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Strategic Budgeting Basics for Best-in-Class Business Officers

By Net Assets posted 10-02-2018 07:55 AM


Financial Management |

How can business officers develop an optimal working relationship with their heads of school in order to better support their schools? Peter Christian, director of finance at Windward School, and Dean Quiambao, partner at the accounting firm Armanino LLP, outlined key tips in a webinar earlier this month. Christian began with a few general pointers:

  • Meet with your head of school at least once a week, and share any potential surprises as soon as possible.
  • Know your school’s accounting software so you can pull data whenever needed; don’t rely on others in the business office to provide it.
  • Memorize basic financial facts about your school so you can answer questions at any time. These facts should cover enrollment, financial aid budget, percentage of budget spent on aid, percentage of students on aid, debt, the debt interest rate and annual payment, average tuition increase, average salary and salary increase.
  • Get out of the business office, attend school functions and meet with division heads.
  • Know your school’s mission and long-term strategy.
  • Pursue professional development.

Strategic Budgeting

The strategic budgeting process generally begins with the head of school and business officer, said Christian, then brings in the board president and treasurer, and finally involves the finance committee and larger board. A good relationship with the enrollment manager is key to understanding revenue that may be available to fund the budget, he advised. For most schools, tuition, enrollment, salaries and benefits are the primary budget levers that administrators can adjust to make ends meet.

While business officers are always working on two budgets at once — actual and proposed — the budgeting cycle typically begins in September or October, when Christian said he builds Windward’s new budget. By November, the finance committee is discussing the budget, benchmarking and running long-range models. Then in December and January, firmer numbers on enrollment, tuition, salary, proposed hiring and program growth are plugged in, and the board approves the budget. By late January or early February, the school issues teacher agreements. In March, student agreements go out, budget updates continue as actual numbers come in, and hiring to replace departing teacher kicks off. April brings more reliable enrollment numbers that indicate if the budget needs adjusting. A clearer picture of the next year’s hiring is available in May, which may result in further budget adjustments. After celebrating the end of the school year in June, audit preparations and the audit itself consume July and August.

Christian and Quiambao addressed a number of other topics: benchmarking, governance, the monthly balance sheet, dashboards, long-range planning, the audit, enrollment contracts, liability and property insurance, benefits, legal issues, leadership skills and more. Listen to the webinar, read the transcript and download the slides in the NBOA webinar archive.



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