We believe effective financial stewardship consists of three major pillars:

• Enacting your mission through resource allocation,
• Protecting your money with controls and governance, and
• Making good resource decisions that can be sustained and leveraged toward achieving your desired long-term impact.

Leaning into your strategic fiscal oversight and operations is in tune with the moment – many public schools face elevated pressures related to enrollment uncertainty, ESSER funding expiration, student needs, and talent, all of which have significant financial implications. Further, charter schools have disproportionately complex funding and financial reporting and overarching public policy circumstances. Getting rigorous with your financial stewardship can be an enabler to navigating those waters, fending off sustainability problems and threats to your mission.

So, let’s unpack some practical ways to be more rigorous in your financial oversight…

Reflect the Mission: To do this well requires a thoughtful perspective on your instructional and operational priorities. Each year, the budget should highlight specific investments that are intended to make progress toward the school’s goals and achievement of its mission while sustaining a strong foundation. Given that personnel is likely to be your biggest investment, are proposed annual adjustments in talent aligned to your priorities for the year and the long-term mission? Which schools and grade levels require particular intervention, and how is that reflected in the budget?

Protecting Money Through Controls and Governance: The board, CEO, and CFO are responsible for providing a high-quality education for your students AND ensuring good stewardship of public funds. This includes ensuring financial health and sustainability day-to-day and week-after-week, as well as preventing fraud and misfeasance. So first, we’ll give a reminder you probably don’t need: you must do everything you can to prevent a crisis. Governance, controls, reporting, and compliance build your organization’s foundation for success, and must be a recurring focus. Let’s dig into what that looks like…

First, clearly delineate which aspects of financial reporting are led by senior management and what role the board plays in overseeing the financials of the organization. The roles must evolve as your organization grows, matures, and becomes more complex. Regardless of the approach, your money and resources must be protected, so the finance department will require resources. Additionally, enacting engaged board financial governance is a critical fiscal control and an enabler of sound financial decision making. As a rule of thumb, you’ll want at least three engaged board members who are well versed in financial statements and fiscal planning. The finance committee, made up of staff and board members, should meet monthly or bi-monthly and cover a standing agenda of monthly reports on cash position, budget variance, enrollment, other dashboards, risk management, and seasonally appropriate topics.

Making impactful resource decisions: Can you identify what you need now and later to generate your desired impact? Use your student data to inform prioritization of investments at each of your schools. Balance your instructional priorities with some financial planning, checking your assumptions on operational matters like:

• Expected growth rates in state per pupil funding and/or federal funding shifts.
• Enrollment data by grade-level.
• Wage increases and any changes in the cost of benefits.
• Needs for technology, curricula, professional development, maintenance, transportation, food insurance, audit, and legal expenses.

There’s a reciprocal relationship between focusing on the present and future of your finances: your fiscal health today will determine what you’re capable of tomorrow, and today’s decisions must be based on what you hope to afford in the long-term.

As a general guideline, you should utilize at least 2-3 years of historical trends to build a 3-5 year model that reflects your cash position and conservatively forecasts costs that might arise. With all this in hand, you’ll be prepared to navigate your work of delivering high-quality education with strong fiscal stewardship.

Download Afton’s slide deck on Financial Stewardship