Week 5, Part 3: Final Reflection and Lessons Learned

Throughout this course I have been continuously assessing and reflecting on my knowledge in Competency 8, in regards to being able to apply principles of effective leadership and management in relation to district budgeting, personnel, resource utilization, financial management, and technology application. The knowledge that I have received in this course is invaluable to my growth as a current campus and future district leader. This growth is demonstrated when reviewing how I scored my self-assessment from the first week, and how it has changed after completing it during the fifth week of this course. At the beginning of this course, when completing my self-assessment, I scored myself mostly in need of improvement in all but a few areas. This was due to my lack of experience in school leadership and therefore a lack of exposure to district finance, budgeting, and fiscal responsibilities. While I feel that I have grown exponentially in my knowledge in relation to Competency 8, I believe I can score myself no higher than “Competent” in these knowledge and skills. I believe this to be true because this is only my second year as a campus administrator, and I fully believe in order to rate any of these knowledge and skills as a “Strength” I must have experience in actually practicing them on a daily basis. While I can definitely see a direct correlation between the “transfer of learning” that must take place for me to move from an effective campus administrative position to that of an effective district-wide leader, in order for my knowledge to grow from “Competent” to an area of “Strength,” I need to gain real-world experience in dealing with knowledge and skills associated with Competency 8.

Accessing the lectures, interviews, readings, and resources were critical to understanding the concepts in this course. Through the lectures and interviews I have gained understanding on what a “goal driven” budget is and why it is important. I have learned about some valuable resources that the TEA website contains, such as the various sections within the TEXAS EDUCATION AGENCY FINANCIAL ACCOUNTABILITY SYSTEM RESOURCE GUIDE, and the information included within it. Of most benefit to me were the face-to-face interviews I was able to hold with my district’s Superintendent, and Chief Financial Officer. Interviewing them allowed me the opportunity to gain a better understanding of what fiscal responsibility looks like, how it is implemented, and what their (Superintendent and CFO) roles and responsibilities are. Another key understanding I gained in these interviews was how important communication with stakeholders is throughout the process.

Each week during this course I feel that I have grown exponentially through my participation in the required activities. I have learned about school finance history, how it has evolved, and how litigation has helped to form our current finance system. I understand how the terms equality, equity, adequacy, and economy of scale are related to finance. I also have learned the following acronyms and their meanings: ADA, WADA, M&O, and I&S. I’ve been able to practice and learn why a goal driven budget is important, and how funds should be allocated based on district goals towards student achievement.

Posting reflections and key understandings on my blog, as well as posting comments on others’ key understandings, has helped me to grow and learn what is required in this course. One of the most important components of this course was the utilization of the group wiki process. I was placed in a wonderful group of dedicated individuals, who were devoted to growing and improving our learning using a collaborative approach. I felt my group was unique in that we are located in various parts of the state, are from large and small districts, in which some members have a few years of administrative experience and others are experienced administrative veterans. From my experience in this course, this made for a versatile group of educational professionals that provided an optimum learning experience.

Overall, this has been a very demanding course for me as School Finance is not high on my interest level. But, as a school leader and future district leader, this course has increased my interest in School Finance, as well as has provided essential information that is important to my successful continuation in the profession. 

Week 5, Part 1: Code of Ethics for School Leaders

Reflection:

Though I am familiar with it, it has been beneficial for me to review the Texas Administrative Code Educators’ Code of Ethics, (TAC, Chapter 247, Rule 247.2 – Section 2). While focusing on Professional Ethical Conduct, Practices and Performance and Ethical Conduct Toward Professional Colleagues, I couldn’t help but see a direct correlation between ethical performance and leadership performance. In John C. Maxwell’s The 21 Irrefutable Laws of Leadership he states, “Follow them [laws of leadership] and they [employees] will follow you.” Here are a few laws of leadership and how they relate to ethical actions as a school leader.

• The Law of Solid Ground- Trust is the Foundation of Leadership-

o      Unethical practices by a school leader, in which one would misappropriate, divert, or use monies, personnel, property, or equipment committed to his or her charge for personal gain or advantage would immediately shatter the foundation of trust.

•  The Law of the Picture- People Do what People See-
• If employees see mismanagement in regards to funds, why would leaders expect differently of them? Modeling ethical behavior for all employees is imperative.
• The Law of Buy-in- People Buy into the Leader, Then the Vision-
• Nothing can more quickly destroy buy-in to a leader and his/her vision than unethical decision-making. When a new superintendent joins a district he/she must work gain the respect of others. Making ethical decisions is important to earning the buy-in of your colleagues.

(B) Standard 1.2. The educator shall not knowingly misappropriate, divert, or use monies, personnel, property, or equipment committed to his or her charge for personal gain or advantage.

Professional educators, at times, are given the responsibility to purchase supplies for Science experiments using a district check. This could present a situation in which an educator could participate in an unethical practice. For instance, if an employee were to take a district check to the grocery store to purchase some supplies for a Science experiment, but included in the purchase some items from their home grocery list, this would be using district monies committed to his/her charge for personal gain. This could result in termination. 

(E) Standard 1.5. The educator shall neither accept nor offer gratuities, gifts, or favors that impair professional judgment or to obtain special advantage.

Superintendents wield much influence over their district’s budget, and how funds are allocated. The textbook adoption process is very competitive, and could present a situation for unethical conduct. For example, a large school district is seriously considering two different Reading textbooks for the next cycle of adoptions. If a company were to offer the Superintendent an all expenses paid vacation if his district were to select their textbook, this could be a situation in which a gift was offered that could impair professional judgment or to obtain special advantage. If this were to occur, the superintendent could be forced to resign.

(F) Standard 1.6. The educator shall not falsify records, or direct or coerce others to do so.

Each year Americans are required to file an income tax return with the IRS. Educators may deduct up to $250 that they spent over the last year on school supplies. One does not have to itemize the deductions in order to receive it. This might create a situation in which educators, who do not spend money on classroom supplies, could unethically choose to claim this deduction because of the unlikelihood of being audited on such a small amount of money. If this was to occur and the individual was audited, they may receive criminal charges and be forced to pay the money back.

(E) Standard 2.5. The educator shall not discriminate against or coerce a colleague on the basis of race, color, religion, national origin, age, gender, disability, family status, or sexual orientation.

In one particular district, a new female administrator was not being paid commensurate with a new male administrator, despite having the same qualifications. The female administrator sought charges for gender discrimination and won. The superintendent was forced to resign.

(F) Standard 2.6. The educator shall not use coercive means or promise of special treatment in order to influence professional decisions or colleagues. 

Standard 2.6 would pose a compromise for a superintendent who has a son/daughter applying for a competitive teaching position in the district, if he/she were to promise or suggest the hiring principal would receive a salary increase if the son/daughter were to be offered a position with the district. This situation could result in termination of the superintendent for trying to influence a professional decision for monetary gain.

 There are many checks and balances when dealing with school funds today, and many of the above scenarios are unlikely to happen. It is important for a school district leader to model and promote the highest standard of conduct, ethical principles, and integrity in decision-making, actions, and behaviors. As a highly recognizable individual, the superintendent must promote these ethical behaviors, if he/she expects others to follow them. 

Week 4, Part 5: CFO Interview on Financial Audits

Initially, the district selects criteria on which auditors will be ranked. The external auditor is selected based on a qualification process, and not on the amount that would be charged for services. Then the district advertises the need for an external auditor and takes in bid packets from auditors. A Request for Qualification (RFQ) would be completed, as opposed to a Request for Proposal (RFP). The RFQ is criterion based, in which criteria are rated on a point system. A few examples of criteria for qualification are reputation, length of experience/service in governmental auditing, number of employees serving on the audit team, references, and number of schools being served by the auditing company. Once bid packets are received, the qualifications are tallied, and the district contacts the top ranked auditor according to the qualification criteria. At this point, the district negotiates cost with the external auditor. If the district is unable to come to an agreement with the top ranked external auditor, it can then go to the second ranked auditor. Technically, cost is not supposed to be a consideration in selecting the auditor.

The audit takes place on-site, in which they review district transactions, entries, bank statements, conduct interviews, review ledgers, expenditures, payroll reports, and assets of the district among other things. The audit evaluates internal controls to review for checks and balances to guard against any possible abuse or misuse of funds.

The results are communicated in a formal report, including flow charts, along with a presentation to the school board. Summaries for each indicator are included, and may or may not be accompanied with findings. Findings are not desirable as they are areas of concern, but recommendations are given to address the issue. Corrective actions should take place in regards to findings as it can hinder the following year’s audit.

Interviewing my district’s Chief Financial Officer on how an external auditor is selected, how the audit is conducted, what is concluded in the audit, and how the results are communicated has increased my knowledge and understanding of district financial audits. Prior to this interview I have had very little experience or knowledge with this process, and I feel this interview was very beneficial to me. 

Week 4, Part 4: Understanding Personnel Salaries in District Budgets

I was able to discuss this subject with my district’s Chief Financial Officer in order to gain a better understanding of the district’s personnel salaries. Personnel salaries in my district amount to $20,153,319 and account for 78% of the budget. With the current decrease in education funding in our state it is easy to understand when the local district budget needs to be trimmed, it oftentimes is decreased in the area of personnel. As 78% of the Maintenance & Operations fund is allocated towards personnel, cutting costs within the other 22% can be minimal at best. It is interesting to note that just a 3.37% in the total payroll of my district totals $656,376. While this is a customary increase, it can really strain a local budget.

A 5% increase in salaries for all personnel would positively impact morale, but could negatively impact the local budget. This increase would be attractive to potential candidates, and would help the district retain current personnel. This would also help employees maintain their standard or quality of life as the cost of living continues to rise. While employees will welcome an increase in pay, this does not necessarily mean that student achievement will improve. As noted in the previous paragraph, even a minimal increase in employee salaries can have a significant impact on the local budget, and how this increase is going to be funded must be considered. As state funding continues to decrease, districts may not maintain the ability to afford salary increases. 

If a 5% decrease in salaries for all personnel were to take place, this would negatively affect morale, but could provide much needed funds for other district expenditures. A decrease in salaries would not be attractive to current or potential employees; also, teacher and employee retention rates would decrease. A decrease in salary would not necessarily dictate a decrease in student achievement. 

Week 3, Part 4: Reviewing & Analyzing My District's M&O Fund

In the LISD, the Maintenance and Operations, or M&O, general fund revenue totaled $25,487,076. The source of funding is from local property tax revenues, other local sources (such as grants), state revenues, and federal sources. The local property tax rate of $1.46 consists of $1.17 for the M&O, and $0.29 for the I&S, Interest and Sinking debt service fund. Local property tax, excluding the I&S fund totals $10, 915,000. Other local sources included in the local revenue totals $275,360. State revenue for the M&O amounts to $14,256, 716. Federal funding sources equal $40,000. Local property tax accounts for 42.83% of total revenues. Other local sources total 1.08%. State revenues account for 55.94% of budget funding, while the federal sources amount to 0.16% of the budget.

The LISD Board of Trustees adopted a deficit budget of $26,124,116. The majority of the budget, $13,066,184 or 50.02% of the deficit budget is allocated to instruction. $12,008,209 in the instruction function is dedicated to salaries, including teachers and instructional aides at all five campuses. The remaining instruction funds are dedicated to contract services, supplies, and materials. Plant and maintenance operations is the next largest category, which accounts for 16.68% or $4,358,565. Of this, $1,825,108 is payroll cost. This includes the maintenance and custodial positions in the LISD. The remaining portion of plant and maintenance operations is allocated for contracted services, supplies and materials, and capital outlay. Maintaining facilities district-wide is accomplished through this allocation. Student transportation accounts for 7.04% or $1,838,411 of the local maintenance and operations budget. The transportation payroll totals $1,328,316. The remaining allocations to student transportation are for transportation routing software, fuel, and vehicle maintenance costs. Transportation costs account for a significant portion of the district because our district consists of over 600 square miles and encompasses seven populated areas (Bend, Copperas Cove, Izoro, Kempner, Killeen, Lampasas and Lometa) and portions of three counties (Bell, Burnet and Coryell). During the school year district buses travel over 500,000 miles. 5.96% of allocations of the district M&O ($1,557,400) are for school leadership, the majority of this being for payroll costs. The remaining allocations for the budget are no greater than 4% each and include Instructional Resources, Curriculum and Staff Development, Instructional Leadership, Guidance and Counseling, Social and Health Services, Co-curricular Activities, General Administration, and other services the district uses in day-to-day operations. Of the total M&O general fund 78% is designated for district payroll.    

Week 2 Part 5: Additional Stakeholder Input

Summary:

For this interview I was able to interview our district Chief Financial Officer. He provided some insight into his position and the types of input one could receive for budget development from varying groups of individuals in a school district.

Central Office Administrators and Staff and Board of Trustees

I grouped these two categories of individuals together based on the information I received from the interview. The inputs towards budget development received from these groups are similar in that they have a responsibility to place emphasis on the district mission and goals. This input during the planning and preparation phase can be related to projections on student enrollment growth/decline, staffing trends and patterns, as well as facilities planning. During the evaluation phase this input would be outcome-focused on looking at how the district budget was either successful or unsuccessful on aligning with the district mission, vision, and goals.

Principals

Input received from principals would be campus-focused and would align with many of the same issues as stated above, but at the campus level. Principals may provide projections on enrollment, staffing patterns, and facilities planning and improvement for their campus. Principals can give perceptions and suggestions on particular programs and if they should be continued. Principals can evaluate the funds at the campus level and provide input on how to more effectively allocate resources in the future.

District Improvement Committee and Site Based Decision Making Committees

These two committees are similar in mission, but vary in scope. Input from these groups may deal with how staff development funds are spent, as well as advisement of successful or unsuccessful programs.

Teacher Organizations

These organizations may provide input on staffing trends, patterns, and improved resource management at the classroom level. Teacher organizations could also advise on suggested resources that would be beneficial to students.

Key Stakeholders

Input received from these individuals may be more immediately focused on the ‘state of the district’ as well as on items that the community values and supports in its schools.

Reaction:

Interviewing our district CFO was a great learning experience for me. The input from the above constituents about budget development can be placed into two categories: needs and wants. A superintendent must determine what is necessary to reach the goals the board has set out, and what the district can do without. He will need to take input from the above groups into consideration to help in the budget development process. Research would support seeking input from the above groups, but I would like to know how often it actually takes place in the “real” world.

Week 2 Part 4: Supt. Roles/Responsibilities in the Budgeting Process

Summary: I interviewed my superintendent about his role in the budgeting process. He explained that his role is to oversee the budget development process as well as make recommendations based on district priorities, available resources, and anticipated changes to district finances. During budget implementation he stated he must ensure appropriate expenditure of budgeted funds, to provide for clear and timely budget reports, and to monitor for effectiveness of the overall process. I learned that the superintendent is very involved in the three phases of budgeting; planning, preparation, and evaluation. I also learned a lot of time and effort is made to make accurate projections for student enrollment, staffing, and facilities, because each of these areas are very significant in the district budget. I also learned that an effective superintendent will clearly communicate with staff members and the board about the budget, throughout the process.

Reaction: As I have stated before, my superintendent is very honest with me about the position. He stated that budgeting was not his strength, and may have cost him an opportunity for a position in the past. He stated that he relies heavily on his Chief Financial Officer and communicates with him throughout the three phases of the budgeting process. He told me that most likely, a '3AAA-5AAAAA' school district will have a CFO with the main responsibility of the budget, though the superintendent will always oversee the process, implementation, and evaluation of it. He also stated that a '1A-2AA' school district will more than likely not have a CFO and thus the superintendent has a more demanding role in the day to day budgeting process. He did also mention that the region service centers could be very instrumental in helping support a superintendent in this position. When viewing the assignments for this course a few weeks ago, I felt very overwhelmed because I do not feel I had adequate knowledge about the district budget process. It is so important, and the skill set to effectively plan, prepare, and evaluate a budget is much different from what I do on a day to day basis. After visiting with my superintendent and CFO I felt much better about the knowledge required during the phases of the budget.