Better Data Makes Better Budgets

As we enter budgeting season, finance directors, superintendents and other administrators have access to more data sets to make better-informed budgets and resource allocation decisions.As we enter budgeting season, finance directors, superintendents and other administrators are facing dilemmas and difficult decisions. Whether trying to prioritize the allocation of stimulus or other surplus funds, or processing the challenging demands of budget cuts, it’s decision time.

The problem we see is many administrators are forced to make difficult decisions with limited data and incomplete information. As we will illustrate, placing unnecessary blinders on your budgeting can lead to incorrect conclusions and potentially misplaced allocations of resources.

It is, however, possible to remove the blinders that have shackled the hands of budgeters and forecasters for years, allowing them to make the invisible visible.

To help facilitate and illustrate this methodology for finance directors, we are, for a limited, time offering a free report to any school district that wants to see how their budget allocations compare to those of all districts in their regions.

Data as Competitive Advantage

Let’s face it: Schools and districts are in competition. Districts and buildings are competing not only with alternative education options (such as virtual academies, charter schools, private and parochial schools, home schooling and even neighboring schools or districts) for students—they are competing for talent, staff and even resources.

Most often, the competition is right next door. Sometimes it’s within a reasonable commute (car or bus). But make no mistake, talent flight and student migration are very real and likely to remain for the foreseeable future.

With so much at stake, it’s imperative that schools make the most of their strategic decisions—budgetary or otherwise. It’s no longer enough to look internally and self-assess. To do so ignores the data set of competitive forces…the ones pulling at our pupils and educators.

But what if you could not only zoom out from your own spreadsheets and historical data and look at the bigger picture? By this, we mean the much bigger picture of the entire region, to access more information, better intelligence, and greater insights on the drivers of success, student migration and the flow of talent and treasure. How might that change minds and budgets?

(To access your district’s comparison data like the one illustrated above, click here to receive a free report customized specifically to your district.)

What we’d see is not only our data, but our own data relative to the entire region’s—not just a neighbor or two. How do our district’s budget allocations differ or align with where our competitors are spending their dollars? It would make visible the answers to these questions, which would otherwise remain invisible:

• If we have to cut spending, are we cutting in the right areas?
• If we are able to invest stimulus dollars, where are the areas that we need to play catch-up with our peers?
• Are we over-spending or under-spending, compared to our peers throughout the region, in areas like educator salaries, curriculum development, facilities and infrastructure, administrator compensation, etc.?
• How do we know when enough is enough, or too much is too much?
• Are we winning or losing the various battles for students, teachers, principals, outcomes and federal investments?

It’s one thing to have “a sense” that particular line items need bolstering or trimming, and quite another to have access to regional averages that keep no secrets as to how your school or district is stacking up against the competition.

No longer is it prudent to play a hunch. It’s time to play to win.

Keep Zooming Out Until You See All There Is to See

By way of illustration, let’s do a little exercise in data visualization.

Here’s what many finance administrators see when they are considering budget allocations:

Any simple spreadsheet can provide a chart or graph that illustrates what and how you are spending your money now. While informative of past events, such data does very little to inform future decision making. Such a chart is a record of a snapshot in time, not intelligence on what to do next (especially given dynamic budgeting scenarios, such as budget cuts or newfound government funding).

If we are able to zoom out from there, we might get a historical perspective as to how those allocations have evolved over time:

While a bit more insightful, this data set is still backward looking, as opposed to forward projecting. It’s useful to look at trendlines and make conclusions about how things have evolved over time, but such data visualizations are still focused on our own historical spending, which says nothing of how we should be allocating budget dollars moving forward into a new picture of the future.

We’re getting closer, but we’re not quite seeing the full picture yet. Let’s zoom out a bit more.

Now let’s compare our budget allocations with the average of every other district in the entire region. That data looks something like this:

Now we can make a true assessment as to the merits of our decision making. How do our cuts, reinvestments and allocations measure up against what our peers (read:competitors) are spending in specific budget areas?

Case in point: If one were to look only at the first pie chart, one might draw the conclusion that, at more than 60% of the total budget, this district is “over-spending” in the area of instruction, as instruction represents a seemingly outsized portion of the overall budget. Faced with budget cuts, one might make the determination that instruction is an area that could be trimmed back.

But if you look at the second bar graph, you can see, historically, that instruction allocations have actually been going down consistently over time. In fact, we’ve been trimming all along.

Finally, let’s compare how this particular district’s spending on instruction compares to the average of its peers. If you examine the third bar chart, with red representing the sample school district and blue representing the average of all districts in the region, we discover that this particular district is already spending less on instruction than surrounding competitors. Any more cutting on instruction puts this particular district even further behind the proverbial eight ball in investing in student outcomes.

Given the bigger picture, is it intuitive to conclude that this district should be making cuts in instructional budgets? As go the student outcomes, go the students. And if the students go, so does the per-pupil funding. And the situation gets even worse the next fiscal season. And so on.

Get Your District’s Free Report to See How Your Budgeting Stacks Up Against the Competition

We feel so strongly about the power of performance analytics and data visualizations presenting the complete picture that we are offering a free report to any school district that would like to evaluate its own budget allocations against the average of its regional peers.

Your personalized report, customized to your specific school district, will include your version of the above data, along with a breakdown of all spending categories, delivered personally to your inbox in an easy-to-read PDF:

Simply click here to access your district’s Budget Allocation report, at no cost or obligation. You will receive the report within 24 hours, along with access to a live human who will be available to answer questions or help you contextualize your data.

Before long, the invisible will be visible to you. And you will be entering budgeting season armed with greater insights, broader intelligence, and informed confidence. Say hello to easy!

Peter Solar is Director of Client Partnerships with Munetrix, a performance analytics and data visualization solution provider serving school districts and municipalities across the country. He can be reached at psolar@munetrix.com.