by Dena Koren, Senior Client Manager
June 6, 2017
It’s June, and many charter schools are scrambling to put the finishing touches on their charter school budgets for the 2017–18 school year. This can be frustrating and overwhelming given all the moving parts —finalizing staff compensation, collecting final proposals for next year’s contracts, deciding which software and curriculum to use, tracking down charter school budget plans from all the department leads, and of course, the state budget revisions… all while trying to finish out the school year!
Here’s my advice: Don’t sweat it! There is no way you are going to have all of these items finalized by the time you need to send your budget to the board for approval (likely this week or next week!). Plus, there are many aspects of the budget that are completely out of your control. Instead of worrying, try this approach:
1. Pick two or three areas of the charter school budget you’re going to focus on in the 11th hour. These should be areas of the charter school budget that are either your most significant sources of revenue or expense, or have caused problems in the past. And don’t pick “staff”! (See my next suggestion below for wrapping up your compensation budget.) Once you have picked your areas of focus, set aside a designated time (~30 minutes for each area) to dig in and try to firm up the assumptions — then put a bow on it! Once the year starts, and you have more information, you can work with your Finance Director or adviser to adjust the annual forecast to include all your latest knowledge and assumptions.
2. For staffing, again — do your best! Finalize the charter school budget with the information you know now, and include reasonable and conservative assumptions for the things you don’t know. At some point, you have to stop trying to get everything locked up and just go with what you have. But being conservative will help you avoid the frustration of going over budget down the road.
3. Make a list of the areas where you feel assumptions aren’t solid, and over the summer, push to solidify them. Also, be upfront with your board about the areas of uncertainty (note: no need to share every uncertainty, just the ones you feel are the biggest opportunities/risks). I find that outlining the missing information at a high level actually strengthens the board’s comfort with the financial plan. The board members will appreciate the transparency and feel reassured knowing you are aware of the uncertainties and on top of all the moving parts.
For most charter schools, budgeting is an art, not a science. There are countless details, many of them unknown or unknowable, so we just do our best with what we have and keep pushing for improved clarity as the year goes on!