As you prep for the financial reporting requirements under ESSA, there are two key considerations to keep in mind: 1) Your current financial system may not be what you need tomorrow and 2) the public is now your district’s financial partner!
Your Current Financial System May Not Be What You Need Tomorrow
To prepare for compliance with ESSA’s financial requirements, district leaders must first recognize the scope of technological changes that will be necessary to comply with the new law.
ESSA’s mandatory reporting requires user fluency in tracking and reporting financial data. Practically speaking, most districts’ financial data may need to be organized differently than it is now, and allow for funds to be directly linked to each location and funding source. Reporting must be made far less technical and more user-friendly so that a wide array of insights can be gleaned from the data. Your current systems may not be designed to easily supply this information, which means you may need to start investigating alternatives.
The Public Is Now Your District’s Financial Partner
The second new aspect that district leadership must consider are the public’s responses to seeing its district’s financial data published for the first time.
ESSA envisions a future where parents can easily compare spending among individual schools and across school districts by checking those numbers on a district’s website. If there is a disparity in spending, district leadership should be able to articulate the reasons behind it, or a plan to correct it (or, most likely, both).
In a post-ESSA world, district leadership cannot afford to be uninformed about inequities that may exist in their district. Parents want to know what resources a school is being given and how that funding compares to other schools. For many district leaders, who often have backgrounds in instructional practice rather than finance, training on how to interpret, analyze, and communicate this financial data in layman’s terms is critical.
How Can a Superintendent or Chief Financial Officer Prepare for ESSA?
Every school district is different, and some are more readily prepared to meet the ESSA reporting requirements than others. No matter where you fall on the preparedness scale, here are four tips for getting your district mentally and operationally ESSA-ready.
- Embrace the new era of financial transparency and accountability that ESSA has ushered in. ESSA’s end goal is to ensure that every district is offering the most support it can to the students that have the highest needs. This unambiguous goal is partly the reason why ESSA was passed with broad bipartisan support.
- Recognize that compliance with the law will likely require changes to the way your school district organizes and reports its financial data. This affects both data systems and financial processes. Most important is to know that modern software and technology can make this shift to location-based accounting and user-friendly reporting much easier.
- Anticipate the public’s reaction to seeing financial data available by school in a user-friendly format for the first time. Prepare for this by understanding how and why your district’s resources are distributed, and plan for how you will communicate and articulate the changes that may take place in the future.
- Find the right financial and technical partners to help you with this work. Sophisticated financial planning and analysis is not a core competency for most school district staff. There are great partners that can help your district with the software and professional services to do this successfully. Resist the instinct to try doing something new and complex with old static methods.
ABOUT THE AUTHOR
Allovue works with districts and state departments of education across the country to allocate, budget, and manage spending. Allovue's software suite integrates seamlessly with existing accounting systems to make sure every dollar works for every student. Allovue also provides additional services such as chart of accounts and funding formula revisions.