School district CFO’s role: Accountant, strategist, visionary

How a new guide featuring three mindsets and five core functions for the strategic CFO can help evolve school district leadership

With flat or decreasing revenue, greater student needs and higher expectations from schools, district chief financial officers have their work cut out for them. But today’s realities also bring an opportunity for CFOs to transform what financial leadership looks like.

Beyond a focus on the traditional practices of ensuring compliance and completing accounting processes, CFOs can adopt three mindsets and five core functions to change the status quo, according to “The Strategic CFO: A guide for school districts.”

A new tool from Education Resource Strategies (ERS) and The Broad Center, the guide describes the shifts needed and includes reflection questions.

“Within the field of K-12, there hasn’t been a lot about what makes a strategic CFO,” says ERS Partner Jonathan Travers, lead author. “We’ve had this question of what must a strategic CFO know, do and ask. Our new normal is very limited resources. If we really are going to deliver on our districts’ missions, we have no choice but to really think about resource allocation and use in significantly different ways.”

3 key CFO mindsets

These mindsets serve as a foundation for the strategies relayed in the report:

  1. Look forward—to anticipate major cost and revenue shifts. This involves proactively solving challenges and ensuring the district can sustain investment in strategic priorities over time.
  2. Reach outward—to colleagues in other departments and community stakeholders. They should have access to actionable data that will help build broader ownership over district resources.
  3. Focus on “how well” (rather than “how much”)—with a look at how resources are meeting students’ diverse needs, addressing inequities and improving student learning.

“There’s a traditional notion that CFOs sort of sit off on an island in the system,” says Travers. “But the most powerful CFOs are the ones who best facilitate the decision-making of others.” That involves setting up conversations about how to achieve district goals with limited resources. Content leaders within the system should own decision-making around resources, he adds.

5 core functions of the strategic CFO

Aligning resources to strategies requires the following core functions. For each, the report describes typical practices and strategic CFO practices, and includes questions for discussion.

Implications for hiring a new CFO

Superintendents should consider the desired mindsets and responsibilities of strategic CFOs when filling that position—and designing a recruitment process focused accordingly, says ERS Partner Jonathan Travers, lead author of “The Strategic CFO” report.

Applicants may or may not be thinking of the need to be strategic in their role. “Stress this notion of the CFO as a team player and as a really important part of the team who has a responsibility for designing and implementing effective strategy,” Travers adds.

  1. Long-term financial planning: Go beyond a forecast based on past trends by proactively identifying changing cost drivers or future areas of uncertainty, and by explicitly framing choices that district leaders and stakeholders must make. The strategic CFO’s transparent planning process allows stakeholders to understand the challenges, trust the forecast and feel ownership as the district engages in solutions. Opportunities for widespread, ongoing public engagement with the plan are a must. In addition, strategic CFOs continuously pursue additional sources of revenue.
  2. Strategic planning: CFOs should sit at the academic planning team table to help others understand the district’s overall resource picture, including what the implications would be for potential investment decisions. The CFO can help academic leaders apply an ROI mindset.
  3. Annual district budgeting: The budget development process should start with the question, “What are the district priorities (from the strategic plan) that our budget should address?” to identify spending that meets those goals. This function also involves integrating general funds and grant funds—as well as integrating school staff, department heads and community members into budget decision-making. Prior year budgets are used as a reference, not as a default.
  4. Annual school budgeting: Central office administrators can strengthen school-level support by providing coordinated feedback to help principals achieve district priorities. Principals must be clear on which resource decisions are “tight” and which are “loose,” and how these may vary by individual school needs or performance. Strategic CFOs also coordinate budget timelines through cohesive budgeting, staffing and scheduling conversations—and ensure budgeting starts early enough to allow for district feedback and competitive teacher hiring.
  5. Collective bargaining: Strategic CFOs work with HR and academic leaders academics to better understand the compensation strategy, teacher market strategy and academic strategy with a staffing impact. CFOs and other leaders should work to create wins for both sides of the bargaining table.

Join the conversation about this report: Use hashtag #StrategicEdCFO on social media.

Moving forward

Travers says superintendents and other district administrators may be surprised by the notion of having the CFO as a core part of the top leadership team. It’s not only what CFOs do, but also how they think that’s important.
His advice: “Make sure they’re sitting at the table, make sure that they understand their role is how much and how well, and make sure that the rest of the team understands the importance of making tough decisions about the limited resources they have.”

Melissa Ezarik is senior managing editor of DA.

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