Finance Knowledge

As part of our services for first year superintendents, IASA provides many excellent administrators' academies, one of which is Finance Knowledge for the Superintendent (AAC #462). I highly recommend that you attend this Academy. It provides new superintendents with the finance skills to prepare the budget for the 2011-12 school year. ISBE financial consultants provide each participant with a flash drive that contains eight years of Annual Financial Report (AFR) data for your school district, your school district budget for 2010-11 and also resources to make financial projections for the future.

It has never been more important to make accurate financial projections as we head into these turbulent financial times for education. In addition to the projection software, this Academy provides you with information about short- and long-term borrowing, as well as information on effective communication of this financial information to your school community.

The academy will be offered on the following dates and locations:

• January 19, 2011 in Centralia
• February 14, 2011 in Springfield
• March 14, 2011 in Glendale Heights

Who would have thought!

Yesterday I wrote about the massive changes happening in public education and how fast the landscape is changing. Then today I read in USA Today that the AFT President Randi Weingarten is proposing “ …a new detailed system of teacher ratings that includes not only classroom observations by supervisors but also written-work, portfolio and lesson-plan reviews – and student test scores.”

According to the article AFT wants to be at the table for the Race To The Top discussion. The article states “…that AFT members overwhelmingly consider ‘professional standards and good teaching’ a higher priority than defending the job rights of teachers who face disciplinary action.” I hope they mean “incompetent teachers” when they refer to disciplinary action. If they do they we are making real progress in public education.

General Assembly Acting at Lightning Speed:

Recently IASA Executive Director Dr. Brent Clark and I were talking about the massive changes we have seen in education in the last few years and how the next few years the change will be even greater. An example of this rapid change is the prediction that the Illinois General Assembly may pass a bill this week that will totally revamp the way Illinois teachers and principals are evaluated.

You may have had many questions about signing the MOU for the Race To The Top application but it looks like it will not matter as the proposed bill will make most aspects of the RTT law for everybody by 2016. Read the following article titled “How’s Your Teacher” published in the Chicago Tribune on January 11, 2010:

A lot of folks in education have been working for weeks on a broad and rigorous plan to more thoroughly evaluate the performance of public school teachers and principals in Illinois. At first blush, it looks pretty good.

The plan will land this week on the desks of state legislators -- and they will be asked to vote by the end of the week to send it to Gov. Pat Quinn. Why the rush? Because there is a ton of money at stake.

The evaluation system could be key to the Illinois application to get funds from Race to the Top, the Obama administration's $4.35 billion program to spur education reform.

Race to the Top will give the money to a handful of states that offer the boldest proposals for improving schools. The money will be distributed in two rounds. First-round applications are due Jan. 19.

Illinois could get as much as $500 million. But it won't get the money unless it shows a substantial commitment to improving the quality of schools -- including the quality of their teachers and principals.

Lawmakers will be asked to pass a bill that directs schools and their teachers unions to negotiate an agreement on detailed teacher evaluations. It gives them a deadline: 90 days for the Chicago Public Schools, 180 days for all other schools.

If CPS and the Chicago Teachers Union can't reach an agreement, CPS will have the authority to create and use an evaluation system of its own making. Suburban and Downstate schools will use a system developed by the state if they can't reach agreement with their teachers.

That's "groundbreaking," says Timothy Daly, president of The New Teacher Project, which has been a leader in national efforts to improve the quality of classroom teachers.

The bill makes some excellent demands, including that the performance of students be used as a measure of teacher performance. In some ways, though, it is a missed opportunity. It doesn't require that schools use the evaluation results in tenure decisions or that consistently underperforming teachers be fired. So we're going to have to count on school administrators to make good use of this tool.

Approving the teacher evaluation bill won't guarantee that Illinois earns a share of Race to the Top funds. Illinois could have -- should have -- done much more, such as completely removing the state cap on charter schools. (Lawmakers raised the cap instead.)

If Illinois is turned down in round one, that will be an embarrassment. After all, the people driving Race to the Top -- President Barack Obama and Education Secretary Arne Duncan -- have some ties back here.

There will be a second round, and more time for Illinois to show it's serious about shaking up the education status quo. This agreement on evaluations is, at a minimum, a good sign that some things are cooking here.

Who would have predicted even six months ago that Illinois might have a prescribed teacher and principal evaluation plan with at least 50% of the weight of the evaluation based on student performance? I remember when NCLB was passed in 2002, it had overwhelming bipartisan support of Congress with President George W. Bush proposed and Senator Ted Kennedy sponsoring the bill. Most educators did not like the tenets of the bill because they thought 100% goal of all students achieving a basic standards based education was unrealistic. In retrospect, this law has done more to improve education than any of us could have predicted and it has drastically improved performance in low socio economic school communities. According to NAEP, “more progress was made by nine-year-olds in reading in the last five years than in the previous 28 years combined.”

Those of us in education need to “hang on” because more changes are likely to come. The RTT is probably the base of the new federal legislation that will be proposed by the current administration. I agree with the Chicago Tribune writer in the article above, until we change the teacher tenure law in Illinois and allow for the dismissal of poor tenured teachers we will not make significant student achievement progress. This will be especially true this year when the massive teacher reductions occur to the current state of Illinois finances. Many school districts will be reducing excellent young teachers because of teacher seniority and teacher tenure laws.

Drive: The Surprising Truth About What Motivates Us:

I am presently reading the book Drive by Daniel H. Pink. Pink is also the author of A Whole New Mind. According to Wikipedia “Pink speaks to corporations, associations, universities and education conferences about such topics as the shift from the Information Age-with its premium on logical, linear, computer-like abilities – to what he calls ‘the Conceptual Age,’ where ‘right brain’ qualities like empathy, inventiveness and meaning predominate.”

Pink explains in Drive that the traditional way managers and leaders look at what motivates individuals is false. Managers tend to think that people are motivated positively by money and, sometimes, by negative motivation, such as threats of discipline motivate people to perform. Pink contends (and he offers views from many researchers on this topic) that most people are intrinsically motivated. This means they work hard because they want to, not because of rewards given or threats made.

My initial thoughts on this concept reflected toward both teaching and parenting practices. Currently the federal government is placing emphasis on teacher pay for performance. The excellent teachers I have worked with throughout the years dedicate themselves to their teaching not based on pay, but based on the value of wanting students to succeed. I have long contended that parents should teach responsibility to children about household chores and performing the duty should be expected based on the child’s responsibility as a family member. Students should be expected to try hard in school and perform at a high level because of the intrinsic benefit of learning. Pink relates that parents who pay children to take out the garbage, for example, have forever tied household chores with pay. Children are initially motivated to take out the garbage for pay, but will only readily continue the chore as long as they get paid. Teachers who reward children with stickers, prizes and the like face the same scenario in the classroom. If teachers reward students for expected behavior the student will only continue to perform if rewards are given.

I found it very interesting that Pink used open source type developments as evidence that motivation often is not derived from purchase or threat. He used the example of Wikipedia, an encyclopedia created by tens of thousands of people who write and edit for pleasure and do not get paid. Wikipedia is thriving today while the for-profit venture MSN Encarta no longer even exists. Open source software programs, such as Firefox and Linux, were developed by individuals who have not earned one dime for their work.

In my own career, I have been described as a “hard worker” and “Type A Personality,” because I work long hours to do my job the best way I know how. I agree with Pink’s basic tenant, that each job must pay a comparable wage equal with others who do the same work. The real trick is to get everybody in an organization working to do his or her best based on intrinsic motivation.

Illinois Pension Costs

Ohio is increasing contributions paid by individuals and by school districts for pension costs. Illinois may follow soon http://bit.ly/6SmFdb

Many states are in similar poor financial status as Illinois. Ohio lawmakers are considering increasing both the teacher and district contributions to the pension system. Illinois legislature formed a Pension Committee that met last fall and increasing the contributions for members and districts was also discussed. As well as increasing the earliest age for members to enter retirement, adding maximum number of years that need to be worked to get the maximum benefit, capping the pension retirement benefit and various other proposals.

One thing is fairly certain, pension reform will happen and costs will increase to members and districts and benefits will decrease.

Perfect Storm for Exercise:

The tip for Monday, December 14, 2009 from the IASA Daily Tips for Superintendents Calendar is “The purpose of time management is not that you become so efficient that you get more work done, rather it is so you will get more efficient to leave work on time and spend time with family or get some personal time for exercise or time with friends.” We placed this tip in December close to the holidays to remind you to spend time with family and friends and to also focus you toward exercise in this time of parties and excesses in food and drink.

The perfect storm story relates to the book I am presently reading (listening to while I am running) Brain Rules by John Medina. In this book the author describes the 12 principles for surviving and thriving at work, home and school. The first rule is “exercise boosts brain power.” Medina explains how the human brain developed over time and that even though it only weighs two percent of the human body it consumes 20% of the body’s energy. Did you know that researchers have proved that the benefits from exercise not only increase a person’s physical health it also increases the ability of the mind. Thus, this gives you another good reason to continue to exercise if you already do and start exercising at 30 minutes per day three days per week if you do not currently exercise.

The book points to studies down with students in school. Students that exercised two times per day while in school actually did better on language, reading and the basic battery of tests. (Medina, 2008). Medina points out that some schools and employers are experimenting with placing treadmills in classrooms and offices. The picture above is of a student working on a computer while walking slowly on a treadmill at a university:

Did you know that “Aerobic exercise just twice a week halves your risk of general dementia. It cuts your risk of Alzheimer’s by 60 percent.” (Medina, 2008, p.28)

School Finance Landscape:

Many of the questions at the New Superintendents’ session at the Triple I centered on school finance because of some of the dire predictions being made by lobbyists and others who pay close attention to what is happening in Springfield. There are two specific suggestions I would have for you; first, during times like these we need to learn how to make financial predictions based on good data and secondly, don’t jump off the cliff just yet.

To address the first point, you should receive specific training on making financial predictions or have faith that the person in your school district who is in charge of school finance can make financial predictions. Larger school districts have business managers who handle this function. Some school districts use outside providers, such as PMA, to help with this process. IASA, in conjunction with ISBE, provide an all day administrators’ academy on how to use the ISBE software program to make these predictions.

The key is to make accurate assumptions on the variables used when making financial projections. You need to spend considerable time, study, and collaboration with others when making the numerous decisions for the prediction software to work correctly. Take salaries, for example, we know that 70% to 85% of total expenditures are salaries and fringe benefits. You need to keep separate records of this information and double and triple check the accuracy on a regular basis.

General State Aid is very important for those districts reliant on state resources. Normally school administrators could use the figure of a $100 increase in GSA and feel fairly comfortable that their estimate will be realized. This year, however, there is talk of actual decreases in the GSA. ISBE has stated that ARRA replacement funds are the equivalent of $550 GSA new money. So if you assume no increase in new state dollars, the GSA will decrease by $550 for FY2011.

What I mean by “don’t jump off the cliff yet” relates to your estimates and how this affects your district. When you finish making your decisions on all the variables that go into making the prediction software work, you will need to examine the results. If this results in deficit spending, you need to examine your fund balances and how long you can deficit spend. You need to have open conversations with your school board, employees and community to discover what they think of this new information. But, in the end, you will be the person making the recommendation to the school board concerning any budget cuts and more importantly, possible reduction in teaching and support staff positions for your school district.

When you make this decision, I am sure you will consider the impact on the education your students will receive and the impact on the actual persons who are in these positions that you may eliminate. Don’t make the decision to reduce just because everybody else is. Examine your own financial predictions and make your own decisions based on the predictions and the input you receive from others, especially the school board.