Issue7/April2012 Charter Focus 1
CHAR
TER Issue7/AprIl2012
AnnounCements
2012 Colorado Charter Schools Rally
April 19, 2012 11:30Am-1:00pm locAtion: colorAdo StAte cApitol, WeSt StepS
Information:www.coloradoleague.org/charterweek
Joinhundredsofcharterschoolstudents,parents,teachersandsupportersatthe2012ColoradoCharterschoolsrally.Hearfromstatelegislatorswhosupportchoiceandinnovationineducation,andmakeyourvoiceheardinsupportofequaltreatmentandfundingforcharterschoolstudents.
Chipping for Charters Golf Tournament
September 13, 2012 Golf: 1:30pm | dinner: 6:00pm locAtion: HeritAGe eAGle bend Golf courSe, AurorA
Information:www.coloradoleague.org/golf
proceedswillbenefittheColoradoleagueofCharterschools’advocacyfund,whichhelpsprovideColoradocharterschoolstudentsaccesstoprograms,facilities,andresourcesneededforhigh-qualityeducation.
For a full community calendar of events and professional development opportunities, visit www.coloradoleague.org
FinAnCiAl RepoRting issueThe Financial Reporting Issue . . . . . . . . . . . . 1
The Critical Business Manager/ Board Treasurer Relationship . . . . . . . . . . . . 1
Financial Oversight: Working Well with Your Board . . . . . . . . . . . . 2
The Board’s Role in Financial Stewardship . . . 4
Group Purchasing Program “Cost Savings through Collaboration” . . . . . . 5
Building the Board-Finance Relationship . . . . 6
Preparing Reports for Your Board . . . . . . . . . 8
Colorado League of Charter Schools Vendor Marketplace . . . . . . . . . . . . . . . . . . . 9
Effective Financial Reporting . . . . . . . . . . . . 10
WelcometotheApril2012editionofCharter
Focus, a quarterly journal for charter
school business managers published by
the Colorado league of Charter schools.
Thisquarter,wefeaturearticlesaboutbest
practices in financial reporting, including
building strong business manager/
board treasurer relationships and how to
effectively communicate financial matters
with your school’s board. These articles
werecontributedby thosewhoknow this
topicbest–yourpeersandcolleagues,as
wellasexpertsinthefield.
We think you will find the tips in these
articles extremely valuable and hope you
willkeepthisnewsletterandreferbackto
itthroughouttheschoolyear.
Inaddition,theleaguerecentlypostednew
videosonitswebsitethatfeatureinterviews
with our Group purchasing Vendors. You
canviewtheseshortvideostolearnmore
about theproductsandservicesavailable
to you at discounted, negotiated pricing.
Visitwww.coloradoleague.org/gppvideos.
If you have any comments about Charter
Focus,or ifyou’d like tosubmitanarticle
fora futureedition,pleasecontactTiffany
Kallevik at 303-989-5356, ext. 116 or
the financial reporting issue
With the rise of scrutiny as it pertains to
educational finances, the relationship
between the business manager and
the board treasurer could not be more
imperative.Therelationshipismanifested
by means of transparency laws, school
spending and a higher accountability to
thepublic.
All charter schools are set up differently
andthebusinessmanagerateachschool
holds various levels of responsibility,
accountability, and involvement as it
pertains to financial planning for day to
day activities and long term planning.
However,allshouldbefamiliarwithcertain
financial relationships. let’s review the
duties of a board treasurer, the duties of
abusinessmanagerandthenlookatbest
practicesbetweenthem.
The duties of the board treasurer for a
nonprofit organization are basically the
same across industries. They have many
obligationsthatinclude:oversightoffinancial
transactions, budgets, understanding
volume of debt, and assistance in
developingsystemsforkeepingcashflow
manageable.The treasurer isalsodirectly
involved in developing the annual budget
and watching the comparison of actual
vs.budgetonamonthlybasis.Treasurers
mustalsoassistwithfinancialpoliciesand
auditsandreport totheboard inaneffort
to maintain the school’s financial health.
Althoughfinancialmanagementisprimarily
thefocusofthetreasurer,theentireboard
sharesaccountabilityinthisarea.
Delegationfromtheboardtothetreasurer
and business manager for basic financial
freedom allows the board as a whole to
devote their time to other functions. At
the same time, given this freedom, it is
By DaviDah WalTon anD Kelli anDeRSon
the critical business manager/board treasurer relationship
continued on page 3
2 Charter Focus Issue7/April2012
Forecasting, managing budgets,
compliance, GAAp, knowing your
business, understanding the economy,
forecasting for the future, just to name a
few,areallfunctionscriticaltotheroleofa
financialmanagerandrequireagreatdeal
of research, knowledge, and expertise.
Communicatingthisknowledgesuccinctly
and effectively to others makes a huge
impactonthesuccessoftheorganization.
There are many different stakeholders in
charterschools.Thus,aplethoraof levels
of reportingandrelationshipsare required
forthefinancialmanager.Themostcrucial
is therelationshipwith theschool’sBoard
of Directors. The Board is responsible for
the governance of the school and helps
to or sets the goals and direction for the
school. If the Board does not adequately
understand the structure of the financials
andhowtheyrelatetomeetingtheschool’s
goals,theycannoteffectivelygovern,make
well-informeddecisions,or, inworse-case
scenarios, ensure protection from internal
fraudandfinancialmishap.
1. Knowing the Board:
Most boards are made up of people with
a wide array of gifts and talents. some
can and like to sit through 30 minutes of
looking at minute financial detail, and
others can take only about 3 minutes of
financial discussion before they are ready
for the next agenda item. providing the
right balance to address each member’s
level while still ensuring they know what
theyneedtoknowisessential.
2. targeted education:
scheduletimetoeducatetheBoardonthe
basicworkingsof theschool’s fundsand
financialstructuremakingsure to include
thefollowing:
• pointoutthebasicfunctionofeachfundanditsrelativeimportance
• explainthenatureofabalancesheetvs.anincomestatement
• Definewhatabudgetvariancemeansandhowitwillbeportrayedonreports
• reviewthebeginningandendingfundbalanceconceptexplainingthedifferencebetweenTABOr,restricted,andunrestrictedreserves
• explainhowabalancesheetmustalwaysbalanceandwhereonthereporttoverify
• pointouthowtheincomestatementflowstothebalancesheetandwheretheycanlookonthereportstomakesureitflowsaccurately
• explainthenatureandrestrictionsonpupilactivityfunds
provide more specific training to key
memberstoincludesubjectssuchas:
• Fundamentalworkingsandimpactsofspecialeducation,Title,andothergrantrevenuesandexpenditures
• Theaccountingrelationshipbetweenbuildingcorporationsandthegeneralfund
• Thelegislativeprocessandtimingofeducationfunding
• Theformulaprocessforppr,At-riskadjustments,andTitlefunding
• Anexplanationoftheschool’soutstandingdebt
• reviewoftheannualauditandwhatdiffersbetweentheauditandthefinancialreports
• Howtomakesuretheboard-approvedbudgetisrepresentedaccuratelyonthefinancialreports
3. Reports to the Board:
Therearemanydifferent formats thatcan
be used in reporting to the board. At the
minimum, the Board should receive a
balance sheet and an income statement
everymonth.Theincomestatementshould
include what has been spent to date;
the budget; and what is remaining in the
budget.Askthememberswhattheywould
liketoseeatthemeetings.Theymayaccept
onlysummaryinformationpresentedatthe
monthly meetings and detailed reports
e-mailedfortheirreviewatalatertime.
Other reports that may be helpful are
summaries and graphs that illustrate the
amountoffundsspentindifferentcategories.
Apiechartshowingthepercentagespent
on instruction, administration, student
support,staffdevelopment,transportation,
etc.canbeveryhelpfulinaligningfundsto
schoolgoals.
4. Discerning What to Highlight:
Discerning what information to provide
andwhentoprovideitisimportanttothe
health and well-being of the school. Too
much information can quickly overwhelm
an audience causing them to lose focus
and miss items of importance. providing
information on far-off potential threats
in a public forum can cause panic and
rumorthatwillquicklyspreadandprovide
unnecessary distractions for staff and
students.
Ifanissuearisesregardingtimelyfunding
from an agency or authorizer, it may be
prudent to follow all due diligence to
correctitbeforealarmingboardmembers.
The economy still remains in a lull and
therearealwaysrumorsofnewimpending
cuts.untilitistimetodevelopthebudget,
it may be wise to leave this discussion
untilthetimeiscloserandissuesbecome
moresolidified.Beproactivewithlooming
capital needs, and changes in current
revenue forecasts as soon as possible.
TheBoardshouldalwaysbekeptinformed
of current issues, allowing them time to
divert funds if necessary and still make
debtandreservecommitments.Alwaysbe
transparentwithknownissues.
Beforedeterminingwhat issues toshare,
thinkaboutwhattheresponseoftheBoard
members might be and what additional
questions or reactions they might elicit.
Thendetermine if it is the right timeora
worthwhileissuetodiscuss.
Carol Meininger is the Chief Financial Officer at The Pinnacle Charter School, a K-12 charter school in Federal Heights (www.pinnaclecsi.org).
By CaRol MeininGeR
financial oversight: Working Well with Your board
If the Board does not adequately understand the structure of the financials
and how they relate to meeting the school’s goals,
they cannot effectively govern.
Issue7/April2012 Charter Focus 3
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especiallyimportantandinthebestinterest
andprotectionofthebusinessmanager,to
haveacloseworkingrelationshipwiththe
treasurer.AtrockyMountainAcademyof
evergreen, the treasurerand thebusiness
manager meet at least once a month.
They review the month to month budget
anddiscussissuesorconcernsthateither
person has concerning the financial state
oftheschool.Whenreviewingthebudget,
theylookatincomeandexpensevariances
(someschoolsuse ratiosorpercentages).
Any drastic changes raise a red flag. For
instance, last year the school’s monthly
waterbillincreasedby$500fortwomonths
inarow.Thisredflagalertedthebusiness
managertocontactthefacilitiescommittee
about a possible plumbing issue. The
resultwasa$10,000plumbing repair that
had it not been corrected, would have
causeda$40,000billfromthecitytocover
an additional water tap. Instead, usage
wasreturnedtoitsnormallevel.
Duringboardmeetings, thetreasurerand
business manager work as a team to
presentinformationandcometomeetings
as a common front. For example, when
theboardoranothercommitteewantsto
allocatemoneythatisnotinthebudget,the
treasurer canbeanadvocate forplacing
theitemonholdforthefollowingyearand
explaininghowanextraexpenditureatthis
time directly affects the current budget.
This allows the business manager not to
beseenastheonlyentitywithcontrolover
financesandspending.
AtrockyMountainAcademyofevergreen,
although the business manager arranges
and leads the finance committee, the
board treasurer is very involved with all
aspects.Thefinancecommitteeconsistsof
parents,teachersandcommunity leaders
assistingandgivingguidanceintheareaof
schoolfinanceandthehealthinessof the
current and future budget. The business
manager and treasurer regularly attend
CDe(ColoradoDepartmentofeducation)
seminars, most recently the CDe Annual
CharterschoolFinanceseminar.
Continuingeducationforatreasurer (even
more so for a new treasurer) is extremely
valuable. learning charter school finance
lawsandfederalguidelinesisachallenge.
CsI (Charter school Institute), CDe
(Colorado Department of education) and
the Colorado league of Charter schools
offer conferences, online information and
webinars. CsI offers information online
for start-up charters, how charters are
funded and how capital needs are met.
CDe workshops and online information
coversschoolfinance,anoverviewof the
CDebudgetandannualfinancialreporting
requirements.ColoradoleagueofCharter
schools offers webinars for new school
budgeting and professional development
conferencesforcharterschoolgovernance.
New schools should also be sure their
financial policies are clear, decisive and
reviewedeveryfiveyearsorinconjunction
withcharterschoolrenewal.
Therelationshipbetweenthetreasurerand
businessmanager isextremely important
forthefinancialhealthoftheschool.They
bothneedtobeinformedaboutthecurrent
trends of the economic environment,
as well as be involved with the strategic
planning of the school. Working together
they will be able to make decisions and
recommendationstotheboardinthebest
interestoftheschool.
Davidah Walton is the Business Manager and Kelli Anderson is the Board Treasurer at Rocky Mountain Academy of Evergreen, a K-8 charter school in Evergreen (www.rmae.org).
Continuing education for a treasurer is
extremely valuable.
By DaviDah WalTon anD Kelli anDeRSon
the critical business manager/board treasurer relationship
4 Charter Focus Issue7/April2012
every board member must have basic
understanding of your charter school’s
finances, including how to read monthly
reports,howtoevaluateaproposedbudget,
andyourschool’sreportingrequirements.
ReVieWing montHlY FinAnCiAl RepoRts
The board should ensure that all
documents required by board policy are
beingpresentedaccordingtopolicy.Ata
minimum,thisshouldincludeabudgetvs.
actual,whichissometimescalledaprofit
and lossstatementor incomestatement,
andabalancesheet.NowthattheFinancial
TransparencyActrequiresschoolstopost
checkregistersandcreditcardstatements
on their websites, these should also be
reviewedbyboardmembers.
Balance sheet
• reviewtotalamountofmoneyinbankaccounts.Doesitseemadequatetocoverexpensesuntilthenextperpupilrevenuepaymentisreceived?understandaveragemonthlydisbursements,especiallylargeitemsandmakesurethereisenoughmoneyinthebankforsufficientcashflow.
• reviewaccountsreceivable.Thisshouldn’tbeahighamount,especiallyforaschool.Makesureyougenerallyunderstandwhatopenreceivablestheschoolhas.Istheadministrationreasonablyassuredofcollectingonallreceivablesbyyear-end?
• reviewassetsandmakesuretheschool’sassetsappearhere(e.g.leasedeposits,capitalizedfurniture/equipment).Theassetsshouldn’tchangemuchthroughouttheyear.
• reviewliabilityaccounts,particularlyanypayables.lookforanylargeamountsorsignificantchanges.
profit and loss statement for Budget vs. Actual
• ensurethattheprofitandlossstatementisbeingpresentedasabudgetvs.actualreport.
• reviewallmajorincomecategoriesandcomparewithbudgetedamounts.Arethereanysignificantshortfalls?Ifso,howistheadministrationpreparingtohandlethat?
• reviewallmajorexpensecategories
andcomparewithbudgetedamounts.Inareaswheretheschoolisoverbudget,besureyouunderstandwhytheschoolisspendingmorethananticipated.
• Makesuretheadministrationhasawayoftrackingandaccountingforsignificantbudgetdeviationstoensurethattheschoolwillendtheyearwithabalancedbudget.Thisdocumentshouldbesharedwiththeboard.
• Determinewhethertheschool’stotalexpenseswillexceedbudgetedexpenses.Ifthisisthecase,determinewhenarevisedbudgetwillbepresentedandapprovedbytheboard.
• requestreportsonrestrictedfundstoensurethatspendingrestrictionsarebeingmetandthatrequiredspendingwillbecompletedbyyear-end.
BuDgeting
Aschooltypicallybeginsbudgetinginthe
latewinterorearlyspring for thecoming
school year. The budget development
process should be driven primarily by
the school’s administration with input
and review by the board. The board is
ultimatelyresponsibleforensuringthatthe
budget is realistic and that it reflects the
school’s mission and priorities, and then
approvingit.
• Whenreviewingaproposedbudget,compareprojectedincomeandexpenseswithhistoricalfinancialdata.Dotheprojectionsreflecttherealityofthecurrentyear’sincomeandexpenses?Itishelpfultohavetheadministrationcreateaspreadsheetinwhichthreeyearsofdataarecomparedside-by-side(thepreviousfiscalyear,whichshouldalreadybeaudited;thecurrentfiscalyear,whichwouldbeyear-endprojections;andtheproposedbudget).Anysignificantincreasesordecreasesshouldbeunderstoodbyboardmembers.
• Theboardshouldhaveamechanisminplaceforensuringthatboardpriorities,strategicplanninggoalsforthecomingyear,unifiedImprovementplan(uIp)strategies,etc.aresupportedfinanciallyinthebudget.
• ensurethattheproposedbudgetincludesacontingencyfundincaseofunder-enrollment,otherrevenueshortfall,orunexpectedexpenses.
• Forlong-termplanning,ensurethatanyboard-dictatedyear-endreservegoalswillbemetwiththeproposedbudget.
• Ifthebudgetincludesanyvariableincome(e.g.grantsnotyetreceived,donations,capitalconstruction,etc.),makesuretheboardunderstandswhatcutswillbemadeintheeventthattheschooldoesnotreceivetheserevenues.
• Ifcashflowwillbetight,theboardshouldalsoreviewacashflowprojectionfortheyeartoensurethattherewon’tbeanyproblemspayingbillsorrunningpayrolleachmonth.
FinAnCiAl RepoRting
Becausetheboardispartytothecharter
school’scontractwith theauthorizer, it is
importantthatitunderstandstheschool’s
reporting requirements to the authorizer.
While the reports will likely be submitted
by theschool’sadministration, theboard
shouldreviewthereportsandensurethey
are submitted in a timely manner. The
board should understand its contractual
obligations as they pertain to financial
reporting.
Theotherimportantreportingrequirement
that charter school boards now face
is the requirements of the Financial
Transparency Act (C.r.s. § 22-44-301 et
seq).Tobeincompliancewiththisstatute,
yourboardisobligatedtoensurethatthe
following documents are posted on your
school’s website: annual budget, audited
financial statements, quarterly financial
reports, salary schedule or salary policy,
check register, credit card statements,
and,effectiveJuly1,2012,areportonthe
performanceoftheschool’sinvestments.
While financial oversight requires
considerable work, it is one of the
charter school board’s most important
responsibilities.Asthebodythatoversees
theuseofmillionsofpublicdollars,board
members cannot rely solely on the one
“financial expert” on the board; all are
obligated to educate themselves enough
to ask questions and ensure that the
schoolisfinanciallysound.
Jennifer Douglas is the Director of New School Development at the Colorado League of Charter Schools.
By JenniFeR DouGlaS
the board’s role in financial Stewardship
Issue7/April2012 Charter Focus 5
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6 Charter Focus Issue7/April2012
Of all the resources and technical
assistance available to charter schools
in need of help with financial oversight,
there is little that addresses the unique
challengespresentedby theexistenceof
avolunteergoverningboard.
Business managers have a wide range
of resources when seeking “how to”
informationforfinancialmanagementata
charterschool.Whatisn’treadilyavailable
isatoolkitfordevelopingandmaintaining
a strong working relationship with the
charterschoolgoverningboard.
Moreoftenthannot,charterschoolboard
members don’t have direct experience
withschoolfinance,thechartofaccounts,
public finance rules, education budget
restraints, etc. Occasionally, one or two
board members may have a particular
interest in the financial matters of the
school,andmayevenbequiteskilledwith
atenkeycalculator.
Thesebusiness-mindedprofessionalscan
beablessingoraburdenonanycharter
school governing board. Truth be told,
whether the board has little expertise
in finance or the board is a collection of
savvy entrepreneurs, challenges in the
relationshiparelikely.Tomitigateconflict,
business managers should invest in their
relationshipswiththeirboards,turnexisting
board skill-sets into an asset, and follow
up with sound structure and practices.
Consider the following behaviors as an
investmentintherelationship.
Be a relentless steward of the relationship
establishnormsthatdefinetherelationship
with respect to roles and responsibilities,
communication,transparency,andtraining.
each party must know the boundaries
of their role so as not to overstep lines
of authority, which is when most conflict
occurs. When defining the roles and
responsibilities, use a table or a chart to
discuss and document the expectations
for the business manager, the full board,
the board treasurer, and the finance
subcommittee.Foreachtask,frombudget
formationtoaudit,documenttheroleeach
partyplays.Gobeyond theorganizational
chart or diagram, and be explicit about
duties, clarifying accountability for each
individualandgroup.establishaprocessto
addressconflict,andbepreparedtosolicit
the help of consultants when relationship
tensionhaltsprogress.
As with all functional collaboration, the
relationshipwiththeboardwilltakework.
Be vigilant. Commit to clear and regular
communication, and expect it in return.
establish norms that are reasonable and
appropriate,andthatservetoimprovethe
financial health of the school. Financial
transparency laws exist to provide the
publicwith a clearpictureofpublic fund
distribution and use. Transparency will
also serve the board/business manager
relationship by providing an opportunity
to address areas of weakness before
problemsarise.
relationship norms should also
address training expectations for
ongoing improvement. participate in the
development of the collective knowledge
by seeking relevant high quality training,
andbyprovidingtrainingtotheboard.The
plan for continuous improvement should
include regularly scheduled presentations
to the board by the business manager
to review budget basics, understanding
reports,andthekeyindicatorsoffinancial
health. Work with the board to establish
these norms for continuous improvement
andbeprofessionallyavailable toprovide
expertise.Insodoing,theboard/business
manager relationship will be further
solidifiedandcodified.
Be a predictable and concise resource for decision-making
The board’s primary role is to review,
discuss, approve, and make decisions
basedontheschoolbudgetandavailable
funding. effective financial reporting is,
therefore, a path to strong decision-
makingpractices.Considerwhattheboard
willneedandwanttoknowinordertodo
theirjobswell.everycharterschoolhasa
unique collection of reports and budget-
to-actual comparisons. Whatever the
format, become predictable by providing
standardizedreports,andschedulingtime
to educate board members about the
content of those reports. Be proactive.
remember that theboardmaynot know
what to ask for, so make an effort to
understandtheissuesathandandprovide
the board with pertinent and relevant
data. provide concise information with
appropriate detail and be prepared to
answerquestions.
When allocation changes are required or
whenbudgetcutsareimminent,consider
thecontentthatwillguidegooddecision-
making.show ties to theschool’svision,
mission,andgoals.provideacost/benefit
analysiswherepossible.Indicatethelevel
of sustainability when embarking on new
projects,anddemonstratehowresources
areleveragedformaximumimpact.
The business manager is pivotal to the
board’s ability to set a sound course for
the school. The business manager must
beanexperton the topicof theschool’s
finances and should be seen by the
board as a resource for information and
guidance. provide your expertise and
By Jen DauzvaRDiS
building the board-finance relationship
do’S
3Documentrolesandresponsibilities
3Committoclearcommunication
3participateincontinuousimprovement
3provideyourexpertise
3Beapartofthesolution
3Askhowyoucanhelp
The business manager must be an expert on
the topic of the school’s finances and should be seen by the board as a resource for information
and guidance.
Issue7/April2012 Charter Focus 7
explain your thinking or process. Help
the board to identify the key indicators
(measures, metrics, and targets) of
financial stability, progress, and success,
andwhentheboardisfacedwithacritical
decision,outline thefinancial impacts for
eachoption.
Be an engaging ally
Formostboardmembers,schoolfinanceis
intimidatingandoverwhelming.Challenge
yourself to provide informative and
interesting information.Highlightareasof
accomplishment and areas of concern,
and look to the board for joint decision-
making.unite the intentionsof theboard
with the challenges of a tight budget,
and be a part of the solution. The more
interesting the reportsandpresentations,
the more engaged board members will
become.
practice tolerance and understanding. At
the other end of the spectrum, there are
board members who may be enthralled
with the school budget, reporting
processes,andfinancialpolicies.Aboard
memberwhoshowsupoutsideyouroffice
doorwithalistofcreativesolutions,thrives
onlineitembudgetdetails,draftsfinancial
policy,andenthusiastically volunteers for
thepositionoftreasurer,isnotnecessarily
a bad thing. Consider the benefits of
makingthisboardmemberanally.provide
opportunity forappropriate input into the
process, and use norms and boundaries
asguidelines.
Be an inquisitive catalyst for improvement
Business managers have the right and
responsibilitytoaskquestionsoftheboard
in order to ensure a job well-done. As a
catalyst for improvement, the business
manager must be a strong advocate for
thefinancialhealthoftheinstitution.Being
inquisitive and asking questions will help
foster an environment of understanding.
While it is appropriate for the business
manager to have strong opinions about
the path to improving the school, the
board carries ultimate responsibility for
the financial and academic success of
the school. Therewill be instanceswhen
the board takes action that is contrary
to recommendations. Don’t allow
divergent thinking to inhibit professional
conduct. Instead, ask questions to
clarify accountability, to set realistic
expectations,andtoestablishboundaries
forperformance.
Theboardshouldprovideshortand long
term financial goals, and should adopt
sound financial policy to support those
goals. When goals are unrealistic or ill-
defined,askforadditionalinformationand
support.Beinginquisitivewilllendclarityto
theintentionandwilllowerthedividewhen
there isambiguity.Askforclearreporting
expectations,askforparticipationfromthe
board, ask for clear communication, and
askforfeedback.seektounderstandyour
degree of autonomy in decision-making,
and,aboveall,askhowyoucanhelp.
Working well with the charter school
governing board is a necessary skill and
an essential duty. The business manager
is a pivotal player in the board’s ability
to lead theschoolandchartafinancially
viablecourseforsuccess.
Jen Dauzvardis is the Program Coordinator at The Center for Professional Development at Peak to Peak Charter School (www.cpdcolorado.org).
dont’S
3stopworkingontherelationship
3Overstepdefinedlinesofauthority
3Overwhelmwithdetail
3Waitforquestionswhenyoucanpredictwhattheymaybe
3Dismissgoodintentions
3Allowdivergentthinkingtoinhibitprofessionalconduct
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continued from page 6
8 Charter Focus Issue7/April2012
Asyourplateoverflowswiththeconstant
to-do’s of running the operations of a
charter school, there’s one essential
responsibility that tops the list –financial
reporting for your Board of Directors.
While it can often feel burdensome and
time consuming, keep in mind that you
are the link responsible for educating
and informing those who are fiscally
responsible for the school. Oh, the
pressure! Not to worry, there are some
strategies that can help minimize the
reportpreparationanxiety.
1 Keep reporting formats simple
remember that Board members bring
different skill sets to the table so their
comfort levelswillvarywhen itcomes to
understanding financial reports. I provide
tworeportstotheBoardeachmonth.The
firstreportisaone-pagebudgetvs.actual
dashboard (dashboard=the new buzz
word) and the second is the supporting,
detailedversion.Thedashboard includes
high-level revenue categories of state
revenue, Federal revenue, Fundraising,
andstudentActivitiesinadditiontohigh-
level expense categories of salaries &
Benefits, purchased services, Facility
Costs,Books,supplies,&equipment,and
Other.BasedonBoardmemberfeedback,
providing the two options satisfies both
thenoviceandthe“numbercrunchers.”
2 provide specific notes on financial reports
The purpose of footnoting the financials
is to minimize the number of questions
asked during a meeting. I find that if I
make notes to explain why specific lines
may be off target, Board members have
a better understanding of revenue &
expense patterns and don’t tend to over
analyze the information. examples of
notesinclude,“Districtpaymentschedule
of 25% YTD” for ppr or “front loaded
spending”forbooks/supplies.Also,don’t
forget to include a benchmark for the %
analysis (i.e. October = 4 months into
the fiscal year (33%)). When it comes to
footnoting and financial reports, there is
nosuchthingastoomuchinformation!
3 separate your compliance reports from your managerial reports
Board members are not concerned with
22-string state accounting codes nor
should they be. The format that your
authorizer requires may not be practical
for Board members to comprehend or
analyze. Instead, it may prompt more
questions about the codes being used
insteadof thefinancial information. Inan
effort to not be redundant, go back to
strategy#1.
4 spend more time analyzing your financial reports than preparing them
If you are responsible for preparing
financialreportsandarenotaspreadsheet
whiz,quicklysignupforthenearestexcel
class. setting up a detailed reporting
template that includes columns for the
annualbudget,YTDactuals,variance,and
“%ofbudget,”andthenlinkingthosetoa
summarizeddashboardpagewillminimize
your processes each round. It simply
requires exporting a profit & loss from
your accounting software and copying/
pasting YTD numbers in the actual
column. After updating the benchmark
and reporting month, your Board reports
shouldbecomplete.Youcanthenspend
moretimeanalyzingnumbersandmaking
notesonindividuallinesasyoupreparefor
theupcomingmeeting.
5 train Board members annually
It’s helpful to provide a training session
at the beginning of each school year to
educate the Board members on charter
school financing and on the reporting
formats they will see each meeting.
A 20-30 minute presentation is a
worthwhile investment that can help set
a precedent for the school year. As part
of the presentation, I suggest providing
a supporting list of accounts that makes
up the one page dashboard and that
essentiallylinksthetworeportingformats.
Moving forward, the members can
reference that document when analyzing
the reports. This training accomplishes
twogoals:(1)-ithelpstoeducatethenew
Board members and (2)-it provides an
annualrefreshercourseforthosewhoare
notascomfortableanalyzingthenumbers.
Irecommendyoufindaformatthatworks
well for you and that minimizes your
preparation time. It’s important to get
feedback from your Board members on
whatworksordoesn’twork,butbecareful
that youdon’t getburdenedwith several
formats to satisfy individual requests. At
a timewhenschoolsarestretchingevery
dollar,remindthosemembersthatweare
all working hard to keep funding in the
classrooms by minimizing administrative
processes. That just might be the
argument needed to help support your
reportingformatsevenmore!
Lori Deacon is a Consultant/Owner of Abstract Insights, Inc. (www.ineedai.com).
By loRi DeaCon
preparing reports for Your board
Issue7/April2012 Charter Focus 9
ACCounting / mAnAgement Consulting
Charter school management Corporation, inc. (CsmC) dhering@csmci .com(719) 429-7665www .csmci .com
Assessment / CompliAnCe / sis
Wireless generationsjgansmann@wgen .net(303) 870-7078www .wirelessgeneration .com
College touRs & eDuCAtionAl tRAVel
All Aboard tours and travelwweinzoff@allaboardtours .com(800) 896-0046www .allaboardtours .com
eF educational toursJustin .kryszan@ef .com(303) 214-8250www .ef .com
CuRRiCulum / textBooKs / supplementAls
BossReaderschris@bossreaders .com(720) 295-7323www .bossreaders .com
CharacterFirstkfahrenbruck@characterfirst .com(877) 357-0001www .characterfirst .com
learning Allysjonsen@learningally .org(303) 906-6061www .learningally .org
math in Focus: singapore mathjill .weber@hmhpub .com(303) 946-8465www .hmheducation .com/mi/sdg-singapore-marth .php
sportxcelcgreif@sportxcel .com (720)437-0316sportxcel .org
equipment AnD FuRnisHings
Creative learning systemsjtimmons@creativelearningsystems .com(303) 772-6400creativelearningsystems .com
tandus Flooring (formerly Collins and Aikman) jkimble@tandus .com(303) 741-0051www .tandus .com
FACilities
Architectural innovations, llCkmiller@arch-innov .com(719) 260-9990www .arch-innov .com
Consilium partners, llCjbills@consiliumpartnersllc .com(720) 201-6373www .consiliumpartnersllc .com
Design Conceptsshanen@dcla .net(303) 664-5301dcla .net
eagle Creek modular solutionseaglecreekmod@gmail .com(303) 987-0700www .eaglecreekmodular .com
Haselden Construction, llCdalefurnell@haselden .com(720) 810-6805www .haselden .com
Haynes mechanical systemssclough@haynesmechsys .com(303)779-0781www .haynesmechsys .com
Hutton Architecture studio p.C.phutton@huttonarch .com(303) 861-1600www .huttonarch .com
JHl Constructors, inc.mbodah@jhlconstructors .com(303) 741-6116www .jhlconstructors .com
nAC Architecturendohrn@nacarchitecture .com(303) 837-8811www .nacarchitecture .com
Roche Constructors, inc.crust@rocheconstructors .com(970) 356-3611www .rocheconstructors .com
satellite sheltersjamiec@satelliteco .com(303) 288-7111www .satelliteco .com
servicemaster Cleanjoes@cleanmyfacility .com(303) 761-0122www .cleanmyfacility .com
siemens industrytravis .fletcher@siemens .com(303) 568-7305www .buildingtechnologies .siemens .com
slAteRpAull Architectsawillson@slaterpaull .com(303)607-0977www .slaterpaull .com
Zieglermomeara@ziegler .com(303) 794-6045www .ziegler .com
FACilities FoR sAle oR leAse
education Facility solutionsdjones@efsk12 .com(720) 897-6607www .efsk12 .com
education site selectionmarshall .savage@na .ugllimited .com(720) 971-9000www .ugl-equis .com
FinAnCiAl mAnAgement & inVestment
ColotRustbruce .ely@mbia .com(303) 864-7474www .colotrust .com
CsAFebob@csafe .org(303) 296-6340www .csafe .org
Heartland institute of Financial education (HiFe)natalie .neaton@hife-usa .org(303) 547-6604www .heartlandfinancialeducation .org
FooD & nutRition seRViCes
CharterCHoiCelfriedman@coloradoleague .org(303) 953-4170
michael’s of Denvermsudak@hotlunchonline .com(303) 778-0916www .denverschoollunch .com
FunDRAising AnD gRAnt Consulting
Right Responserana .squires@gmail .com(512) 368-3848www .rightresponse .com
insuRAnCe
HuB international insuranceGary .clark@hubinternational .com(303) 893-0300www .hubinternational .com
mARKeting & Design seRViCes
Fiest Designkirk@fiestdesign .com(303) 250-6336www .fiestdesign .com
Clay pot Creativekurt@claypotcreative .com(970) 495-6855www .claypotcreative .com
pRoFessionAl DeVelopment
Colorado Christian university: Alternative licensure programbbwhite@ccu .edu(303) 963-3120www .ccu .edu
educators for social Responsibilitydwolk@esrnational .org(617) 492-1764www .esrnational .org
professional Association of Colorado educators (pACe)mleatham@coloradoteachers .org(720) 895-1980www .coloradoteachers .org
teacher institute at la Academiarebekah@teachandlead .org(303) 455-1444www .teachandlead .org
thinking mapsjherm@actmindful .com(303) 881-2018www .actmindful .com
speCiAl eD seRViCes
therapy source, inc.davidr@txsource .net(866)783-5301www .txsource .net
teCHnologY
the Funded Consulting groupJohn .egan@getfunded .net(480) 473-5785www .getfunded .net
logical Choice technologiesmike .hare@logicalchoice .com(720)261-3330www .logicalchoice .com
mobile Citizencustomerservice@mobilecitizen .org(303) 477-6278www .mobilecitizen .org
sprintmichelle .wright@sprint .com(303) 520-0086www .sprint .com
synergy telecommunications, inc.kimb@synergytelecom .net(303)339-8536www .synergytelecom .net/
system Communicationssteve@systemcommunications .com(303) 688-6191www .systemcommunications .com
tutoRing/mAtH impRoVement
After school universitymzrust@afterschooluniversity .com(719) 648-6673www .afterschooluniversity .com
ColoRADo leAgue oF CHARteR sCHools VenDoR mARKetplACe
ThisdirectoryisnotanendorsementbytheColoradoleagueofCharterschoolsofanyparticularvendor,butratheraneasilyaccessible
sourceof vendorswhosupportColoradocharter schools andwant tohelp themsucceed.Weencourage you to support all of our
participatingvendorsasyousearchforproductsandservices.Inchoosinganyvendor,theleaguerecommendsthatschoolsreferto
applicablepoliciesoncompetitivebidding,checkreferences,andcontacttheleagueifadditionalinformationisneeded.ViewtheVendor
Marketplaceonlineatwww.coloradoleague.org.
10 Charter Focus Issue7/April2012
effective financial reporting can make – or break – a charter school’s operation.Are you taking the right steps?
Asconsultantstocharterschoolgoverning
boards,wehaveenduredmanyponderous
or even grueling financial presentations.
Too often, such presentations are “text-
generators”; the deadening summaries
illustratedbycrypticchartsthatsoonhave
everyspectator(andsomeboardmembers)
distracting themselves by texting or
checking social media. Yet, especially in
today’s recessionary environment, crisp
and informative financial reports are
criticaltotheeffectivenessoftheschool’s
operation.
How often should a financial report be
presented toa school’sboard?Andhow
much information should it contain? Too
often, we err on the side of limiting the
reports in terms of both frequency and
scope. Not surprisingly, these are the
two issues that tend topresent themost
problemsbetweentheseniorstaffandthe
board.
WhatcanabusinessmanagerorCFOdo
to avoid offering overwhelming financial
informationdumpswhileatthesametime
delivering the critical financial data that
will offer the board a way to effectively
stewardtheschool’sresources?
Needless to say, drawing up financial
reportsonaregularbasisisthefirststep
toward healthy reporting, which results
in a well-run association and solid trust
betweentheBoardandtheadministration.
someeffectiveboardsuseadashboardof
data indicators, including financial data
points, inordertogetasnapshotofhow
welltheschoolisdoing.regardlessofthe
format,itiscrucialthatbothgroupsagree
on the frequency of the reporting and
understand the merits of the system. In
otherwords,theyneedtobeonthesame
pagewhenmoneymattersareatstake.
We have seen business managers bristle
at requests by board treasurers for
monthly updates. Denise Mund, while
leading the schools of Choice unit at
CDerecalls receivingcalls frombusiness
managerswantingtoverifythattheydidn’t
“have to”supply reportsmoreoften than
required under law. The idea that routine
updatesareunnecessarymissesthepoint
altogether. No matter what reason you
mayhave for resistingmonthly reporting,
the fact is that such resistance will be
interpreted as though administration is
hidingsomethingfromtheboard.Instead,
thisshouldbeviewedasanopportunityto
educateandtopersuade.
For some schools, this may mean
reportingateachboardmeeting,forothers
quarterlyupdatessuffice.Ifreportingless
frequently, a board may insist on earlier
reportsrelatedtoeventssuchasOctober
count or other matters that change the
numbers. If not, you should nonetheless
take the initiative to communicate major
changes to them. Don’t wait until March
totelltheboardifyourprojectionsarethat
the school needs to eliminate tutors to
makeitthroughtheyear.
Keep tHe sCHeDule
Onceanappropriateandregularreporting
schedule has been decided upon, it
is your job to keep it. While this may
seem obvious, it is surprising how many
schools are behind in reporting to their
board, and too often, to their authorizer.
Then,inahurrytocatchup,theyrunthe
risk of providing inaccurate information,
which results in all sorts of problems. In
our experience working with boards, the
unfortunateby-productofthisscenariois
anerosionoftrustbetweentheboardand
administration.
useR-FRienDlY RepoRts
Whileitiscrucialtoincludekeyinformation
inthefinancialreports,itisequallyimportant
toavoid listingall theminordetails.Your
board may be comprised entirely of
sophisticated financial professionals. But
that would be unusual. Assuming your
board is made up of people with a wide
spectrum of gifts and backgrounds, you
will want to prepare reports with simple
visuals, strategically highlighted points,
andconcisesummaries.piechartstrump
Effective financial reporting can make – or break – a charter school’s operation.
Are you taking the right steps?
By Dave MaRTin, BRaD MilleR anD DeniSe MunD
effective financial reporting
Issue7/April2012 Charter Focus 11
School accounting categories can appear daunting to boards and patrons. Do your best to clearly identify the
different subject areas in a straightforward manner.
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spreadsheetswhenpresentingverballyto
agroup.Toooften,businessmanagersor
CFOs view their role as providing highly
detailed reports. Feel free to offer such
reports to the board treasurer in writing,
butwork tobesuccinctwhenpresenting
ataboardmeeting.
It is precisely this type of exhaustive,
comprehensive information that can
actuallyderailthingsandjeopardizegood
governance.The‘details’canleadaBoard
tobecomemore involvedthantheyneed
tobe.providing toomuchgranulardetail
isadirectinvitationtomicro-management.
AllyouwanttodoisensurethattheBoard
gets enough information to see if there
are trends and areas of concern. Our
experienceatCssisthatifyouprovidea
financialstatementthatishighlydetailed,
the Board generally will not have the
disciplinetokeepadistance.
Offer a self-serving report that leads the
board to inquire about the items that
warrant their involvement and decisions.
At the same time, don’t gloss over the
areasofknownconcernasitwillgenerate
an aura of distrust. It all comes down to
a fine balance, and this balance is not
constantfromboardtoboard.Itdepends
onanindividualschool’sgovernancestyle.
stRAigHt tAlK
schoolaccountingcategoriescanappear
daunting toboardsandpatrons.Doyour
besttoclearlyidentifythedifferentsubject
areas in a straightforward manner. You
will avoid all sorts of problems if you
take the time to re-cast thecategories in
terms that make sense rather than using
cryptic language or finance terms. The
report should be so straightforward that
theBoarddoesn’thavetoaskallsortsof
questions.
It’s helpful to begin the new school year
with a Board workshop on financial
matters,presentedbytheBoardTreasurer
and CFO. This should cover state public
education funding, typical expenses for
thecharterschoolandthevaluesforhow
financialdecisionsaremade.
Financial statements should correlate
the expenses against the revenue, and
show all the necessary comparisons, in
particular how everything is performing
against the budget, the current year-to-
date,thelastyear-to-date,andtheoverall
budgetforecast.
Whatismostimportantistoprovidecontext
for Board members so that everything is
understandable at first glance. If you are
rightonbudgettargets,youprobablydon’t
needdetailedinformation.Butifyou’reoff
target,youneedtoexplainwhy.
It is this typeofskillfulfinancial reporting
that results in effective communication
between the administration and the
Board. When the information is timely,
accurate and filled with relevant - and
straightforward-content,youwilldevelop
a partnership of trust with your board.
It is a constant commitment. until you
are able to constantly and consistently
provideyourboardwiththetoolsitneeds
togovern,youwilljustkeeprunningfrom
onecrisistothenext.
Dave Martin, Brad Miller and Denise Mund are consultants for Charter School Solutions, LLC (www.charterschoolsolutions.org).
continued from page 10
725southBroadway,suite7Denver,CO80209
ColoRADo leAgue oF CHARteR sCHools
725 S. broAdWAY, Suite 7 denVer co 80209
pHone 303-989-5356 fAx 303-984-9345 emAil [email protected]
WWW.colorAdoleAGue.orG
marco rafanelli, director of member business Services
tiffany Kallevik, Assistant director of member business Services
Charter Focus advisory CommitteeThankyoutothefollowingindividualsfordonatingtheirtimeandexpertise.
•DianeBorre,TheVanguardschool
•Dansherrill,CaprockAcademy
•DinaWalton,rockyMountainAcademyofevergreen
advertise in Charter FocusputyourbusinessinfrontofdecisionmakersatColoradocharterschoolsbyadvertisinginCharter Focus!ContactTiffanyKallevikattkallevik@coloradoleague.orgforratesanddeadlines.
Charter Focus archiveVisitwww.coloradoleague.org/newsletterstoaccessarchivedissuesofCharter Focus.
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