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September/October 2021

Money Talk: Three Core Principles to Drive the District Forward

By PJ Caposey

 
“Having money isn’t everything, NOT having it is.” — Kanye West
 
I am not positive, but I am pretty sure that I will be the first person to ever quote Kanye West when writing for the Illinois School Board Journal. But, in my experience, there is no comment or quotation that is truer when it comes to executive- and governance-level leadership of school districts.
 
As the quote indicates, having money will not necessarily make you a successful school district or a successful school board. On the flipside, however, not having the money necessary to do the work, or having had the money and mismanaged it, is almost always the key to being unsuccessful.
 
Let me explain.
 
Every school district in Illinois wishes it had more money. This goes for districts spending less than $10,000 per year operationally per student and those spending 2.5 times that. The disparities in school funding and resources are abundant, but every leader I know wants more resources so they can do more for their kids. While whatever amount you have is “never enough,” the harsh reality is that no matter how affluent a district may seem, every leader and school board member will undoubtedly be faced with difficult financial decisions that carry an enormous amount of impact and gravity.
 
In our personal lives, this is referred to as lifestyle inflation. No matter how much money your family makes, your lifestyle typically rises to the point where difficult financial decisions are omnipresent. The same happens in schools.
 
Don’t believe me yet? Let me share the view from a superintendent’s standpoint. Each and every superintendent I know wants to improve scores, to “move the needle’ on student achievement. But, if history around the state tells us anything, it is that student achievement can stay stagnant and a superintendent may well keep their job, but if money is mismanaged then it is time to dust off the resume. Money matters!
 
That leaves everyone with the challenge of deciding how to spend taxpayer dollars within the district. Every school has infinite needs and finite resources. Financial management is incredibly complex. It is a process. It is a conversation. It is uncertain. It is never-ending. It is unpredictable.
 
But that is where we come in as leaders to help pave the way and ensure that we maneuver in a way that supports our kids, honors our employees, and values our community. And while it may be impossible to draft the perfect budget, following three core principles — priority-based budgeting, being slow to add expenditures yet quick to cut them, and clear and transparent communication — will help any superintendent and board team create a budget that is thoughtful, is fair, and drives your district forward.
 
Priority-Based Budgeting
Have you ever looked at your 500 line-item and $24 million budget and simply thought, “why?” If so, that is the essence of priority-based budgeting. In order to operate effectively in a priority-based budgeting system, you must first know your priorities. Sounds simple, but as you are reading this, can you clearly and concisely articulate to yourself what your district prioritizes when it comes to expenditures?
 
When I ask this question about priorities in a real-world scenario, most people reference their mission statement. The good news is that the thought process is solid to start with the mission. The bad news is that the mission statement is so vague that nearly any investment or expenditure of money could in theory help drive the district toward achieving the mission. Said differently, in the over 850 districts in Illinois, and everyone’s mission sounds pretty similar, in the manner of “working to prepare students for their tomorrow.” As we know, that is a big task and it does not serve to funnel decision-making acutely.
 
Priorities are more easily understood and defined by looking at the vision, values, and stated goals of the district. If you read this and panic because you do not think your district has these or discusses them much, that is okay. At least you now know where to start.
 
While my district is certainly not perfect, I will use our work as an example to help illustrate this point. In Meridian CUSD 223 in Stillman Valley, key performance goals are centered on third-grade reading scores and fifth-grade math scores. Other key goals involve streamlining processes and improving culture. These goals permeate everything we do. They are the backbone of my superintendent evaluation, the evaluation of all leadership team members, and are the key components of our district and school improvement plans. To get even more granular, we attempt to move toward these goals while adhering to our core values of “Integrity, Continuous Improvement, and Excellence” in order to achieve our vision of having a district with small-town values, but world-class results.
 
The vision, values, and goals help create a very clear funnel when considering future expenditures. This simple scenario shows how this works for us: In the past few years we were in a decent budgetary position and going to consider adding some full-time certified employees (teachers). We recognized that we would like to expand elective offerings at the junior high school level. At the same time, research told us that limiting class sizes at the lower elementary level and adding instructional coaching would bring us closer to the goals and priorities of the district. As such, the increased expenditure was made to do just that, and we did not add electives at the junior high level. While the junior high elective expenditure would have benefited our district, it would not move us closer to our vision and goals. When push came to shove, it was clear that we should move in a different direction.
 
So, let’s take it from my district to a more general example to drive the point home. Imagine three districts of similar size, performance, and financial situation are able to expend nearly $60,000 additional dollars in a given year. Given this scenario, one district adds a social worker, another adds an instructional coach, and the third invests all $60,000 into a diversity, equity, and inclusion professional development plan.
 
The question is which district made the appropriate expenditure?
 
The answer is simple. We do not have enough information to know. They could have all been the perfect expenditure or they could have all been misguided. The answer lies in the stated priorities, values, and goals of the district in question.
 
The bottom line is that there is so much work to be done in schools. The work that needs to be done is almost always good work. One thing that sets highly effective leadership and governance teams apart is the understanding that the right work in one district will not necessarily be the right work in a different district.
 
To conclude, unless you understand your priorities, vision, and values it will be very difficult to understand if you are making the correct expenditures.
 
Slow to Add, Quick to Cut
As the old Russian proverb goes, “measure seven times, cut once.” One of the areas I see that derails the budgeting process for many districts is that they are quick to add expenditures (people or programs) and slow to reduce expenditures. The process should be inverted and complementary.
 
When an expenditure (particularly a revolving expenditure or one that occurs year over year) is added to the budget, it should be scrutinized. Great leadership and governance teams do this while maintaining the integrity of the roles. If a superintendent brings forward an extremely well-vetted and researched recommendation and has been updating the board of education on it for four months, the board does not need to turn around and duplicate that work. In that case, it is time to trust your one employee and chief executive.
 
However, when a contract for a new partner or vendor is brought forth with little explanation of how this solves a problem or brings the district closer to its stated priorities, the process should be slowed and vetted.
 
One of the processes we have added to streamline is partner acquisition. When a new partner is added we make a clear delineation of how we are going to hold ourselves accountable in determining whether the partner is viable. This may look as simple as this, we will commit to working with this partner for three years, and at that time we will both look at performance indicators A, B, and C, and survey staff for their impression on the viability of the resource. If it is not providing additional value for the cost, we will move on from that partner at that time.
 
What happens in many districts is that once a partner is “in” it tends to stay in whether or not the service is being used or showing results. Once something is accounted for in the budget, it tends to roll over from year to year without much scrutiny. In many of these instances, it’s not because they don’t want to cut it, it’s likely because they have no idea what value it should bring or how to measure that. Therefore, any anecdotal evidence of success can sway its retention.
 
For example, as education continues to evolve, and districts follow suit, the number of digital and software-based partners will continue to grow and eat away at valuable resources. The process to determine the effectiveness of these products is a core element of effective budgeting. To be clear, some products are amazing, but if they are not being used with fidelity they will show limited results. By encouraging districts to scrutinize partners, we run into a situation like that above. The product itself may be great, it just may not be great for your district.
 
The bottom line for me is this, there needs to be increased processing time on the front end of major additions and purchases and formalized evaluative processes on the back end that can serve to reduce the time districts stay partnered with vendors that are showing a low return on investment.
 
Communication
As noted, in many districts the community at large is more concerned about how tax dollars are being spent than how the students in the district are achieving. Thus, communication is absolutely essential. While I certainly do not know all the answers on how to do this (I still get my share of angry emails), in Meridian CUSD 223 we have deployed three techniques that have helped our small, relatively poor district in an incredibly anti-tax portion of the state pass two referendums in the past seven years.


Strategy 1: Video. Video. Video. The voiceover PowerPoint or Google Slides presentation has been invaluable for us as a district and in particular, for me as a leader. I am a strong believer that if you cannot say something absurdly simply, then you probably do not know it well enough. Each year, distilling the budget, the levy, and audit findings into five-to-eight minute videos for public consumption challenges me in this area. I am a huge fan of video for a few reasons. The data indicate our consumption rate on these videos is approximately 10% higher than when we address something in writing alone. Next, tone can be implied. Furthermore, an explanation of a simple (or complex) graph is much easier through the spoken word. Additionally, a static video that can be accessed many times is as transparent a communication as possible, and it is easily posted on a website, included in an email, and blasted out on social media.
 
Strategy 2: Simple language. Math is scary for many people. Most school leaders have gone to school for multiple semesters to learn school finance. If the communication is in a modality or language that administrators and executives “get,” most of our people will struggle to understand it.

I always use what I call the “Big Phil” test. Big Phil was the nickname my friends gave my dad. My dad is wise, street smart, and knows little to nothing about how the education system works. Whenever I create a video, I pretend I am talking to my dad. If I can put it in words that he would understand and avoid the inclination to use financial jargon to make myself feel smart, then I know I am creating something truly accessible to the majority of my community.


This manifests in almost every conversation. I could talk about the specifics of our tax rate or I could say something like “the impact of this on someone who owns a $250,000 home is this, assuming your property value did not increase this year.” Talking about the tax rate makes sense for me, but talking about the direct impact on the homeowner is what will build trust and make people want to continue to consume the information we are putting out.
 
Strategy 3. It is not communication if nobody is listening. In the last decade the amount of communication from districts to communities has increased exponentially. In large part this is due to the availability and increased leveraging of social media and better tools with which to communicate. However, no amount of communication matters if it is not being consumed.
 
We need to track our data and consumption rates. For instance, for eight years I created a budget at-a-glance document that would take me probably 20 hours to complete before considering the logistics of whether or not people were consuming the content. When we started tracking link clicks to see how many people were consuming the content it became clear that I was creating something that looked nice on the website and was great documentation of what was taking place, but was not actually communicating.
 
In that situation, the board of education and I discussed why I was creating the document. We decided that the return-on-investment was simply not worth it and we stopped creating the document this past year. Mind you, we quit making this document in the middle of a referendum campaign. The net result, not a single person asked about it, or for it, and the referendum still passed. The lesson is that communicating about finance is not about producing content. Communication about finance is about creating content that is accessible to your public and is consumed. If not, the effort is all for naught.
 
I hope this provides some guidance and insight on how we can ‘tweak’ the budgetary process in order to better serve and lead. Being the fiscal steward of our district’s dollars is the most essential part of a superintendent’s job duties and I would argue the same for our elected school officials. While I do not think it is our most important job, the things that we desperately want to do in order to better serve our students and constituents rely upon our efforts as finance leaders.
 
PJ Caposey, Ed.D., is an award-winning educator, keynote speaker, consultant, and author of eight books. He currently serves as the Superintendent of Schools for the nationally recognized Meridian CUSD 223 school district in Northwest Illinois. You can find him on most social media platforms as @MCUSDSupe. Resources associated with this commentary, including a link to Caposey’s books, can be accessed at bit.ly/SO21Jres.