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Financial Management&

Legal Issues

Course for Montessori School Management (CMSM)

For Administrators, Directors, Principals, Heads of Schools, and advocates for excellence in Montessori leadership.

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Introductions

Hello, my name is . . .

What’s yours and what’re you doing?

Bring up Google Doc –>

“CMSM July 2012 - Financial Notes”

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Pie Chart for this morning

Financial Questions

Board Responsibilities

& Structure

Budgets

Reserves & Investments

Prepared Financial

Environment

Legal Issues

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For this morning

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What are your questions?

Let’s list them and who we think is the one responsible.

Financial Questions

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Questions to Think About

1. How are our accounts receivable?2. How are our accounts payable?3. How is our plant?4. Do we have debt? Why?5. Do we have reserves?6. Are we on budget?7. How is enrollment?8. What’s fundraising like?9. Are we in compliance?10.Do we have a multi-year financial plan?

Financial Questions

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Setting the structure

How does the finance process work at your school?Who attends Board meetings?

Who are the finance people on your staff?

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What is a Balanced Business Buddy?

Enabler

Bean Counter

Financial Questions

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Enabler

Bean Counter

Financial Questions

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Enabler

Bean Counter

Financial Questions

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Can you name two requirements for success?

Smart Healthy

• Strategy

• Marketing

• Finance

• Technology

• Minimal Politics

• Minimal Confusion

• High Morale

• High Productivity

• Low Turnover

Financial Questions

Which ONE . . . If you had to choose?

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A Prepared Environment of Confidence?

Financial Questions

Organized Accurate

Consistent

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A Prepared Environment of Honesty & Trust?

Third party – annual audit

Following established policies

Compliance

Consistent reporting

Financial Questions

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You Make the Choice

Part 1 – It’s April 4 and the Board passed a balanced budget in January. Teachers and parents are clamoring to have the excellent, part-time Learning Specialist become full-time. Including benefits, this would mean that the adopted budget would run a $40K deficit.

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Care x 3

+ Fair, Equitable, Transparent

TRUST & Prog. Excel.• Professional Development

• Release time

• Classroom visits - within & outside

• Professional reading library

Employee Care

• Evaluation ≠ Contract

• 1% - 2% of budget

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Legal Issues

• D & O Liability Insurance

• Employment Matters

• Laws Particular to Each State Bylaws, Contracts, Collections

• Enrollment Contracts & Collections

• Compliances

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1) Form 990 – 100 pages, Board review

4) State Department of Education

2) Worker’s Compensation

5) Department of Health

3) Department of Labor

Compliances

Legal Issues

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Legal Issues

• F&S Policy Manual, TF on Personnel, workman comp, no “special cases”

• Letters of Agreement

• Laws Particular to Each State

• Dismissal of faculty or staff

• Child Abuse & Mandatory Reporting - article

• Intake Checklist – Applications, Background Checks & References

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• Deposit

A non-refundable, non-transferable deposit (the "Deposit") in the amount of $_____ must be submitted with this Contract, unless the undersigned have already paid the Deposit. The Deposit will be subtracted from the Tuition owed. Failure to timely pay the Deposit will result in the School withdrawing its offer of enrollment.

Legal Issues

Enrollment Contract

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Full Year Obligation

This Contract is for the full academic year, and the obligation to pay Tuition and Fees is unconditional on and after May 1, 2012 and this obligation cannot be apportioned or mitigated. The School will not make any deductions, omissions, or refunds for absence, withdrawal, suspension, termination of enrollment regardless of reason or cause, whenever such reason or cause may occur, nor will the School characterize any payment of Tuition, Fees or related charges as a charitable contribution to the School. The undersigned acknowledge and agree that the School's expenses do not diminish with the departure or non-enrollment of the Student, and that the School has planned and budgeted assuming the Student's enrollment for the entire year.

Legal Issues

Enrollment Contract

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• Right to Terminate Enrollment / Rules and RegulationsThis Contract may be cancelled in writing without penalty (except forfeit of the Deposit) prior to May 1, 2012.  The School has the discretion to suspend or terminate the enrollment of the Student at any time, or to nullify this Contract prior to the beginning of the academic year. Such suspension or termination may result when: (i) a student, parent, guardian, or other person closely associated with the Student disregards, does not abide by, or fails to meet School rules and expectations, as stated in any handbook or otherwise; (ii) the School determines that a student's conduct or performance demonstrates an unwillingness or inability to positively contribute to the School community; (iii) a parent, guardian, or other individual closely associated with the Student fails to cooperate with the School or demonstrates an unwillingness or inability to positively contribute to the School community; or (iv) the School determines that the Student's continued attendance at the School, or the involvement of a parent or guardian, is not in the best interest of the Student or the School. In addition, this is only a one-year Contract. An offer of enrollment in [one] year does not ensure an offer for any subsequent year. The School reserves all rights to refuse to offer any student re-enrollment in its sole discretion.

Legal Issues

Enrollment Contract

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Going Forward

• Develop your leadership

• Build a vision with employees

• Support school mission

• Promote professional development

• Recognition

• Care for the child

• Do right

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Board Responsibilities

Type 1Fiduciary

Type 2Strategic

Type 3Generative

ParentsFaculty & Staff

Trustees

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Fiduciary Responsibilities

Fiduciary Responsibilities

• Duty of Care

• Duty of Loyalty

• Duty of Obedience

Board Responsibilities

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Fiduciary Responsibilities

Our Board is to our school

as ______ is to ______

Board Responsibilities

The SAT Analogy:

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A, B, Cs of Board Responsibilities

____ CEO Performance____ CEO Support____ Community Relations____ Financial Oversight____ Fundraising____ Legal/Ethical Oversight____ Mission____ Monitor Performance____ Recruitment____ Strategy

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Fiduciary Responsibilities

Board Structure

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Fiduciary Responsibilities

Board Structure

Bylaws & Policies

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Fiduciary Responsibilities

Board Structure

Speaking of “Board” structure. . .

So, Dad, how do you like the iPad we got you?

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Board Structure

Finance Committee

Finance Committee

InvestmentsInvestments

AuditAudit

Management Letter

Management Letter

Financial Policies

Financial Policies

C of IEthics

Investment

C of IEthics

Investment

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• Audit process• PPRRSM• Regularly reviewed quarterly reports – dashboard show example• Share portfolio regularly

Board Structure

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Budget

Budget Cycle

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Compensation & Benefits

• FMLA – no salary but benefits

• 67% on compensation & Benefits

Main Budget Drivers

• Comparables on F&S salaries and benefits

• Approx. 27% dedicate to benefits

• A word on part-time benefits

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Main Budget Drivers

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Financial Aid (not scholarships)

Main Budget Drivers

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Investments & Reserves

• Investment terms• Equities, Bonds, Cash• Allocations• Liquidity• Funds• Reserves• Endowment

• Investments – policies, management of, firms

• Surpluses – SSIPs process

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Investments – Non $ assets

• Standards• Accreditation• Admission selectivity• Learning Support Resources

• Physical Plant

• Program & Philosophy• Professional Development• Montessori Foundation

• Good Marketing & Communications

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• Other issues?

A Few Legal Notes

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Going Forward

• Develop your leadership

• Build a vision with Board and teachers

• Support school mission

• Promote professional development

• Recognition

• Care for the child

• Do right

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Resources

• AMS Website

• Heads’ Listserve

Articles on flash drive

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