How can you plan to spend if you don’t know your costs?
How can you ensure a future if you don’t create reserves?
What are the risks to your projected income?
What are the risks to your career?
Be prepared to work collaboratively.
You may have an excellent CFO (Chief Financial Officer), or Accountant or Bursar in charge of your school finances, but you must be financially literate so you can collaboratively lead.
If you are a school leader, or aspiring school leader, you will understand effective teaching and learning. On the other hand, it is assumed that the ‘finance person’ knows where the money is coming in and where it is going out.
Schools Boards and owners have a fiduciary interest or responsibility and generally have a finance person at the governance level. Based on my own experience Boards and investors need help in understanding how to spend money to support effective teaching and learning. This is where you come in because financial literacy is not just about understanding your school finances, but also being able to effectively communicate to those from a non-education background why they should spend the money in the areas you have proposed.
Be prepared to chase knowledge
Putting it simply, financial literacy is knowing
- where your money comes from and where it goes,
- how to read financial statements,
- how to build reserves for the future and
- how to help others understand your priorities.
Effective decision making requires knowledge, so you must know what questions to ask. If you are unable to understand what you are seeing in the financial statements, then you won’t ask the questions you need in order to make a decision that will support the mission of the school.
Be prepared to get your hands dirty/enjoy the responsibility
Another component of financial literacy is ‘learn to love the numbers’. I have worked with school leaders who have a fear of their lack of knowledge of school finances, so it has been easy for them to leave it to the expert. You may never have the expertise that my ‘finance people’ have, but your responsibility is oversight. Oversight of the position and finances, comes with the need to ask questions and to work together with the ‘expert’ to make better decisions.
Be prepared to know enough to let go
Good leaders value the knowledge and skills of others. Part of the leader’s role is to add value through questioning and challenging others to look deeper or wider. Sometimes we need questions to explore new possibilities, or uncover unconscious bias.
There is a difference between oversight and micro-managing. Oversight consists mainly of being informed and asking questions while micro-managing is doing the job for them. As a school leader, you have oversight of all school operations and therefore you need to work with others (experts in their fields) and help them achieve their full potential in that position and for the school.
In conclusion, as a current or aspiring school leader you have an ethical duty to those parents who have paid money, or businesses that have paid tuition fees, to exercise sound financial oversight and assure them that their money is spent wisely to maximise effective teaching and learning aligned to the mission of the school.
Until next time ….
and thank you to my critical friend for fabulous editing …..