Afton advises one of the nation’s largest public charter school systems through financial reorganization
Immediately prior to the founding of Afton, Afton co-founder, Carrie Stewart, advised Aspire Public Schools (“Aspire”) on improvements to the timeliness and accuracy of the organization’s financial information utilized by board and school level decision making. At the time, Aspire operated 30 schools for 9,800 students in California. Today, Aspire operates 40 schools in California and Tennessee, serving 16,000 students.
Our guidance to Aspire included recommendations for board finance committee governance, finance and accounting roles, responsibilities and skill sets, cash flow guidance, and long term planning considerations.
Following this work, Afton was engaged to assist Aspire in 2012 on their refinancing strategies. Afton performed an in-depth analysis of Aspire’s multiple debt financings and its multi-year projections, resulting in a prioritization for future refinancing efforts that could provide the most financial relief. Over the course of the next several years, Aspire was able to successfully execute on these recommendations. In 2015, Afton assisted the organization again, this time, performing a review of the organization’s payroll processes.
Our Insights
As school system growth plans evolve, so should the debt structure. With the help of Afton Partners, Aspire was better able to make informed decisions on prioritizing schools with debt service challenges that needed to be addressed. This allowed Aspire to focus on building reserves and pay down specific debt over time, so they could eventually refinance and move those schools into a more sustainable financial circumstance.
For charter management organization’s executing on expansion plans, back office skill sets and acumen need to be enhanced in advance, otherwise they lag behind the needs of the growing organization. In the case of Aspire and many other CMOs that Afton works with, additional accounting skill sets were needed. What seemed like “system” problems were actually accounting gaps which led to challenges with mid-year financial reporting.