The role of Chief Financial Officer (CFO) has evolved significantly in the last few decades. Once primarily a back office job that consisted of managing budgets and balancing spreadsheets, the CFO now plays a role in facilitating the success of thousands of students. To gain insight into the role of the modern K-12 CFO, we asked a member of LINQ’s Board of Directors, Nicole Conley, to share some of her experience. Nicole is currently the Managing Director at Siebert Williams Shank & Co. She has more than 20 years of financial management experience. A decade of that time was spent as the CFO for Austin ISD, a school district with 129 school communities, serving more than 80,000 students.
We all know the role of the CFO has evolved and nowhere is this more evident than in K-12 education. School district CFOs have taken on more strategic advising roles and, as a result, most of them have had their portfolios expanded. K-12 CFOs are taking on more of the leadership responsibilities in developing the strategies to reach organizational goals. We know much more about the economic impacts to the students and to our economy, so it necessitates that CFOs be at the table to support academic teams.
Due to our financial and business backgrounds, CFOs have more expertise in understanding how to allocate time, money, and human resources. Given the scarcity of resources, people in this role must be as strategic and smart as possible to align resources in the most effective ways possible. School budgets are extremely tight, so this role is responsible for giving them more wiggle room. In addition, compliance standards are more cumbersome than ever with all the new sources of revenue and the politics that come along with oversight. Politics are extremely relevant at every level when it relates to school system funding and accountability, be it local, state or federal.
CFOs must be active in ensuring that schools and districts are focused on the core lines of business along with stabilizing and growing student enrollment. School districts are substantial enterprises, with many independent school districts providing wider community services beyond education. These can include food and meal services, housing, transportation, health and social services – the list goes on. When you think about it, it’s not uncommon for a high school principal to manage over $10-15 million in resources for just one site. CFOs are usually at the center of it all. Strategic leaders know that if there aren’t resources behind an initiative, you won’t achieve results. Therefore, strategic endeavors usually start and end with the CFO. For example, most funding systems are driven by student enrollment, and no one understands that in the way that K-12 CFOs do.
Our students are expected to know more and more to adapt to our evolving world. Technology has been, and will continue to be, used to dramatically improve the way we conduct business. It is usually the CFO who recognizes this first, and the lack of funding to fully support our students’ educational needs has required CFOs to step up. In addition, we are living in a more transparent fish bowl with higher levels of community engagement and accountability. Equity is important in our communities, so the focus has been on serving all students. As you can imagine, addressing those needs is proving to be more costly and require more complex solutions, which has expanded the role of the CFO.
How and when to issue debt and school bonds. While it seems like a simple timing decision, it’s so much more than that. You must remember that the economic impact of a school bond decision extends far beyond the school district. That small choice can have an impact on the firms that lead the transactions, what bill taxpayers have to foot, and which projects get done – such as which schools receive repairs and attention. Technology investments and payroll for the district, as well as connected construction, supply chain, finance and legal industries, are also affected. Usually, executing payroll is the number one priority outside of our fiduciary responsibilities to taxpayers. Contracts and vendors can represent 15-30% of a school or district’s budget. Most of that money, even if it’s going to contractors, is supporting payroll and taxation in our very own communities.
Student-based budgeting is allocating resources based on student needs and their individual characteristics. Under this budgeting method, a base allocation is assigned for each student, and incremental funding is provided according to their characteristics, i.e., special education, English as a second language, or economic condition. Site-based budgeting is allocating the resources to ensure that a school has the base level of resources to operate a school site with an ideal number of teachers and resources. Theoretically, student-based models would be demand driven by student subscription; not necessarily guaranteeing a base level of resources to operate because funding is driven by the number of students in attendance. Most systems use a hybrid model because there is not a wide appetite to close schools when school populations are declining. In fact, closing schools can be so divisive to communities that most systems have de-facto, site-based funding.
Analytical, critical thinking and quantitative skills are necessary, and that goes without saying. Also, being politically savvy doesn’t hurt. A new skill that has emerged, and often gets missed, is strong communication skills. CFOs must be able to engage both with their internal teams and their external communities. The stakes are high for our students, so everyone has an interest. The better you are about understanding the wide range of needs and interests, the more effective you’ll be as a leader in communicating and balancing out those needs.
There are infinite needs but finite resources, so communicating and managing expectations is a requirement of the CFO role. Also, as the world makes progress on inclusion, we have to lead by example and understand that the CFO doesn’t look like who we have traditionally envisioned. The ability to understand talent and abilities in all packages will allow you to build the best internal teams, so lean into diverse hiring practices.
Understand fully the goals of school districts, make the most strategic resource investments, and recognize your role in getting students to the finish line. Keep apprised of all the resources available to you – private and government – and leverage technology to improve district functions, relieve staff burden and improve teacher retention. The CFO has a substantial impact on working conditions for teachers whether it’s paying them more, faster, or smarter.
Effective leadership begins with understanding the needs of your stakeholders, from administrators and teachers to parents and students. Sign up to receive updates from our team of experts at LINQ directly to your inbox.
Want to learn more? We'd love to hear from you. Send us your information, and we'll reach out to you as soon as possible.