My View
Shortchanged Proficiency in School Finance
BY JAMES PARLA/School Administrator, October 2020

BUDGET DEFICITS AND budget vote failures often are signs of trouble for superintendents. All too often, as evidenced through published news reports and my observations as a longtime superintendent, a school district’s financial woes lead to the departure of its superintendent. Understanding school finance is essential, especially during a period of shrinking public resources.

During the 17 years I was a superintendent and my subsequent time as a professor, I have seen superintendents who are sorely lacking in their knowledge of school finance. I have witnessed school districts where the lack of proper financial management processes has resulted in funding shortfalls that evolved into major financial crises. Superintendents who depend exclusively on their business managers to handle the financial operations of their school districts, without having their own knowledge of financial matters, are creating a recipe for disaster.

One of many examples recently occurred in a 3,000-student suburban district in downstate New York. At one point during the school year, the superintendent informed the school board that the budget would experience about a $3 million deficit due to inaccurate revenue and expenditure estimates. A review of the district’s finances by the state comptroller’s office noted that estimated revenues and budgeted expenditures were not reasonable and would result in a sizable operating deficit.

With its fund balance depleted, the school district presented a school budget to the voters that carried a tax levy exceeding the statutory cap increase. The budget failed twice, resulting in a contingency budget that required significant cuts in staffing and pro-grams. The superintendent was suspended shortly after the budget rejections and subsequently separated from the school district. This is not a unique case.

Corrective Actions

During my tenure in administration, I was hired in districts plagued by financial problems that required procedural changes to maintain fiscal integrity. In one district, the absence of mandatory state reporting for summer special education cost reimbursement led to significant funding losses over multiple years. Luckily, I had the experience to identify problems and develop corrective action plans.

Superintendents’ career paths typically lead through roles in curriculum and instruction. The New York State Council of School Superintendents, in its 2015 survey, Snapshot of the Superintendency IX, reported that 45 percent of superintendents had moved directly from middle/high school principalships. Survey respondents felt most prepared to address curriculum and instruction, but they rated their business acumen as low.

The lack of school finance knowledge is problematic for both new and veteran superintendents. They ought to have more than a surface understanding of school finance to ensure the fiscal viability of their schools and their own survival on the job.

Training Options

Where to turn for professional learning opportunities? Outside consultants, including those affiliated with regional education centers such as a BOCES in New York, are a good starting place. The Questar III BOCES in Castleton, N.Y., specializes in school finance matters, running seminars and sharing informational resources.

Graduate programs in educational leadership generally include courses in school finance. However, in his study of the effectiveness of universities’ educational leadership preparation published in the NCPEA International Journal of Educational Leadership Preparation, Arvin D. Johnson found 30 percent of the participating administrators said their programs prepared them inadequately in the area of school finance and budgeting. The efficacy of these programs needs to be reexamined.

Superintendents could stay informed of potential troubles by attending meetings of their school business and human resources personnel. They could meet periodically with claims, internal and external auditors to ensure compliance with regulations, policies and the law. Networking with superintendent colleagues, especially those with strong finance backgrounds, is another option.

Of course, one thing is a given: Superintendents must keep their school boards abreast of financial matters, leading with transparency and avoiding surprises.

JAMES PARLA, a retired superintendent, is an adjunct associate professor in the Urban Education Leaders Program at Teachers College, Columbia University.