Paul Campey, Director of Business Development, Pacific Hills Christian School,
Head of Pacific Hills Consultancy; Dural, Australia
When Christian schools attempt to master the art of managing their finances, they are facing one of the biggest challenges of Christian schools around the world. Schools struggle to deliver excellence in Christian education, and in many cases they struggle to provide just the basic materials required to operate. In the midst of these challenges, several guidelines can make the financial management process run more smoothly and can help educators and boards manage their schools more effectively.
Stewardship
If schools remember that they are entrusted by God with His resources to do His work, they are more likely to be wise stewards with what they are given. This fact remains true whether they receive much or only very little and whether their funds come from the government, donors, or parents.
Annual Budgets
Even though the need to have an annual budget may seem obvious, a number of schools try to operate without one. The failure to determine expenditure priorities and to monitor progress results in poor management of resources and likely means that board members are not discharging their legal and moral duties. In addition, the lack of an annual budget usually causes major problems in a school’s operation.
Long-Range Budgets
Schools that develop a long-range budget can look for potholes in the road ahead and can manage their finances in light of their strategic management plan. Schools typically use 3-, 5-, or 10-year time frames for their long-range plans. At the company Pacific Hills Consultancy, we implement a 10-year financial master plan model in schools. It has proven very beneficial, particularly as schools grow and seek to plan their building program.
Key Performance Indicators
Key Performance Indicators (KPIs) assist boards in keeping the big picture in view. Even those educators and board members who struggle with reading financial reports can use KPIs to get a good sense of where a school stands financially. Some of the KPIs that we use at Pacific Hills Consultancy include student-teacher ratios, salaries as a percent of total expenses, debt per student, and fee concessions as percent of gross fees.
Good Accounting and Administration Practices
When networking among schools takes place in order to learn from those who are managing finances well, schools benefit enormously.
Many schools get into trouble, including having to close, because of poor accounting and administration practices. A good, simple, well-managed accounting system that has strong internal controls is critical to the ongoing operation of a school. Core issues such as not completing statutory obligations, not remitting necessary taxes, and being generally careless with finances will ultimately undermine the good work taking place in the classroom.
Assistance
Schools often don’t ask for assistance when they would like to improve their administration and management of finances or even when they face serious difficulties. They may try to reinvent the wheel, thinking they need to manage all by themselves. Yet when networking among schools takes place in order to learn from those who are managing finances well, schools benefit enormously. Similarly, schools can more likely resolve a problem if they ask for help as soon as the problem arises.
Managing the finances of a Christian school is not an easy task. It is sometimes complex, with many competing needs that may appear far greater than the available resources. Yet with God’s blessing and the use of effective guidelines, schools can master the art of managing their finances.
The Art of Managing Finances in Christian Schools 7.2