming weeks. Thankfully it appears that we are going to make it. I just realized that at the time of the publication of this article we will only have eleven days of school remaining!

In these waning days of the school year, a hefty agenda remains to be tackled. Of primary concern is to fill a number of vacancies that we have remaining in our teaching force. As a start, I have to give a ton of credit to the building administrators and their teams for the the work they have done so far during this hiring season. In most cases we have been blessed with some deep pools with rich talent. We have been able to hire some outstanding educators to join our ranks next year. Unfortunately though, with some positions, we are beginning to experience significant challenges with regard to teacher shortages in some content areas. My team continues to work the problem and in a coming post, I'll give you a peak behind the curtain and share how our hiring process works, what we value, and the road from candidate to employee. 

We are also putting the finishing touches on our plans for a comprehensive summer school. Comprehensive because of the fact we are not limiting our summer school program to students who have been identified as qualifying for services due to an Individualized Educational Plan (IEP). Instead, this summer school program is for students participating in the general education program who could benefit from some extended learning due to the COVID shutdown last March. So far we have had a great response from families and I believe this will be an outstanding opportunity where we will be able to close the learning gap. 

The two other big pieces remaining for the school year include requisitions and curriculum adoptions. Requisitions include rather mundane items such as pens, pencils, paper, and other material that will be used in the classroom next school year. Curriculum adoptions are exactly that: each year a content area is typically up for renewal so teachers of that content, along with the teacher leadership team and building administrator who is tasked with supervision review materials and make a recommendation for adoption. This year we are in the final stages of adoption of a 7-12 English/Language Arts curriculum. I hope to have that in front of the board yet this month, but it may need to be delayed to June. 

All of those items need to be managed within the confines of the budget that has been adopted by the board and subsequently managed through my office. This brings me, (finally) to my point for today! You may recall a conversation a few weeks back where we talked about how school revenue is generated and went into great detail about the differences in state aid, property tax collection, and the federal infusion of money. 

On the expenditure side of the ledger, it is important to understand with great clarity where the majority of the money goes. It may surprise you to hear this, but running a school is a very labor intensive process. You can see this by looking no further than where our resources are allocated. Over 80% of operating budget goes to employee costs. This is precisely the reason why, when faced with budget cuts, school districts often have little choice but to make those reductions by reducing the number of employees on staff. There is very little 'low hanging fruit' when it comes to budget reductions. Perhaps, if one is lucky they may be able to reduce energy consumption a bit, but when looking at the metrics that are outlined in the table above, it is readily apparent where the money is spent in a school budget. 

Unfortunately when it comes to the budget development cycle in public schools, most of the time we don't have answers to many of the big budget questions that need to be answered by the time our certification process is required to be completed. Variables are missing and employee costs are largely unknown. Because of this (and my past experience), I have adopted a somewhat conservative approach to budgeting. Quite simply stated this is based on the premise that we underestimate our revenue and overestimate our expenditures. What you end up seeing in the newspaper then, is an illustration of that work at the macro level. Call it a 'worst case scenario' if you will. In this case, the published budget algorithm is quite simple: I take the current 'function' category, increase it by 4% and round to the nearest $1,000. Then, over the course of the next several months as those same variables become known, a more refined budget picture begins to emerge. 

At this point in the school year, and as the variables are becoming more refined, I can now anticipate the budget for the next fiscal year to actually increase more in the neighborhood of 3.11%, while at the same time adding an additional FTE to our employee count. As those big agenda items described above become more defined and ultimately resolved, a much clearer budget picture will continue to emerge over the course of the next several months.

The final takeaway is that due to our budgeting practices and philosophy, coupled with an infusion of federal stimulus and a few lucky breaks along they way, we are poised to emerge from the pandemic on very solid financial footing.