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Posted on May 1, 2018

Financial Spring Cleaning

Financial Spring Cleaning

by Tracey Yan, SCSBC Director of Finance ◊

We think of spring as a time of renewal – a fresh start after a winter of hibernation. Spring is also a good time for your school to consider some “spring cleaning” of its financial matters. My mother always kept a long list of her spring cleaning tasks so with that inspiration I’ve come up with a (not so long) list for schools.

Budget Preparation

This is probably the biggest item on your plates right now, and one that involves numerous meetings between administrators, business managers and finance committees. Where should you spend most of your time?

  • Enrollment: make sure you base your budget on the best enrollment information you have, including re-enrollment forms, enrollment trends, and knowledge of family situations. Once you have a reasonable total, consider deducting 2-3% of your students to ensure you have a buffer for those that move away or switch schools over the summer.
  • Staffing: since staff compensation accounts for over 70% of the budget for most schools, this is the area which deserves a lot of attention. School administrators must play a large role in ensuring efficient use of staff. Given the competitive market for teachers, the new BC health payroll tax, and rising CPP rates, compensation costs are on the rise and schools that can effectively manage their staff to student ratios will be better positioned for success.

Benchmarking Analysis

Member schools received their benchmarking reports in March; other schools should find ways to monitor financial results from year to year. But don’t just file it on a shelf in the business office – put it to good use:

  • Circulate it to your finance committee and board.
  • Ask your business manager, director of finance or treasurer to highlight and explain some of the key ratios in the report.
  • Where your school’s ratios have changed from prior years, or are different than the average for similar schools, ask why. Many times there is a perfectly legitimate reason, when circumstances have changed or the board or administration has made a conscious decision to do things differently than other schools. If there is no good underlying explanation, then adjustments may need to be made in next year’s budget (see exhibit 1) in order to take corrective action.

Preparation for the Spring Membership Meeting

We know that most people (okay, everyone) hate to listen to the financial presentations at these meetings, so try not to make it worse than it has to be. Those who attended the recent Business & Development Conference had an opportunity to see a different approach to educating members about financial matters, and I hope that many will try to implement some of those ideas. Tell the stories behind the numbers, celebrate successes and admit mistakes, tie the results back to the school’s mission and vision, use pictures, graphs and fewer numbers, and encourage dialogue and questions that will build members’ confidence when they vote on financial matters.

Audit Preparation

The Eligible Student (ES) audit arrives quickly, with forms due to the Ministry of Education by June 15. This year the process has changed, so schools will need to take the first stab at these calculations before their external accountant comes in to audit them. If your auditor has always done the calculations for you, ask them for their spreadsheets from last year so you have a place to start, and decide who in your school is going to be responsible for this task. You will also need to make sure your external accountant is licensed to audit, as not all CPAs can issue audit reports. The same new process will apply to the audit of the Statement of Per Student Operating Costs (SOPSOC) filed in October. And since schools are doing more of the work now, you should be able to ask for a small fee reduction from your auditor.

Those schools which have a review engagement of their year-end financial statements should have a discussion with their external accountant before the summer. The standards for performing review engagements have changed which will involve more work and possibly additional costs in the transition year (unfortunately offsetting any savings achieved above!)

Insurance Policies Review

Both your school and the insurance industry are constantly evolving. Make sure your insurance policies reflect the current situation at your school: replacement values of buildings, business interruption coverage that reflects the current size of the school, cyber policies to cover the every-growing volume of electronic data held by schools – just some examples of areas that are often missed. Plan to review the policies with your broker or a third party a few months ahead of the expiry date.

Job Description Updates and Annual Performance Reviews

If you have added or removed any support staff, be sure to update job descriptions to reflect the revised responsibilities. Determine who should be conducting performance reviews of each staff member, and ensure they are completed before the end of the school year. Giving staff feedback will encourage them in their successes and provide opportunities for development. God calls all of us to excellence, whether in the classroom or in the business office.

Policies and Procedures Updates

Take some time at the end of the school year to review and document any changes to the way things are done – perhaps you have changed banks, moved to a third-party payroll provider, or shifted tasks between the business office and the administrative assistant. Keeping the procedures manual up to date is a never-ending but necessary process that will ensure your school’s financial operations can continue without a hitch should someone new have to step into those roles.

If you can get through most of these, your school should be in good shape heading into the summer months and the new school year.

Not an exhaustive list of spring cleaning, but my mother would be proud!

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