Prepare for Your Audit! Steps 5 & 6: Review and Submit Your Audit 

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By EdTec Staff

November 14, 2018

You’ve made your way through the first four steps of the audit cycle – now all that’s left to do is review the audit report and submit!  For California charters, these last two steps occur in November and December.   

Contents of an Audit Report

An audit report contains 14 sections. See the chart below for a summary of the information included in each section, as well as why each section is important.

While all sections of the report contain useful information, the most revealing is the Audit Year Findings section, where the auditor addresses issues identified throughout the auditing process that represent a deficiency in the charter school’s internal controls. There are two types of findings – a material weakness, which is the most severe finding; and a significant deficiency, which represents a less severe finding but still warrants flagging and correction. The auditor’s findings outline what the charter school did or did not do that was incorrect or improper, as well as the generally accepted expectation for what the school should have done. The findings also provide detail around the impact of the deficiencies on the school’s financial statements, as well as recommendations for what school leadership should do to resolve these issues.  

Common audit findings for charter schools include inadequate resourcing or tagging of restricted fund activity; missing documentation such as credit card receipts; lack of adherence to purchase or approval policies and thresholds; untimely deposition of funds; improper capitalization of assets; and compliance issues.  

Reviewing the Audit & Preparing a Response

It is important for school leadership to review the audit report for accuracy of information, as well as to make sure they understand all findings. For example, were the findings a result of a lack of adequate policies in place, or rather a staff violation of existing policies? Then, staff must prepare a response acknowledging or contesting the findings. The response should provide additional context and/or an outline of corrective action to be taken, where appropriate. Perhaps the school plans to draft revised purchasing policies or increase education and training to make sure all staff understand the current policies.  

This response is typically prepared by the school’s business office staff, who may find it helpful to reach out to their back-office services provider for assistance with explaining previous actions, as well as with implementing new policies and processes designed to help prevent future findings.  Some responses may also require consultation with legal counsel. Once complete, the response should be reviewed by the charter school board before submission to the auditor.

The Final Step 

Once the board has reviewed the response and has signed off on the rest of the audit report, the auditor will submit a final report to the designated authority. Audit reports for California charters must be submitted to the California Department of Education by December 15.  

 

 

Part 2 Rethinking Compensation: A Tactical Guide

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By Allison Wyatt, Founding Partner, Edgility Consulting

September 10, 2018

In our last blog post, we noted that compensation ought to address the needs of teachers and staff, as well as to the organization’s own objectives. We recommend that you start with establishing a sense of just how competitive you want your compensation to be, and in what specific roles and markets.

Ask your team and board:

  • What is our total value proposition?
  • How competitive do we want/need to be?
  • Where are we in our growth cycle?
  • What is it that we want to reward in this organization?
  • Who are our staff?
  • How do we balance paying competitive market rates with maintaining internal equity?

Doing the Research: How to Study Market Rates

To create a market-based compensation structure, you’ll need to understand where you stand relative to the market, which depending on your organization may include the local school district, similar organizations, as well as other nonprofits, public agencies, and even companies who might be competing with your organization for talent in key roles. Wherever possible, stick to comparisons with your own organization’s industry, mission, geography, and budget/staff size.

To find comparable compensation data, consider searching:

  • Job postings
  • Industry-specific surveys
  • Publicly available data, such as district pay scales, nonprofits’ IRS form 990s (which report pay for the mostly highly compensated employees in each organization) through Guidestar or the Foundation Center, and databases like Transparent California, which logs compensation information for public employees in California

Try to use at least three sources to ensure that the data is sound. At Edgility, we are wary of sites like Glassdoor and Payscale, who sometimes report salaries for jobs based on a very small sample size. We prefer specialized databases like CompAnalyst, which is updated monthly to keep up with fluctuations in the market and covers more than 4,000 benchmark jobs gathered from comprehensive employer surveys.

Creating a Compensation Structure

With data about your organization’s compensation philosophy and comparable market salaries in hand, you can then consider building a pay structure, including:

  • Pay grades or levels, in which similar jobs are grouped together. For example, an entry-level data associate, a reception clerk, and a paraprofessional might all be included in the same grade, with the averages of their market salaries used as the midpoint for that grade, or you might group all principals or program managers in the same grade.
  • Pay ranges or salary spans within those grades or for each role — according to ZipRecruiter, the range typically extends 30% range of the midpoint or average market salary for a junior or support role, 40% for mid-level management, and 50% for executives. New hires tend to earn around the middle of that range, and experienced top performers earn 80-100%.

For particularly large or complex organizations, pay schedules may be created, which vary by business line (in the case of a school organization, this may vary between school sites and the central office) or by location based on the cost of living and competitor salaries in that market.

For example, the National Center for Montessori in the Public Sector suggests this starting point salary schedule for teachers in public Montessori charter schools, along with benefits, 2% yearly step increases, periodic retention bonuses, and stipends for taking on additional responsibilities.

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Finally, map current jobs and salaries against the new structure to determine whether your new compensation structure matches existing pay, including whether there is equity across levels, roles, and other characteristics. You’ll get an immediate sense of whether there is equity across the organization, and whether there are adjustments that need to be made.

What Matters Most: What Happens When You Address Compensation

Organizations that take a strategic, research-based approach to compensation find that new employee salaries are easier to set, and that existing employees feel more properly valued and compensated.

“Compensation analysis helped us determine highly beneficial changes that are attracting and retaining top talent,” agrees Margaret Winnen, Director of HR & Talent Development for College Track.

At Compass Charter Schools, Superintendent & CEO J.J. Lewis says his team recently shared a new compensation structure and benefits package with staff, who were pleased that salaries will now account for past teaching experience. Teachers and non-instructional staff will also receive bonuses tied to criteria like workload, enrollment, and student performance.

Over time, happy and appropriately compensated employees translate into less turnover, more stability, and greater productivity — an effort we think is well worth the cost.

About the Author

Allison Wyatt is a founding partner at Edgility Consulting, which finds the leaders that education organizations need to make a difference. Prior to launching Edgility, Allison built and scaled a human capital consulting practice at a national retained executive search firm. In addition, she has served as the vice president of human capital for Education Pioneers.

Part 1 Rethinking Compensation: A Matter of Value

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By Allison Wyatt, Founding Partner, Edgility Consulting

August 31, 2018

Staffing is a critical ingredient for any education organization — and finding the right people has never been tougher. For decades, the supply of new teachers has been slowing down, particularly in critical subject areas such as math, science, and English language learning, as well as in high-need low-income schools. Enrollment has dropped in both traditional teacher preparation programs as well as alternative certification routes like Teach for America.

Meanwhile, the rising Millennial generation tends to avoid teaching, wary of what they perceive as a difficult profession with few upsides. “Our generation is impatient and eager to take on greater responsibility and assume leadership roles. Most school districts just aren’t structured to do that,” laments former teacher Jonathan Cetel.

Indeed, across the teaching profession, satisfaction has been decreasing — particularly among teachers of color and those most needed in high-need subjects and schools. “The teaching workforce continues to be a leaky bucket, losing hundreds of thousands of teachers each year—the majority of them before retirement age,” note analysts at the Learning Policy Institute.

While teachers leave for a whole host of reasons, including poor school cultures and lackluster working conditions, compensation is a very real part of the problem — but also a promising part of the solution.

Balancing the Pay Scale

Many education organizations, particularly startup schools trying to make the most of every grant and per-pupil dollar, worry primarily about paying too much for the talent they recruit. In a previous post on this blog, EdTec found that charter schools spend 59% of their budget on salaries and benefits, with brand new schools spending a bit less (53%) and established schools spending more (64%). Many schools choose to hire brand-new teachers and Teach for America corps members in order to stretch their funding, while others pinch pennies on principal and central office salaries so as not to raise board member eyebrows or public scrutiny.

But the cost of paying too little can also add up fast. For every employee who leaves, a district or school spends thousands more on recruiting and training their replacement — as much as $20,000 per employee, finds the Learning Policy Institute. That adds up to a teacher turnover tab of somewhere between $2.2 billion and $7.3 billion nationally each year — not to mention the time and energy required by existing staff to do the recruiting and training, let alone the effect of these frequent changes to colleagues’ working dynamics and to schools’ relationships with students and their families.

Of course, compensation is not a silver bullet for all staffing needs, nor should it stand alone. Compensation should be tied to overall organizational objectives, and to the needs of teachers. Teachers believe in fairness, equity and transparency, and are interested in being compensated for years of experience and degrees (even though research shows that neither of these measures are tied to student learning). Generally, research has found that teachers are not interested in pay-for-performance but somewhat more interested in incentive pay for teaching in hard-to-staff subjects and schools, as well as differentiated pay based on responsibilities and on value-add or growth in student learning.

For example, my organization Edgility Consulting worked with Compass Charter Schools, an online school with 100 staff members serving 17 counties throughout California. Compass recognized that they were competing with more online and brick-and-mortar schools throughout the state for talent, but had no formal compensation structure in place. “2017-18 was a year of both change and growth for Compass. As part of this change and growth, we sought to better understand our competitiveness in the marketplace and if we were being fair and equitable with our total compensation with our staff, as compared to our peer charter schools,” says J.J. Lewis, Superintendent & CEO of Compass.

By conducting focus groups, we learned that teachers and other staff were generally satisfied with their current salaries (although some felt their prior teaching experience was undervalued), but wanted greater equity across the team and more transparency into their earning potential. We helped Compass create a compensation structure with clear guidelines, that recognizes prior teaching experience, and with bonuses tied to student load, student success, and program quality.

Considering Central Office Compensation

Of course, compensation considerations must also extend beyond teachers to include principals, administrators, and other staff, who may be even more likely than teachers to be considering non-education jobs as alternatives to their school-based roles.

For example, we conducted a study of central office compensation for ACE Charter Schools, a nonprofit charter school operator in San Jose, California that now runs four schools serving about 2000 students but is considering national expansion. ACE had recently completed a salary study for teaching staff and wanted to ensure its central office staff were being paid market competitive rates. Upon comparison with districts and charters of similar scale in the San Francisco Bay Area, we found that ACE was generally paying competitively, and provided them with market data to communicate that to staff. In addition, we offered ideas on other types of rewards and recognition to help these employees feel valued.

We also studied the central office compensation of Mastery Charter Schools, a charter school turnaround operator with 24 schools in two states that serve 14,000 students. Mastery was hoping to be more transparent, consistent, and competitive as it grew. Using external market research, we developed market-based salary ranges, mapped internal positions to the structure, and identified staff who fell outside the structure as well as scenarios for reconciling that discrepancy.

Likewise, education nonprofit College Track is a national college completion program that empowers more than 3,000 students annually to earn a college degree and achieve upward social mobility, with more than 100 staff in California, Colorado, Louisiana, and the D.C. Metro Area. They “re-benchmark” their compensation every few years against a set of larger and more complex organizations in order to stay competitive.

“We now understand how our compensation and benefits compare to similar organizations in our industry and geographic markets and we were able to get clear on role descriptions and the markets in which they compete, as well as assess our benefits package overall,” says Margaret Winnen, Director of HR & Talent Development for College Track. For example, the compensation analysis highlighted distinctions between different program roles that in turn yielded better comparable salaries to use as benchmarks, and indicated that a more competitive family leave plan would be more valued by their employees.

The Comp Curve: Watch the Road Ahead

Typically, teachers’ dissatisfaction with their salary — as with their working conditions and opportunities for growth — tends to grow as they gain experience. As such, you should be sure to take into account increases over time, and consider developing not only fair compensation frameworks but rather full career pathways that address professional growth and fulfillment as well as pay.

For example, we studied the compensation at Benjamin Banneker Charter School, a single site charter school in Cambridge, Massachusetts with high satisfaction and low turnover. This is despite the fact that Banneker pays their teachers below the market median. The school invests that saved money in robust professional development and significant flexible funds for student projects and field trips. Teachers feel supported, but are also groomed for and promoted into leadership roles. We worked with the organization to establish clear guidelines for salaries and raises based on experience, but teachers were adamant — they would not trade higher salaries for those other more important benefits.

For more guidance on how to go about studying your organization’s compensation against the market and setting up a clear, equitable, and transparent framework — as well as more details on the results these organizations have achieved by clarifying their own compensation strategies — check back next week for our follow-up blog post.

About the Author

Allison Wyatt is a founding partner at Edgility Consulting, which finds the leaders that education organizations need to make a difference. Prior to launching Edgility, Allison built and scaled a human capital consulting practice at a national retained executive search firm. In addition, she has served as the vice president of human capital for Education Pioneers.

Prepare for Your Audit! Step 4: The Main Audit.

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By EdTec Staff

August 8, 2018

You’ve selected an auditor, communicated with them frequently, and completed the pre-audit steps. Now it’s time for The Main Audit. This phase involves all information as of the fiscal year close and occurs between August and November. During this stage the audit firm will perform fieldwork at your school and request sample financial transactions from the school administration.

What Happens?

During the pre-audit or interim audit, most audit firms do as much as possible for items not dependent on the fiscal year being closed. Now is the time to tackle the information as of fiscal year close.

Pay close attention to:

  • Financial activity immediately following the close of fiscal year
  • Information and how it has or has not changed from the unaudited actuals
  • Subsequent events, all important financial or relevant school events that occur after year end

School administrators should be prepared for the auditors to test financial information by selecting a sample of transactions and requesting back-up (invoices, receipts), as well as perform procedures on financial statement balances. The auditors will ask for specific documentation to provide evidence that the school is following all necessary policies. Take the time and effort to organize all your financial information and back-up ahead of time so that everything is readily available upon request.

You should expect your auditor to do fieldwork during late Summer or Fall either at your school or at the office of your back office provider (such as EdTec), if you are using one. The in-person work usually takes around 2-4 days. Nowadays, with a lot of information being stored on internet accessible platforms the need for fieldwork is beginning to diminish. Confirm the plan with your auditor and establish when and how the fieldwork will take place.

How Do You Facilitate?

During the pre-audit, you should have created a plan that outlines how you will provide information to the audit firm. Stick to that plan. If possible, try to create an electronic share space to place your school’s financial information and make it available to the audit firm. This ensures an organized and expedient way to share information.

If your audit team is coming to your school location, a dedicated physical space for the auditors is crucial. Take the time to set aside a room or space and confirm that it will be available when the auditors visit.

The audit firm will generate requests for more information as they are conducting testing. It’s important to be responsive to prevent holding up the process or requiring them to stay on site longer than necessary.

Example for CA Charters: Auditing the LCAP

The auditors will begin by selecting an action or service from the LCAP that your school (LEA) has identified as having expenditures.

You will then be responsible for guiding the auditor as to how they can find those certain expenditures in the general ledger.

Having all your documentation and back-up clearly organized and accessible will ensure the main audit runs as smoothly as possible.

Auditor’s Next Steps

Even when fieldwork is over, there’s still a lot of work for the auditors to complete. They need to follow up with outstanding items or tests being conducted after the main fieldwork and organize audit work and documentation. They also need to prepare a list of audit adjustments, if any are required, double-check all work, and conduct peer and partner review of work papers. Lastly, the auditors will provide a draft of the financial statements for your review.

When discussing timeline with the contracted audit firm, it’s important to make sure this time-frame is discussed and included in planning.

Conclusion

If you have done a good job communicating with your auditor during the pre-audit and have your files ready to share for testing, the main audit should take place without any unexpected setbacks. Be prepared to discuss any changes from the unaudited actuals and explain financial activity following the fiscal year close. Remember to have a space dedicated for your auditors and work hard to response to their requests quickly. The faster the main audit can be completed, the easier for all parties involved and the less likelihood of having issues.

Stay tuned for our next and final article on the audit cycle, the Audit Report Review and Submission!

Organizational Design for Charter Schools: A Case Study

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By Christina L Greenberg, Co-Founder & Partner, Edgility Consulting

May 16, 2018

“”Every company has two organizational structures: The formal one is written on the charts; the other is the everyday relationship of the men and women in the organization.”  – Harold Geneen

Among all the things I have learned working with schools over the past fifteen years, perhaps the most important lesson is that each school community is a distinct organism with a culture, traditions, and character all its own. This does not mean that best practices from a particular school cannot be leveraged or applied at another, but it does mean that we need to be sensitive to the site context and culture when making recommendations. This is especially true if the best practices we are considering require change on the part of current employees and/or the functional division of labor and organizational structures in which they sit.

One of the areas where I think schools have the most to learn from other organizations is in their talent management practices. And one of the core talent management practices that many growing school organizations ignore at their peril is the imperative to create a clear and appropriate organizational design, reporting structure, and job responsibilities along with a transparent salary schedule that is evidence-based and reflective of broader market trends.

Case Study 

About 18 months ago I was brought in by a small but growing charter school organization to help them evaluate the effectiveness and appropriateness of their non-teaching staff roles, responsibilities, and reporting structure. The principal and many of the staff had started there when it was a brand new, stand-alone school six years before. Based on parent demand and its academic success, the school decided to expand the grade levels they served, creating an elementary and middle school program.

In planning for this change, school leaders had spent time developing and implementing a model for the increased educator capacity they would need including demand for new classroom teachers, specialists, and other instructional staff. They had modeled the facilities needs that would result from an increase in enrollment and ensured that their student enrollment and thus budget revenues would cover these updates. Finally, they hired one new school leader and promoted others so they would have adequate instructional leadership for their expanded grade levels. In short, they did all the things that most schools in their situation would do in preparing for an expansion or replication of an existing academic program.

The one thing they didn’t plan for, though, was the need to update their projections and expectations for leaders and staff who did not sit squarely on the academic side of the house. They still had one single office where all non-teaching staff worked, with an open reception area and a few offices along the perimeter for more senior staff. The Director of HR, Data Analyst, and other admin team members would regularly get pulled into conversations with parents around school routines or student health and discipline matters even though there were dedicated receptionist/assistant staff that should have been managing those types of issues and inquiries.

In addition to the lack of physical separation between what we would typically consider “central office” staff and those dedicated to school site activities, there was a lack of clarity regarding who reported to whom and who was in charge of which functions. All of the clerical/admin staff felt overworked, in large part because they each felt they were supposed to be involved in everything but did not understand who had ultimate accountability for most core activities. Small matters like preparing flyers and ordering food for events took on outsized importance as the office lacked clear systems for ownership of even low level tasks. And finally, job descriptions were nonexistent or out of date while salaries were inconsistent – some employees seemed to be paid outside the market range (either too low or too high) without a clear rationale.

Areas of Concern

This school approached our firm to help them sort out these challenges and come to resolution on these key questions:

  • What is the difference between school site and central office staff and how do we delineate between these folks in their titles, duties, reporting structure, and where they physically work in the building?
  • How do we adjust our previous org chart, reporting structure and roles/responsibilities for staff as our school organization expands? Once we develop the ideal org chart for our team, how do we evaluate the skills and interests of our current team to discern which roles are appropriate for whom? And finally, what do we do if we don’t see a match between someone’s skills and interests with one of our new positions?
  • How do we start to identify inefficient practices and workflows on the non-instructional side of the house and how do we communicate these areas for growth to the rest of the team without people feeling personally challenged or that their work (and thus their job) is threatened long-term?

Project Outcomes

Before jumping to recommendations, we started by first examining what staff members were currently doing in their jobs in the hopes of then being able to pinpoint areas of inefficiency or where too few resources were being allocated to ensure staff success. We asked the school’s HR lead to require employees to track their time over a one month period, i.e. listing the tasks they worked on, category of work those tasks fell under (i.e. admin work, data analysis, parent communication, etc.) and duration of each activity. In addition, we scheduled one-on-one interviews with every admin team member, from receptionists to directors and senior school leaders. With each, we discussed what they saw as their core responsibilities, what challenges they faced in completing those tasks, and what they liked best and felt most confident in within their current duties.

Once we had a sense of the current state of the organization, we then turned our attention to best practices research to design the ideal for: how responsibilities should break down in terms of teams and individuals; how to ensure functional areas are covered in an efficient way; and a reporting structure that maximized current staff talents and future needs. We gathered sample org charts from a dozen similar sized charter school organizations as well as interviewed several talent leads and administrators at those schools to find out their answers to some of the questions above.

Both of these steps – diagnosing the current state and looking at how others have solved similar problems – led us and the school leadership team to realize they needed a much clearer line between staff who were primarily responsible to a specific school site and those whose purview was broader, requiring them to be more separate from the school both physically and in terms of job accountability. The leadership team decided to put up physical barriers between the school reception desk and the office space dedicated to admin who worked on HR, accounting, and data so they could have a quiet space and sustained, uninterrupted time to work.

We also realized that having a corps of admin generalists did not serve anyone’s interests well, and thus managers needed to be much more specific about what each person needed to manage and to whom they reported. This meant that some folks had to give up responsibility for things they were used to being a part of while others had to change who they reported to and thus adjust to a new manager. At the same time, it also meant each job was more specific and narrowly tailored to a common set of responsibilities, and targeted a similar range of competencies that better match skills and abilities that tend to go together (i.e. external facing interactions with community members vs. detail oriented, paper-based tasks).

With a new org chart, coherent job descriptions, and evidence-based salary schedules in hand, senior leaders decided to open up these positions to the public for the first time in years. Managers met individually with staff who could be affected to talk through the reorganization plans and share new job titles and responsibilities. Current staff were invited to apply for any of the roles and were given priority for interviewing. In the end, most people were able to stay, either in a very similar role or by shifting to a new, more defined job title and set of responsibilities. One person did end up leaving because there was not a role that fit her expectations. (In this case, the organization honored her service by giving her time to search for a new job and providing her with positive references.)

When we checked in one year later, school leaders were feeling much better about how the office runs. They appreciated the benefits of tightening up on accountability and reporting structures, and observed a large boost in employee morale as a result of improved role definition and focus.

What We Learned

In this project, we were reminded that although it can be tough to tackle reorganization head-on, not acting and just hoping things will work out can be a much worse outcome for everyone involved. By starting with gathering and analyzing data about the current state of affairs, collecting artifacts and examples around best practices, and then using both of those – as well as your own intuition and understanding of your organizational culture – to craft a new org design (including roles, responsibilities, and clarity around lines of accountability), you can dramatically improve office efficiency and morale, thus better serving your instructional team and – most importantly – your students, in the process.

About the Author

Christina L Greenberg is Co-Founder and Partner of Edgility Consulting, a leading executive search and talent management firm serving schools and nonprofits in the education space. Her practice has a particular focus on the talent needs of small- to mid-sized charter school organizations. Christina is originally from the Bay Area, lived in LA for almost a decade, and for the last 14 years has lived with her family in Oakland, CA. She is a long-time board member of Lighthouse Community Public Schools, a charter network with two schools serving grades K-12 in East Oakland.

Prepare for Your Audit! Step 3: The Pre-Audit

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By the EdTec Client Management Team 

March 22, 2018

In our last blog post, we covered the first two phases of the audit cycle: Auditor Solicitation and Auditor Engagement. In this post, we’ll take a deeper dive into the third phase, the Pre-Audit. This phase occurs between April and June, and involves the auditor’s first visit to the school and frequent communication between the auditor and school leaders.

Once your charter school board has selected an auditor, the first step will be working with the auditor to establish a timeline for the final report. Keep in mind that you’ll want to leave enough time to conduct a thorough review of the audit report, so the earlier you can begin the pre-audit, the better.

During the pre-audit phase, it’s important to ask questions as they come up. Remember, your auditor is a resource, not an adversary, and they want a clean audit just as much as you do. The pre-audit phase is designed to prepare the school for the main audit, so now is the time to clear up any confusion about the process, test internal controls and compliance, and remediate any issues before the end of the fiscal year.

As you prepare for the auditor’s first visit, there are a few things you’ll want to get in order so the visit runs smoothly. It is helpful to have reviewed the segregation of financial duties, prepare an explanation for significant or complex transactions, and gather key documents. These documents include internal controls policies and procedures, paperwork related to pending legal matters, as well as copies of significant transaction such as leases and loans, new contracts with service providers, and new grant agreements. Your auditor may also ask for financial documents such as trail balances and check registers.

In addition to making sure your financial house is in order, the auditor will need proof that the school has been keeping up with state reporting compliance. Well in advance of the first visit, start compiling copies of all state compliance records and supporting documentation, as this process can be quite time consuming. This documentation includes:

  • Student records, bell schedules, calendar, instructional minutes
  • CALPADS Fall I reports (1.17, 1.18 and 8.1)
  • English Learner, Free/Reduced Lunch Program records
    • CELDT or ELPAC scores for EL/RFEP students
    • NSLP or alt. income form for all students reported as FRL
    • Direct Certification reports (3 reports pulled throughout the year)
  • Teacher credentials
  • ASES attendance reports and supporting documentation
  • Attendance records
    • Copy of P2 and all supporting documentation
    • Detail and Summary for testing month
    • Teacher signed verification for testing month

Whenever possible, provide your auditor with electronic documentation to keep everything organized, and try to fulfill their requests in a timely manner to avoid delays; remember, delays now mean you will have to rush during the main audit phase later. If you have any concerns about being able to produce certain documents, share them with your auditor as soon as possible so you can work together toward a solution. Lastly, remember to share major new developments with your auditor as they occur; your auditor will need to know about plans to open a new school or take out new loans, or expectations of new funding sources, as this will impact your school’s financial situation.

Once it’s time for the actual visit, make sure you set aside ample time to meet with the auditors to provide an overview of the school’s operations and review their questions about the school’s policies and procedures. This will set the stage for a smooth and efficient visit.

The pre-audit phase is designed to prepare your school for a successful main audit. Treat your auditor like a true partner; don’t hold back any information, be clear and timely in your communication, be open to suggestions regarding how to improve processes, and ask questions as they come up! And stay tuned for our next blog post about the next phase of the audit cycle, the Main Audit!

Strategic Planning for Charter Schools: A 101 Guide

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By Guest Blogger Jonathan Kaufman, Co-Founder & Principal of  Third Plateau

One of the biggest missed opportunities we see among charter schools is operating without a strategic plan in place. LCAPs and charter renewals are necessary and useful, but they are far from a substitute for a strong strategic plan. For most school leaders, that then begs the question, “Okay, but what is a strategic plan and how do I get one?”  

A strategic plan is a document that sets a bold vision for what an organization wants to accomplish and outlines the path to make that vision a reality. Unlike LCAPS and renewals, strategic plans are internal documents, meaning they are never audited by an authorizer or the state. This means that a school can be aspirational and audacious in its thinking and planning, and include goals that it could never risk including in a compliance-focused LCAP or renewal. By giving your stakeholders the freedom to dream big without compliance restrictions, you’re helping to push the school to higher levels and reminding everyone why the school exists in the first place. Simply put: strategic plans allow school leaders to be far more authentic regarding what they care about and why, truly rallying their teachers, boards, students, families, and community around a bold vision and purpose.  

Even more important than the document itself, the strategic planning process is exceptionally valuable. A successful strategic planning process takes about six months and does four things: 

  • Takes an honest look at what’s going well and what’s not. This means asking tough questions and giving honest answers. For example, if your four-year college attendance rate hasn’t shown improvement over the last few years, avoid excuses and identify the root causes. Perhaps more supports are needed for students struggling with certain subject areas required for admittance into four-year colleges. 
  • Solicits candid input and feedback from supporters and detractors. There are bound to be uncomfortable discussions, but it’s better to address those head on than to pretend the underlying issues don’t exist. 
  • Enlists a wide range of stakeholders to co-create the plan. Create a strategic planning task force and make sure to invite representatives from all stakeholder groups, including teachers, staff, board members, students, parents, and community members.
  • Empowers a school and community to take ownership over the future they are trying to build. It’s easier to generate buy-in for your strategic plan when there are genuine efforts to identify opportunities for improvement, and when all groups are represented and informed.  

Great schools are driven by great strategic plans. So what are you waiting for?  

Prepare for Your Audit! Steps 1 & 2: Choose an Audit Firm and Engage

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By the EdTec Client Management Team 

December 12, 2017

An audit is an official, independent review of your charter school’s financial statements by an approved CPA. An annual audit is required of charters in most states.  

There is much preparation required before the annual audit.  The timeline below breaks up the charter school audit cycle into multiple phases and includes suggested dates. In today’s blog post, we’re going to focus on the first and second phases: Auditor Solicitation, which all schools should ideally start preparing for in September, and Auditor Engagement, which should be completed by April 1. If you’re not there yet, there’s still time – but you should start now!  

Charter schools must select an auditing firm at a publicly noticed board meeting, and contract with the selected audit firm by April 1 of the current fiscal year (e.g. you need to select an audit firm for the fiscal year ending June 30, 2018 by April 1, 2018).  Before this can be done, a charter school’s board must issue a request for proposal (RFP) from auditing firms. You can find sample RFPs for audit services online, or ask your local charter schools association or peers at other charter schools. A school’s letter to auditors should include the school’s legal name, address, and contact person; years of operation of the school; history of prior audits; status of 501c (3) application; fiscal year to be reviewed; enrollment and ADA data for fiscal year to be reviewed; if the school is site-based or independent study; if federal expenditures will exceed $750K; if the school also requests tax filing services.  Remember that you should only reach out to auditors listed on your authorizer’s approved vendor list. You might want to ask peers at other charter schools for auditor recommendations, as this can be helpful advice.   

Once you have proposals in hand, it’s time to bring them to the board for review and voting action. There are a few key qualities that are important for board members to look for in an audit firm.  Preferably, the auditing firm will have experience working with charter schools and understand how they operate; if your school is in its first year of operations, you’ll want to work with a firm that has experience working with first-year charters. An ideal firm will also be responsive to questions and proposal requests, as this is an indication that there will be good communication during the auditing process when pressing questions arise and the school requests feedback and support. It’s also important to select a firm that seems to have a reasonable, fair mentality.  

Many districts and county offices of education require some sort of notification of the selected audit firm, along with cost information and certification that the firm is authorized to conduct school audits, and some may require notification prior to April 1, so be sure to check with your authorizer. And be on the lookout for our upcoming blog post about the third phase of the audit cycle, the Pre-Audit! 

Tax Season Is Coming…Get the 411 on 1099s!

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By Jacqui Runholt, AP & Business Process Specialist

November 29, 2017

You may not be a tax expert, but if you work with vendors that provide services to your charter school, you’ll need to know the basics about 1099s. A 1099 Form is used to report income from self-employment earnings, as well as interest, dividends, and other earnings, and you’ll need to submit these forms to eligible vendors and to the IRS. We’ve put together a few tips to keep in mind leading up to tax season:

  • Any vendor that is paid to provide services to your school could be eligible to pay taxes on 1099 income. As a best practice, get in the habit of requesting W-9’s from all your vendors when you start working with them, so you have the information you need to issue 1099s when the time comes.
  • Start reviewing your vendor list now so you’re not scrambling to meet the January 31 deadline!
  • If your charter school leases its facilities, the rent expenses may be reported on a 1099 Form.
  • If you’re not sure if you need to submit a 1099 for a certain vendor, just go ahead and submit it. The IRS will know whether a vendor is eligible. It’s better to be safe than sorry.

The due date for submitting 1099s to vendors and to the IRS is January 31st, but don’t wait until then. If you’re done at the beginning of January, submit! Corrections can be made through the end of March.

Grow Your Enrollment Applications With School Tours 

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Use tours as a marketing tool to reach prospective families and tell your school’s story.

by Melanie Horton, Senior Marketing Manager

July 10, 2017

You’ve gone through all the hard work of starting a charter school.  Your programs are successful and your students are doing well. But you’re still struggling to meet your target enrollment numbers each year.  Success on its own will not automatically generate a waiting list; you must arm prospective parents with information about why your school is a strong educational option for their children.  Because while school choice provides the opportunity for your school to exist in the first place, it also creates competition.

Tweet: Most charter schools don’t have a large marketing budget, but there’s a lot you can do that doesn’t cost much at all. Start by offering tours of your school. Advertise these tours on social media and at local community events. Get in touch with the local homeowners’ association or chamber of commerce, and ask if you can speak for a few minutes at the next meeting. Talk about your school’s mission and how you serve local families, highlight recent achievements, and invite community members to take a tour of the school and/or pass along the message to those with school-aged children.  Reach out to local churches, community centers, and businesses, and ask if you can post flyers on their bulletin boards.  Make sure to include the tour schedule along with your school’s website, phone number, and social media information so that those who wish to contact you about tours are able to do so.

It’s important to get the tour logistics right. Aim to schedule tours at times that are convenient for working parents, such as early in the morning or during lunch hours.  Make sure to keep the tours under an hour (you can always assign staff to stay later and talk to families who aren’t in a rush). If you’re not sure when to schedule the tours, ask a few parents of current students for their input. Maybe evenings and/or weekends work best for your community.  In that case, you might not be able to implement all of the suggestions below, but at least you’ll have a captive audience.

It’s helpful to capture visitors’ contact information so you can stay in touch and monitor interest in your school across time. Create a simple sign-in sheet – the data gathering is easier if this is done on a tablet or computer – that includes the  parent’s name and email address, and the prospective student’s current school (if applicable), and ask visitors to sign in when they arrive for the tour. Knowing where prospective students are coming from will help you to target future communications efforts, and having a database of email addresses of interested families makes it easier to keep telling your school’s story after the tour. If your school sends  newsletters to current parents, include your new contacts in future newsletters to keep them informed of all the great things happening at your school.

Start a cohort of student ambassadors who, along with school staff, will participate in the tours and talk about their experiences. This is especially valuable at the high school level, as parents tend to bring their children on the tours, and they often have questions that only current students can answer.  Inviting parent volunteers to participate in the tours is also beneficial, as they can speak to why your school is a good fit for their families.

It is helpful for the tours to be led by an administrator and a teacher, as both offer valuable perspectives and can answer different questions about the school, its programs, and policies and procedures.  If possible, divide the visit into a school overview (complete with a short question and answer session), and a walking tour. During the presentation, remember to highlight what makes your school unique, including interesting programs and classes, innovative learning methods, and awards and achievements. Invite the student ambassadors to give a quick presentation about something they’re involved in at the school, and invite parent volunteers to speak about parental involvement.

Parents like to know what their child’s day-to-day will look like. On the tour, make sure to visit at least one classroom in action; you can create a rotating sign-up schedule in advance so there isn’t any last minute planning on the day of the tour. Guests don’t need to sit down and observe the class, but they will appreciate being able to pop in and note the setup and size. If possible, visit both a core subject classroom (e.g. math or science) as well as a music or arts classroom. Also plan to stop by areas that are unique to your school, such as a school garden or robotics lab. For larger schools,  parents might be interested in seeing key facilities such as the gymnasium and theatre.

Make sure to provide visiting families with something they can take with them that will aide in their decision-making process. Create a simple one-pager that includes key statistics about the school, such as enrollment, average class size, special programs and classes available, graduation and college statistics (if applicable), contact information, and enrollment/lottery dates and details (there will likely be a lot of questions about this last one, and you want to make sure everyone has the information they need – after all, this is the point of the tour!).  You don’t need to be a graphic design expert to create an effective document, and free online tools like Canva and HubSpot can help with layout and design.

If anyone on the tour has a question you can’t answer, note their contact information so you can follow up with them when you find the answer. And make sure your main office staff is knowledgeable of the school and trained to answer questions, or direct inquires to the appropriate people, when they receive follow-up phone calls.

When guests leave the tour, they should have a clear understanding of what your school is all about. This is a valuable opportunity to connect with prospective families and brag about your school; make the most of it!