OpenStax-CNXmodule: m14281 1 School Finance Case Study: Dealing with a School District Budget Deficit ∗ Thomas Kersten This work is produced by OpenStax-CNX and licensed under the Creative Commons Attribution License 2.0† Abstract Thiscasestudy-basedclassassignment(seeAppendixA)isdesignedasaculminatingcourseactivity through which students demonstrate not only their understanding of school (cid:28)nance basics but also show how to apply their knowledge to solving a problem impacting many public school administrators today. Because the case study is general in design, it is useful in almost any school district setting. It also allows students to document what they have learned about school (cid:28)nance and to demonstrate their creative (cid:28)nancial problem-solving skills. Students are encouraged to recommend a broad array of revenue enhancement and expenditure reduction strategies to solve a real-life school district budget de(cid:28)cit. Through this assignment, school (cid:28)nance professors will be able to assess the breadth and depth oftheirstudents’knowledgeofthebasicsofschool(cid:28)nanceaswellastheirstudents’abilitytounderstand bothsidesoftheschoolde(cid:28)cit(cid:28)nancialequation: revenueenhancementandexpenditurereduction. They willalsobeabletoassesstheirownstudents’abilitiestoemployproblem-solvingstrategiestoacommon school (cid:28)nance issue. note: This module has been peer-reviewed, accepted, and sanctioned by the National Council of theProfessorsofEducationalAdministration(NCPEA)asascholarlycontributiontotheknowledge base in educational administration. Public school districts across the United States continue to face increasing (cid:28)nancial pressures as revenues typically fail to keep pace with expenditures. In Illinois alone, over 70% of school districts currently operate withade(cid:28)citbudget,atrendwhichisexpectedtocontinue. Consequently,animportantgoalforanygraduate level school (cid:28)nance course is to provide students preparing for careers in public school administration with a basic understanding of school district-level (cid:28)nance. Knowledge Base ∗Version1.1: Jan29,20073:46pm-0600 †http://creativecommons.org/licenses/by/2.0/ http://cnx.org/content/m14281/1.1/ OpenStax-CNXmodule: m14281 2 Interstate School Leaders Licensure Consortium (ISLLC) Standard 3, which states that, (cid:16)A school ad- ministratorisaleaderwhopromotesthesuccessofallstudentsbyensuringmanagementoftheorganization, operations, and resources for a safe, e(cid:30)cient, and e(cid:27)ective environment,(cid:17) highlights the importance placed onschooladministratorslearningtomanagetheirschooldistricts’(cid:28)nancialhealth. Professorsofeducational administration who prepare school administrators share equally in this concern. Not surprisingly, graduate school educational (cid:28)nance professors typically include course objectives designed to increase their students’ knowledge of school district (cid:28)nances including sources of revenue, cost containment strategies, long-range (cid:28)nancial projections, and school (cid:28)nance problem-solving. This case study is designed to allow students to demonstrate their knowledge of school (cid:28)nance and to test their ability to develop possible solutions to a common school district de(cid:28)cit issue. National Council for Accreditation of Teacher Education (NCATE) This case study is useful as an assessment for NCATE. Please (cid:28)nd attached (see Appendix B) a rubric which can be used by the educational leadership department to assess the level of students’ understanding of school district-level (cid:28)nance basics as well as the e(cid:27)ectiveness of the school (cid:28)nance course curriculum. The rubric is both quantitative and qualitative. It includes three continuum-based quantitative scale point bands: 1-3, 4-7, and 8-10 and a comment section. A student may earn a total of 50 points. After reading the student’s case study paper, the professor assigns a point value to each of the (cid:28)ve criteria taking into account the depth and quality of the student’s work. In the comment section, the professor provides further explanation of the quantitative ratings. Use of the Case Study This case study assignment is best introduced after the students have had an initial introduction to school district (cid:28)nances. During the (cid:28)rst few weeks of the course, students should be encouraged to identify a practicing administrator with a solid background and understanding of school (cid:28)nance for an interview. Professors may also suggest potential administrators who have agreed to assist with interviews. Professors may choose to assign this as an individual or group assignment. Students may be encouraged to conduct their interviews as small groups then prepare their individual case study papers. The small group format is a particularly e(cid:27)ective approach since the use of multiple interviewers typically enhances the quality and depth of the interview itself. After students have completed the assignment, a full-class discussion of the assignment is an excellent culminatingcourseactivity. Thiswillnotonlyallowstudentstohearmanyperspectivesandactualsolutions proposed by their colleagues, but also let them demonstrate how much they have learned during the course. Professors will (cid:28)nd this a particularly useful vehicle to reinforce course content and develop pragmatic strategies school leaders must employ to be successful. Appendix A Case Study Assignment Dealing with the De(cid:28)cit Case Study Requirements Identify a school district superintendent or business manager to interview for this assignment. Use the administrator as a resource to assist you in completing the case study assignment. Case Study Scenario You are the superintendent of a school district which has 75% of next year’s expenditures already in reserve as you begin the current school year. Unfortunately, your school district is spending substantially more than the revenues you receive. This de(cid:28)cit is projected to grow dramatically over the next few years as expenditures escalate and revenues remain relatively (cid:29)at. If you don’t begin to respond soon, the district will face a major (cid:28)nancial crisis in the not-too-distant future. However, the reserve will provide time to address the problem without resorting to crisis management. Assignment Requirements After completing your interview, you will use the knowledge you gained from the course as well as the information gleaned from the interview to write an 8(cid:21)10 page double-spaced paper. Remember that the administrator you interview is just a resource and should not be your sole source of information for the assignment. Therefore,yourpapershouldbemorecomprehensivethanmerelyasummaryofthesuggestions which emerged from the interview. To assist you in structuring this assignment, please include the following sections in your (cid:28)nal paper: http://cnx.org/content/m14281/1.1/ OpenStax-CNXmodule: m14281 3 Section1:Descriptionofthepersoninterviewedincludingpersonalbackgroundandexperiencewithschool (cid:28)nancial planning as well as the demographic characteristics of the school district Section 2:Summary of the content of the interview Section 3: Your recommendations to enhance revenues and the rationale behind your recommendations Section4:Yourrecommendationstoreduceexpendituresalongwiththereasonsforselectingtheseoptions Section 5:Your personal re(cid:29)ection on both the case study scenario and school (cid:28)nancial management particularly as they relate to you as a public school administrator NOTE: This assignment is purposely broad in nature to allow you to identify as many revenue enhance- mentandexpenditurereductionactionsaspossible. Forpurposesofthisassignment, recommendationsmay includesimpleaswellascomplexactions. Infact,thebestpaperswillincludemoreratherthanfewerrecom- mendations. However, when deciding whether to include a revenue enhancement or expenditure reduction recommendation, you will need to consider its feasibility. For example, you could solve the budget de(cid:28)cit by eliminating an entire department or grade level; however, that would be unrealistic. You will need to carefully consider the political, psychological, and ethical implications of each recommendation As part of your interview, please minimally include the following questions: 1. From your experience, what are the key factors that could have contributed to the district’s de(cid:28)cit situation? 2. What strategies would you employ to maximize this school district’s revenues? 3. What strategies would you employ to minimize this district’s expenditures? 4. How would you prioritize the various proposed actions? 5. What potential issues would the district administration and school board members have to consider as they address the budget de(cid:28)cit problem? 6. Whatpolitical,psychological,andethicalimplicationswouldthedistrictadministrationhavetoweigh? Appendix 2 Case Study Assessment Rubric School Finance Criteria 3 7 10 Your Score Description of the Little or no de- Brief, basic de- Detailed, accurate context scription of person scription of all re- description of the and the district quired information personandthedis- trict Summary of inter- Little or no inter- Basic summary Detailed, compre- view content view detail of the interview hensive descrip- explained; Lacks tion of the full depth interview Revenue recom- Minimal or no rec- At least 5 revenue Thorough list of mendations ommendations recommendations feasible revenue recommendations continued on next page http://cnx.org/content/m14281/1.1/ OpenStax-CNXmodule: m14281 4 Expenditure Minimal or no rec- Atleast8expendi- Thorough list of reduction recom- ommendations ture recommenda- realistic expendi- mendations tions ture recommenda- tions Case study analy- Minimal case Basic analysis of Thoughtful and sis study analysis; all aspects; some detailed analysis minimal discus- depth of analysis; sion of (cid:28)nancial management Table 1 Comments: http://cnx.org/content/m14281/1.1/