Finance NAD Principals’ Handbook Excerpt
The principal has the ultimate responsibility for operating the school on a sound financial basis within the school board-approved operating and capital budgets. The principal is expected to be informed regarding all aspects of school finance, including day-to-day protocols and processes (e.g. bank reconciliations, purchasing, payables/ receivables). Therefore, it is vital that the principal and those responsible for the school's finances (business manager/accountant/treasurer) communicate regularly.
Experience is the Best Teacher
An Interview with Steve Fuchs | Business Manager, Walla Walla Valley Academy
Experience is the best teacher” is a well-known and frequently shared quote. However, Christian speaker Andy Andrews is quick to contend that other people’s experience is really the best teacher. It saves you the high tuition of making all the mistakes yourself. So, what might we learn from another dedicated educational leader with experience in managing the business function in Adventist academies across four decades. I sought the answer from Steve Fuchs, Business Manager of Walla Walla Valley Academy for the last two decades. In a humble self-effacing way, here is what he has to share.
From your experience what “discovery” along the way stands out?
COMPASSION. When dealing with anyone in the area of finances you have to put yourself in their shoes, “How would I feel I someone were talking to me about the same issue?” I have a saying taped to the wall in my office that says, “Assume the Answer to every Question is: COMPASSION.”
Over time you learn strategies you wish you had adopted earlier. For instance, I record parent conversations about finances. I use Outlook. Every parent is a contact with financial arrangements and conversations recorded. Payment date commitments are put in the calendar. This system is not perfect but it is a system and that is better than “no system.”
Finally, the importance of a network of community partners, friends of the school, who are ready and willing to help with scholarship funds is a crucial resource to develop. Don’t be hesitant to ask. Also, when you assist families with finding tuition dollars, they know you care. That helps when you may have to talk about delinquent accounts and school policy.
What vital skills and traits help one to be successful in this position?
More vital than specific skills is the need to develop in many areas. You have to be a “Jack of All Trades.” So, a key trait is to not hesitate to ask for help. Ask questions of conference/union treasurers, auditors, risk management specialist, etc. Departments and service in the church are filled with professionals that can provide answers, guidance, and lessons from their experience.
I touched on the human relations side of the job first. However, given that treasurers live in the precise world of accounting, you will likely need to deal with recurring internal tension that occurs when we have to leave that world and enter into areas that call for a different mindset or protocol. This can be hard to do.
What tasks in the job assignment must have top priority?
Keeping things current! Information must be current to be valid. Financial statements are true only if they have the monthly cycle of jobs up to date. Other things like collections can spiral out of control.
What tips would you share about two important business functions: budgeting and collections?
Budgeting: Good budgeting requires careful calculations of many variables. In my EXCEL budget file there are 15 tabs with some of those spread sheets being hundreds of lines deep. At WWVA we’ve tracked enrollment trends in detail. This, along with other annually updated data, are all included in a “Premises” tab. From there interconnected formulas automatically update budgets for many specific accounts.
Collections: If you get behind it is not pleasant. I have learned that sending out emails and notes in statements needs to happen frequently. I recall a marketing professional say, “people need to hear something 12 times before it sticks in their memory.” Recently, I included at least four messages about the school’s policy for student accounts within the month before finals and it did improve the collection percentage. Collections is where effective relationships with your “customers” is tested. It is good to know what is happening in their lives. Good principals with high relationship quotients, good will, and good memories help parents know that the school cares. This makes collections conversations possible.
What brings you the most joy in this assignment?
Seeing former students, especially those for whom I recall working hard to help make Christian Education possible. With long experience comes more joy as I’ve had opportunity to help more families. In fact, I helping former students get their children into a Christ-Centered education. This is my best reward. A couple of weeks ago I spoke with a former student who had difficult teen years. We had a very engaging conversation at church two Sabbaths in a row. That is what this mission is about; seeing young people grow to adulthood and know they are committed Christians.
Financial Indicators for Academies
Mark Remboldt | Treasurer, NPUC
Dennis Plubell | Vice President for Education, NPUC
School principals and business managers, board members and chairpersons, are all called upon to make important decisions about the school, based on their understanding of organizational finances. Good decisions require reliable financial data. The challenge is sorting through copious details to find key information that reveals organizational health and financial trends.
If vital information could be reduced to a few, simple percentages, more individuals would be able to quickly understand the overall situation and participate in decision-making. Financial ratios are designed to be the indicators that fulfill this need. A financial ratio is “the relationship between two numbers drawn from the organization’s balance sheet, operating statement, and related records.” By combining two numbers, a third, more useful data point is created.
In a school setting, ratios are designed to show, in simple terms, the financial strength of the school, its reliance on specific sources of funding, and the percentage of that funding needed for major categories of expense. The great strength of financial ratios is that it adjusts for the effects of time and across organizations. This allows comparisons across schools and over time. Regular school reports should consistently report a few key indicators with graphs that highlight the change in indicators with previous fiscal periods.
The ratios most in academy financial reports are the Current Ratio, the Liquidity Ratio and the Percentage of Required Working Capital Ratio. Although useful, these don’t reveal the whole financial picture. Other areas of academy operations overlooked are the demand and contribution ratios, such as personnel resource allocations; dependence on student financial aid; plant operation and maintenance costs; and conference subsidies.
A word of caution; financial ratios enhance our stewardship by improving decisions, but they are only one of many methods of financial analysis. Ratios can be misleading especially when used to compare a school with “national norms.”
Sample Financial Ratio Indicators for Adventist Academies
Conference, Union Conference and North American Division financial leaders have been urging the use of good financial ratio indicators for more than two decades. Recently, an NAD Education Taskforce recommended that a consistent set of such indicators be created into a “financial dashboard.” The idea being that better information will lead to better informed decisions in challenging times. For now, we’ll share several types of ratios that should be used consistently in Adventist academies. These ratios are a sampling of what could be helpful to bring understanding to school leaders entrusted with the responsibility for sound financial management and strategic planning.
Balance Sheet Ratios
Academy Financial Indicators Example
MISSION: STRENGTHENING ADVENTIST EDUCATION ONE LEADER AT A TIME
Vice President for Education
North Pacific Union Conference
Berit von Pohle, Editor
Pacific Union Conference, Director of Education
Ed Boyatt, Editorial Advisor