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School Finance. Jim Jeffery, PhD Associate Professor Educational Administration and Leadership Andrews University. You Might Be a School Principal if. You have no time for a life from August to June.

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school finance

School Finance

Jim Jeffery, PhD

Associate Professor

Educational Administration and Leadership

Andrews University

you might be a school principal if
You Might Be a School Principal if...
  • You have no time for a life from August to June.
  • You want to slap the next person who says, "Must be nice to work from 8 to 3 and have your summers free!"
  • When out in public you feel the urge to talk to strange children and correct their behavior.
you might be a school principal if3
You Might Be a School Principal if...
  • You refer to adults as "boys and girls."
  • You encourage your spouse by telling them they are a "good helper.“
  • You've ever had your profession slammed by someone who would never dream of doing your job.
you might be a school principal if4
You Might Be a School Principal if...
  • Meeting a child's parents instantly answers the question, "Why is this kid like this?“
  • You believe "extremely annoying" should have its own box on the report card.
  • You know a hundred good reasons for being late.
  • You don't want children of your own because there isn't a name you can hear that wouldn't elevate your blood pressure
alfred mcclure former nad president
Alfred McClure (Former NAD President)
  • Wrote an Article
  • “What’s a Nice Church Like Ours Doing in the Education Business”(The Journal of Adventist Education, Dec. ’98)
some of his thoughts
Some of his thoughts…
  • “Adventist education is incredibly expensive”
  • “Life would be a whole lot less complicated for many of us if we weren’t.” (involved in the education business)
the scope of adventist ed
The scope of Adventist Ed
  • “Aside from pastoral salaries, education is the largest single item in most conference budgets”
  • “The cost of education represents a financial ordeal for some local churches”
  • “…for the majority of our churches it is the largest single local expense”
on average
On Average….
  • The cost to local churches “runs from 33 percent to 50 percent of local funds; in some cases, it represents more.”
“Adventist education absorbs copious amounts of time. It is not possible to calculate the time spent on the boards”.. finance committees, budget committees, personnel committees, marketing committees..”
adventist education is expensive
“Adventist Education is Expensive”
  • “So what’s a nice church like ours doing in the education business?”
the beginning
The Beginning
  • 1872 first official SDA school organized.
  • Reason?
  • The rationale that won the day was this:
  • “We must have schools to “prepare workers” – pastors, teachers, nurses, missionaries, and later, doctors.
another key concept
Another Key concept
  • Elder C.E. Bradford (former NAD President)
  • Key concept in his mind was “nurturing the culture”
c e bradford
C.E. Bradford
  • “Adventism is handed down both by example and by precept”
adventist education priceless
Adventist education/priceless
  • “I’m sure all of us would give everything we own to make sure our children are with us in the kingdom”
        • A. E. McClure
  • “I am convinced that when history records the defining moments of the Seventh-day Adventist Church, the decision to establish schools will be seen as one of the most dramatic.”
      • A.E. McClure
so where do we begin
So, where do we begin??
  • Today, I would like to look at some of the very practical points of financing Adventist education.
  • I want to start with a “touchy” issue these days… that of salaries.
  • What is the philosophy of paying Adventist teachers and pastors?
the adventist philosophy of remuneration
The Adventist Philosophy of Remuneration
  • The SDA Church has accepted the Gospel Commission as given by Jesus to His Disciples.
  • “Go Ye Into All The World”
  • Proclaim the Gospel of Salvation
  • All of the Church’s organization have one central purpose – The Salvation of Man
the remuneration scale
The Remuneration Scale
  • The Philosophy
  • “A spirit of sacrifice and dedication should mark God’s workers irrespective of the position they hold or the department they represent”
it is a fact of life
It is a fact of life
  • The church pay scale does not alwayscompensate its employees in monetary terms, commensurate with
  • their talents,
  • accomplishments
  • and contributions
it does though
It does though…
  • Provide employees with a modest living income which gives recognition of:
  • Responsibilities borne
  • Preparation undertaken
  • Professional attainment
  • Previous experience and
  • Years of Service.
salary calculation
Salary Calculation

Remuneration Factor X Salary Step = Monthly Wage X 12 = Yearly Wage

$2090 X 150% = $3,135.00 X12 months = $37,620

the monthly financial statement
The Monthly Financial Statement
  • 1. Include with every financial report a summary page (like what follows)
  • So that everyone including those without an accounting background can understand
2 nd 3 rd major points
2nd & 3rd Major Points
  • 2. Reduce the amount of financial detail to only what is needed by the board.
  • 3. Take time to teach board members how to read and understand the financial report. Here is an example of a Summary Page from a longer Financial Report
s u p a
  • Simple (focused and appropriate to the discussion and time limitations)
  • Understandable (written in terms free of accounting jargon)
  • Professional (neatly formatted; easy to read)
  • Accurate (showing current numbers)

Essential info

for any

school that

depends on

tuition income


the one pager

One page


The One Pager

Cash Received

Amount Paid by Parents

Amount Spent by the Academy

Amount Owed by Academy

Operating Margin for the Year

a case study
A Case Study

Cherry Lane Adventist School

is this accurate yes
Is this accurate? Yes…….
  • Personal Experience as a Superintendent
  • Verified two weeks ago with a Conference Treasurer responsible for overseeing school treasurers
what are we looking for here
What are we looking for here?
  • List ALL the financial problems with this scenario
  • What does your group consider to the ONE major problem in this scenario
  • WHY is this one problem the most significant?
28 do s of school finance management
28 Do’s of School Finance Management
  • The school board should adopt a definite schedule of tuition charges, charges for special activities, registration and textbook rental fees, physical education fees, and so on.
  • This schedule should be voted by formal action of the school board and should appear in the minutes. All charges to students should be based on this schedule.
The purchase of major items of equipment and the outlays for improvement of physical facilities must be financed based on definite plans for the cost to be underwritten.
some basic rules
Some Basic Rules
  • It is important that the school funds be kept in a bank account separate from those of the church.
  • The basic rule which should be followed without exception is that all cash flowing into the organization must be receipted promptly. Cash should not be left in the school overnight (unless in a safe).
All incoming cash should be entrusted to a single individual and a separate individual depositing the money into the bank. Thetreasurer need not be involved in those duties.
  • The treasurer is responsible for recording, preparing and presenting the financial statements on a timely basis. In small school settings, treasurers may be involved in both receipting and depositing.
Those disbursements made by petty cash funds, should be documented with a receipt and placed in the petty cash box. This allows the treasurer to reimburse the petty cash box and record the activity in the appropriately area for financial statement review.
Generally, the school principal is authorized by the school board to make routine purchases without specific individual authorization of each transaction and is understood in the school board’s approval of the operating budget.
Also, the principal should communicate closely with the treasurer on large purchases that have been approved by the board. The treasurer needs this information for timing issues and available cash in the bank. Transfers may need to be made before acquisition.
No blank checks are to be issued by the school and turned over to another party to be completed.
  • No blank checks should be taken away from the school or written off the school premises.
the school budget
The School Budget
  • The school budget is to be submitted annually to the school board for consideration and adoption.
monthly operating statements
Monthly Operating Statements
  • Monthly operating statements (preferably with a budget—comparison column for the month or year to date) should be prepared and presented to the school board as a means of comparing actual operating results with the budget.
the principal
The Principal
  • The principal should be separated from any account recording activities affecting the financial statements.
your best friend the treasurer
Your Best Friend - The Treasurer
  • Listen to your treasurer. Find a treasurer that can say NO. Usually, your treasurer wants your school to be financially stable.
the best treasurers
The Best Treasurers
  • The best treasurers are those who are organized
  • reports are presented on a timely basis.
  • bills are paid on time.
  • student accounts receivables are collected quickly
student statements are sent monthly and on a timely basis.
  • presentation of the financial statements can be understood and questions are able to be answered quickly
check signers
Check Signers
  • More than just your treasurer should be able to sign checks.
  • There should be no more than three check signers. This may eliminate disruption to your schools’ financial operation.
14 ways to save money
14 Ways To Save Money
  • Take stock in the old adage “A penny saved is a penny earned”. When you return home from your day’s work, take the change you have in your pockets or purse and stash it away. Then, at the end of the month, deposit that money into your savings account. You may be amazed at the results!
save this much
Save this Much
  • $1.00 a day
  • After 3 years
  • You will earn this much……
  • $ 1,161.00
save this much72
Save this Much
  • $5.00 a day
  • After 3 years
  • You will earn this much….
  • $ 5,807.00
14 ways to save more money
14 Ways to Save More Money
  • Cover Story from The American School Board Journal, May, 1998
  • Turn off lights.
  • Utility bills are the second largest expense for most schools/districts, and the cost of lighting accounts for 40 percent of those utility bills,
turn off the lights
Turn Off the Lights
  • changes can be as simple as turning off lights in a hallway or dimming the security lights after midnight, well after the last employee has gone home
  • Contrary to what you might expect, Broustis says many Seattle schools have reported less vandalism in unlit places.
  • (See cautionary note in article)
change light bulbs
Change light bulbs.
  • You can cut your lighting costs by 50 percent if you haven't done any retrofits in the past
  • She recommends replacing incandescent bulbs and old fluorescents with the new compact fluorescent lights, known as T-8s, which are expensive but pay for themselves in reduced electric bills within one or two years.
check your bills carefully
Check your bills carefully.
  • Mistakes happen.
  • When auditors check past utility bills in districts with 15 to 20 buildings, they routinely spot overpayments of $50,000 to $100,000 per year.
form or join a co op
Form (or join) a co-op
  • School districts are usually eligible for discounts on everything from crayons to telephone service through state procurement systems.
  • But some districts work together to get even deeper discounts.
keep track of what you own
Keep track of what you own.
  • When auditors visit school districts, they routinely advise checking warehouses, selling excess inventory, and reducing warehouse space.
  • That strategy certainly paid off in Chicago in 1995, when the district's management team found more than$250,000 in furniture and school supplies in what was quickly dubbed "the warehouse of waste."
  • (Among the forgotten items: nine pianos, two rowing machines, more than 4,000 chairs, and almost 9,000 desks, all in their original plastic packaging.)
in summary
In Summary
  • God has given our church one of the greatest blessings of all times.
  • The SDA school system is expensive
  • It is time-consuming for principals, teachers, parents & church members.
  • But what about the children of the church?
  • Don’t they deserve the best we have???
rightly trained youth
Rightly trained youth
  • Ellen White, in Education, p. 271, says: 
  • "With such an army of workers as our youth, rightly trained, might furnish, how soon the message of a crucified, risen, and soon-coming Saviour might be carried to the whole world.“
  • Isn’t that our message and mission?