Financial Analytics in a Small School District

Dr. Sandy Ozimek is the superintendent of Fox River Grove Consolidated School District 3 — her second year in the role after eight years as an elementary principal. Fox River Grove is a small district with roughly 400 students in a small, close-knit community about an hour outside of Chicago. As leaders in many small districts do, Dr. Ozimek wears many hats, and in addition to being superintendent, she is also the business manager of the district.

A few years ago, Illinois passed legislation changing its school funding formula from foundation-based to evidence-based funding. This reallocated more dollars to districts in need. While those funds help Fox River Grove, the district still relies primarily on local funding to balance their budget. Collective bargaining negotiations will occur this year, and the district also faces some major facilities expenses. The elementary school looks great thanks to a recent renovation but will soon need to repair or replace aging boilers, ventilators, parking lots, sidewalks, and roofs. How will the district afford these costs?

Crafting the Financial Plan

Typically, Dr. Ozimek bases future budgets on historical data. She meets with directors and department heads to go through budget needs line by line. What was spent last year? Is it adequate? What needs to be adjusted? Can increases be justified?

Once the budget is set, Dr. Ozimek takes it to the school board. “I try to give them more of an overview and not get into the weeds with them, so they stay on the balcony rather than on the dance floor.” At board meetings, she helps them to see what the budget process looks like, what the timeline is, when funds come in and where they come from, and typical revenues and expenditures.

Years ago, Fox River Grove created its budget with “spreadsheets and our best guess.” When asked what she would say if she had to go back to that way of doing things, Dr. Ozimek said, “I quit!”

Analytics: Showing What the Future May Hold

But since 2013, Fox River Grove has been using data and analytics software — now known as Frontline Analytics — to forecast budget needs and communicate the plan to the board. Now, rather than using guesswork and Excel, Dr. Ozimek starts with a base scenario and can model how certain decisions may impact the district’s finances over the long term.

“The nice thing about it is that we can budget for the next year and see how it ties in with our financial forecast as to how things will play out over time. If I change certain numbers, what does that do to each of the fund balances, but also to the whole bottom line?”

Because the district will renegotiate teacher salaries this year, she will forecast how different scenarios would impact the budget before they get to the negotiating table. She can also see how various investments in their facilities will affect the district’s financial situation.

“We have a capital outlay plan. If I put in the numbers as given to me by the architect, what happens to our fund balances?”

She can also look at how decisions about tax relief grants and tax abatements will impact the long-term financial forecast. While these tax abatements and relief grants are specific to Illinois, other states around the country have similar complex and difficult-to-plan-for legislation and finance considerations.

“I was playing with it a little bit last night with some scenarios, and we have the opportunity for a property tax relief grant. We can abate a certain amount over the next two years, and then there’s a different dollar amount that’ll be added to our evidence-based funding. So, if we were to abate over the next two years and then get that amount added to our evidence-based funding, what does that do for us as a district? Where does that leave us? Does it make sense to essentially put the money up front now to recoup money down the road?”

All of these factors provide Dr. Ozimek with the information she needs to decide which initiatives should receive funding immediately and which can wait.

Communicating with the School Board

Forming a financial plan is one thing. Communicating it to the school board is another — and simply dropping a binder full of spreadsheets onto a table isn’t the most effective way to tell a financial story. Dr. Ozimek puts her data into Frontline’s Financial Planning Analytics and can generate graphs to illustrate each budget scenario so the board can make educated decisions.

“When I present my five-year forecast, I’ve put the data into Frontline Analytics, then I’m able to pull charts and graphs so they can see in this scenario, this is what our fund balances look like. If the board chooses to abate the taxes, this is what our fund balances are going to look like. And then I can drill down and show them, ‘Okay, these are what our revenues look like. And these are what our expenses look like.’ I also have the ability to pull more specialized data and look at just one of our funds. I can just look at the education fund and say, ‘This is what our revenues and expenses look like. This is what our fund balances look like.’ It allows me to give them the information so that they can make educated decisions.”

Collective Bargaining Negotiations

These visuals are especially helpful as the board considers bigger projects and considers how to approach negotiations with the teachers union. With Frontline’s Comparative Analytics, Dr. Ozimek can prepare by exploring how nearby districts — or districts of similar size and demographics across the state of Illinois — compensate teachers.

“I also have the ability to generate peer groups, so I can look at data that’s already in there from other districts and pull like districts so that we can see, ‘For small districts like ours that have about 400 students, that have similar needs, what do their salaries and benefits look like?’ So we can make sure that we’re competitive and that if we’re not competitive, what scenarios can I run to try to make us competitive?”

And with Financial Planning Analytics, she can see how certain actions would impact the district’s financial position, such as market adjustments or salary increases.

She said this takes some of the tension out of collective bargaining. When she can show the teachers union — with crystal-clear visuals — how a given increase would impact the bottom line over the next five years, it removes the emotion and centers the conversation on what’s best for everyone.

“I have the opportunity to take the proposals that they would make so that we can see what happens. ‘Yeah, you have a job now, but when the district has to make cuts because they have a negative fund balance, are you willing to do that? Or would you rather discuss it at the table again now and maybe we make adjustments up front?'”

Saving Time, Saving Sanity

Dr. Ozimek said that because the district’s data is already set up in the system when she begins each budget cycle, Frontline Analytics saves her valuable time.

“I’m cutting the time at least in half, if not by three quarters, because just having to take the time to set everything up would take me days… With it already set up in the system, it’s ready to go when I’m ready to go and I can run numerous scenarios. I can predict things a number of ways. I can do it by a percent increase each year. I can do a dollar amount each year. I can do a combination. It makes it much easier to just plug in the numbers and go versus having to set up all the formulas in a spreadsheet.”

Just as importantly, it helps her ensure that the money they spend makes a difference in the classroom.

“It allows us to analyze where our dollars are being spent, and are they being spent on things that impact our students? Are we using our fiscal resources effectively or are we just nickel and diming here and there, and we’ll throw a little bit of money at this and a little bit of money at this, without them being things that really impact our students?”

Analytics for Districts of Every Size

Tools like Frontline Analytics aren’t just for finance departments in large school districts. As leaders in small districts like Fox River Grove will tell you, serving these students is equally vital. That work is often done by people like Dr. Ozimek, leaders who serve in multiple capacities and must squeeze every moment out of every day. Frontline Analytics is one tool that helps her succeed.

“It keeps me sane. It not only saves me time, but it also ensures that I’m capturing everything that I should be capturing and thinking about.”