Stakeholder Financial Literacy
- By Christine L. Lee
- July 1st, 2017
School districts regularly communicate finance-related information to a variety of audiences, including district administrators, school-based administrators and the public. Each of these groups has its own level of interest in school district finance matters, its own level of financial literacy — the knowledge and skills to manage financial resources effectively and to make responsible financial decisions now and into the future — and its role in accountability for meeting organizational outcomes, need for transparency and level of advocacy.
The school board and senior administrators require financial literacy to fulfill their fiduciary duties, set strategic priorities and advocate for the needs of the district. They are most accountable for organizational outcomes, which means their level of financial literacy must be optimal.
School-based administrators need a reasonable amount of financial literacy to fulfill their duties, meet the needs of their schools and understand the organizational context. They also must promote transparency by communicating information and cultivating relationships and collaboration.
Parents and community members, including the media, are interested in outcomes and accountability for public funds entrusted to the district. Parents want to know that the district is spending their money in the best interest of their child. This group will advocate for the school system if they have some level of financial literacy and trust, which comes with transparency from the district and school leaders.
Building Financial Literacy
When their audiences don’t have adequate financial literacy to understand and appreciate the information presented, school business officials must help build it, and the best way to do that is to tell the story behind the numbers.
One strategy is to set aside dedicated time to orient stakeholder groups about the financial aspects of the organization, including how to read and understand financial information. Provide board members and district administrators with the critical questions they need to ask of the school business office when gathering data for decision making.
Another approach is to use financial reports that provide not only the numbers, but also the linkage between the numbers and the school district’s activities, priorities, and strategies. Create the story and repeat it. Tell the audience not only what they need to know, but also what they want to know, such as how the school district compares with other school districts in the area or of like size. Provide a written discussion and analysis of the financial information and its significance to the district.
Use charts and other graphics to provide a visual illustration and add meaning to the financial information. Include pictures of students and district activities to add interest and to stress that school finance is not just about the numbers.
Bringing Finances to Life
School finance managers need to provide legally required interim and year-end financial statements, but how they present them or supplement them can provide more meaningful information and build that much-needed financial literacy in the school district.
Highlighting important information through brief illustrations adds interest. In Lethbridge School District No. 51 in Alberta, Canada, we use Prezi presentation software to communicate and highlight the important areas of the audited financial statements. We also use this tool to present the draft budget before the board legally adopts it.
Most stakeholders, especially parents, want to advocate for the interests of the district. We provide them with data to do that. We present financial material, such as the district budget, using “did you know?” facts to provide important information and create understanding around pressure points or concerns. We also highlight areas of stakeholder interest or hot topics.
Capitalize on the popularity of informational graphics to provide a one-page highlight of the district budget or year-end financial performance. At Lethbridge School District No. 51, a one-page informational graphic (www.lethsd.ab.ca) highlights the district’s budget. The informational graphic grabs the audience’s attention and is easy to read and understand, making it a powerful communications tool.
The Story Behind Your Numbers
Building financial literacy is about knowing your audience, knowing what your audience needs to know, and knowing what your audience wants to know. By telling the story behind the numbers, you improve stakeholders’ financial literacy, which gives them the knowledge, skill, and confidence to make responsible decisions and advocate for the school district’s priorities.
— This article is excerpted from the May 2017 issue of School Business Affairs magazine, published by the Association of School Business Officials International. www.asbointl.org.
This article originally appeared in the July/August 2017 issue of School Planning & Management.
Christine L. Lee, CPA, CA, CSBO, SFO, is the director of finance for Lethbridge School District No. 51 in Lethbridge, Alberta, Canada. She can be reached at Christine.Lee@lethsd.ab.ca.