With billions of dollars in federal pandemic aid swirling around school districts—not to mention their own multimillion-dollar or billion-dollar local budgets—many school and district leaders aren’t ready to tackle the tough stuff when it comes to school funding.
But especially with principals who place their primary focus on instructional leadershipdoes it even matter?
School finance expert Marguerite Roza, director of the Edunomics Laboratory at Georgetown University, believes that both school and district leaders should have that knowledge.
There is still debate about how deep teacher preparation programs should go into school funding. Principals are expected to be more focused on teaching and teaching-related tasks that help teachers improve.
But Roza says that the financial knowledge of school leaders can help them not only to become better stewards of public money, but also to make decisions that would improve the education of their students.
“If you look at the principal’s job—they’re in the building, overseeing, often, close to $5 [million] up to 20 million dollars worth of public investments in children, and these investments also take the form of personnel,” said Roza.
“They know a lot about what the kids need, what works and what doesn’t work in that staff. Then they should turn around and say to the district, ‘No, this isn’t working, we can’t do this again or this has to change.’ ”
Survey by Edunomics Lab of educational leadership programs, which prepare principals, superintendents and other administrators at the district level, from 30 top universities, released in February, found that while more than half — 54 percent — covered things like revenue structure and compliance issues, most leaving its graduates with huge knowledge gaps in key financial areas that they are likely to struggle with in the real world.
Building financial literacy
Less than half covered how to read financial documents, such as budgets; understand cost-benefit analysis; create and manage district or school budgets; how allocation and spending formulas work and how spending decisions intersect with equity, according to research.
In fact, less than a quarter of programs covered how district allocations work, and only 15 percent dealt with budget cuts and calculating trade-offs, according to the survey.
Data is based on course descriptions, syllabi and syllabi reviewed for preparatory programs. At least one of the universities included in the review that received a high score used the school funding programs offered by Edunomics Lab.
Edunomics examined whether eight finance-related areas appear in the course curriculum. These included topics such as the link between finance and capital and understanding cost drivers such as labor and benefits.
And when programs did cover finances, it wasn’t always in a way that helped educators the most.
For example, they tended to focus on revenues—the money districts and schools receive from the state and other sources—over which school and district leaders often have little control, not necessarily “decisions about how to spend it once it arrives in the districts “, said Roza.
“It’s interesting when what they really need to know is the part that relates to their job,” she said.
The problem, Roza said, is that many principals don’t know how much staffing costs them or that they can make better staffing decisions to meet their school’s needs if they understand the financial calculations behind it.
A principal who understands spending decisions, for example, can make a stronger case to district officials for a counselor to work with disengaged students if it’s a pressing issue in their school.
“They’re stewards in that building over those millions of dollars and not having that skill and being fluent in that and being able to participate in those conversations, it’s like they’re working behind the scenes,” she said. “We don’t pass information back and forth.”
Roza thinks this has to change.
Organizations like AASA, the Association of School Superintendents, and some large districts like Dallas have created opportunities for school and district leaders to deepen their financial knowledge.
States can also invest in building financial literacy among K-12 leaders by requiring traditional university-based prep programs to include basic financial knowledge as part of their programs, Roza said.
Professional development programs, such as the Texas-based Holdsworth Center, offer school and district leaders the opportunity to gain a deeper understanding of finance, among other leadership qualities, outside of a traditional prep environment.
“If we build that financial liquidity early, I think people will just understand and learn more along the way,” Roza said. “I don’t care if they get the training through us or someone else, but I think we need to put more emphasis on building financial skills.”
