The following interview is part of a series of discussions I conducted on the Financial Health of the U.S. Education System. The idea spawned from conversations I had with Jess Gartner, CEO and founder of Allovue, a noted connector in the space bringing voices in financial management together. During last summer’s Future of Education Finance Summit, Gartner popularized the term #EdfinTech and it has been gaining steam ever since.
Introduction – Dr. Lewis Ferebee
One of the most cantankerous subjects among communities is the question of school district budgets. For all the press and nervous feelings around district budgeting, there remains a veil around not only the process, but the actual inner workings of the expenditure process. Much like laws and sausage, few people actually want to know how district budgets are made.
I sat down with Lewis Ferebee, Ph.D., the Superintendent of Indianapolis Public Schools and one of our nation’s rising education stars for some very frank discussion about the challenges and intricacies of the school budgeting process.
Rod Berger: Lewis, I know that we’ve come together around this topic – the financial health of the U.S. education system. I recently read an op-ed you wrote in Indiana regarding your district, Indianapolis Public Schools, and the work and accomplishments you’ve made as a district. Can you give us a backdrop as to what sort of spurred that op-ed?
Dr. Lewis Ferebee: Sure. One of the challenges I think public education has been faced with over the past decade is this question of how much is enough to support our students appropriately. With significant decreases in funding and increased expectations with student outcomes, I think it’s more important now more than ever to re-open the book of transparency on how schools are funded, how dollars actually follow the child, and with parents holding schools and school districts accountable for ensuring those students who need more, get more. If there aren’t enough resources to do these things, we need to precisely identify what those gaps are to call for additional funding. I think it’s been problematic for us to respond in such a way that we garner additional resources because we can’t precisely identify what the gaps are and what we truly believe the funding needs are to support our students.
RB: Should parents and community members across the U.S. be surprised at the lack of understanding of budgets in schools? I find it surprising that we hear districts struggling to be able to grasp and get a hold of where their budgets are and how they then tie that [budgets] to what we’re putting in the classroom. Oftentimes, it seems like, and correct me if I’m wrong; a lot of districts feel like they’re in a marketing position. They have to tell good stories about how much money they’re throwing at their students – and yet nobody wins.
LF: I think a part of the challenge in education, particularly K-12 public education, is most of our resources are tied to people. So, it’s very easy to just communicate why we spend our dollars on staff in schools. However, that’s just a small piece of what actually takes place in terms of funding a school. Some of the questions to consider when funding a school(s) are: What types of positions are being allocated to a building? Is it based on a student to adult ratio? Are you allocating additional positions or resources to a school based on need? I think there is more that we can tell our families [about school funding and needed resources] and I think, more than ever, our community is holding us accountable for proposed resources.
What we do know, especially from the results in the recent piece, is when we spend more, we have gotten better outcomes. It’s just what you are spending your money on- that’s producing those outcomes- is the next question that we must answer. I think it’s incumbent upon school districts and school leaders to be more transparent about how they’re using their resources more strategically to better serve students and families.
RB: What about the training superintendents’ need, in your estimation, to make sure that you can adequately review the books and lead your team to a transparent conversation with the community? Are we equipping our superintendents’ and our district leadership with the skills to be able to live in a very fast–paced educational environment?
LF: I think so. I mean, I don’t think you can do more on-the-job training than superintendents get. I mean, I just think it’s so important that superintendents dig deep into their budgets. That was one of my first tasks in my transition here to Indianapolis. At the time, it was communicated that we had a $30 million budget shortfall. After a couple weeks of investigating our financials, it was determined, and I shared it with the public transparently, that it was a $1 million budgeted deficit and it wasn’t our actual. Actually, in our actual, we were in a situation where we had a surplus – not a shortfall.
I think a lot of that comes through just digging deep into the books. Most superintendents understand that is the one sure-fire way to lose your job. Many of us spend lots of time and hours with our financial leader but we also must own the financials as well. I think it is one of those things where you learn through experience. I don’t know that you can get a lot from a course. Many of us take professional development sessions to understand not only this – our financials- but each state does financial funding differently for schools. So… understanding your state streams, understanding your federal streams are the PD sessions that we all sign up for, but it takes time and the superintendent has to own that. It’s not something that you can just delegate away and not touch.
RB: And that begs the question: What’s the impact then if you dig a little bit deeper on purchasing decisions that have been made under the umbrella of “we’re on a shortfall”, when in fact you’re not? How does that then impact the decisions you make for instructional improvement? I know you were a former instructional improvement officer in your career; does that then sort of raise flags for you in that regard?
LF: Yes, sure. If we know we didn’t have a true deficit, the question becomes, “Why are we overstating our expenditures?” What I determined was we have been overstating our expenditures over time. So… that leads me down the path of thinking we’re budgeting for some strategy or strategies that’s high dollar that we’re not utilizing each year, or there are multiple strategies that we’re building into our budget that we’re not implementing. What do we have in our budget that we’re not doing? Secondly, what’s in our budget that we are doing and are those high-yield strategies?
I think if you don’t have the transparency and details on each dollar, then it’s difficult to determine the return on investment. What we are doing now is allocating real dollars to our schools instead of positions, which will allow us to better evaluate the return on investment for our schools and our district as a whole. A lot of schools and school districts aren’t able to grasp exactly where their dollars are going because in many cases it’s based on a ratio or a number of students in the building.
RB: And to your point in the op-ed, you talk about the need for change and taking hold of that. You said, “The idea that Indiana Public Schools can prosper without embracing change and being unwilling to partner with others is asinine. We cannot address the challenges of 21st century education demands with antiquated thinking.” How much of this is about restructuring the culture and understanding around the financial health of a district and communicating [the culture and understanding] system-wide?
LF: It’s one piece but it has major implications. I believe in the idea that principals now are much more than instructional leaders, they’re operational managers as well. In some cases, they’re quasi-financial managers for their building – equipping them to monitor the resource of their school and communicating to families how their dollars are being spent. Ultimately, we hope that they would have their partners or stakeholders at the table thinking through resource allocation. That would be extremely helpful. I think it’s different than what we have done in the past. I think the more you put your marbles on the table, the more partners will likely come and join in. By putting their marbles on the table with you they allow you to close some gaps with additional resources.
I think the level of stewardship needed by our principals for their financiers is elevated in the 21st century, but I also believe that it is important to have that transparency that welcomes, embraces, and invites others to the table because they can see that you’re an open book. I think it builds confidence and it builds trust. When you have those two pieces together, I think more people are willing to invest in a particular school or a particular initiative.
RB: Let’s dive into defining “others at the table” and what they would then bring from a solution perspective. I find that there are a lot of districts out there that are trying to be progressive in the resources that they pull from in their local community if we’re talking about public-private partnerships. I’d love your comment on that. Also, are we ever going to be in a world where our educational systems and districts can fully embrace the way in which we all experience brands and companies in our own private lives? How can we welcome them into our schools as a means to bring alternative resources to sort of balance it out – when we only have so much money? To your point, we have to define how much is enough, but sometimes we do need additional resources. That can be challenging if we continue to take traditional means and methods of acquiring them.
LF: Right. I think in terms of having partners at the table, first and foremost, we must acknowledge that K-12 institutions cannot do their work in isolation from the community at large. We must acknowledge that we have a resource gap around supporting students who need more, whether it be special education students, our English language learners, or students that are dramatically impacted by poverty. In many cases, the support needed for those groups are not just financial in nature, but time and talent is in play. When you have a transparent way of outlining how you’ve allocated the resources to those challenges, I think, it increases the probability of others being willing to come to the table and offer their financial resources or time and talents. But the door must be open and the transparency must be clear for others to see.
I think once you get individuals at the table, they become vested partners in the process of educating and supporting our students. They can also be a means for even stronger strategic resources and planning, but also bringing other partners to the table. Again, you have to be open and you have to be transparent.
I also think that oftentimes we don’t partner with different groups because they may have a different way of thinking. Sometimes, I think that one-sided mentality of – “we’re this type of school and we’re going to partner with people that support this type of school” – I think it just limits your potential. The crazy thing about education is everybody has been to school – most people have a child in school or they had a child who graduated from school. There are many experts, there’s so many opinions that I think we can’t get caught up in saying, “Well, we’re only going to partner, we’re only going to allow resources from this entity or this individual because we think this should be done this way or that way.” We have to unite around the interest of our students.
RB: Yes. Very well put. Let’s close with this. Obviously, when you walked into Indianapolis Public Schools, you were given a sort of a scary bill, if we want to call it that. To say that there was a $30 million shortfall and the true health of the district was revealed through the investigation of the books in a very meaningful matter. What lesson can other superintendents around the country take from your experience at digging into the books, as unpleasant as that may be for us all on a personal level in our own homes? What lesson can we take from that when we really try to evaluate the health of the financial system with regards to education?
LF: Yes, I think it’s like buying a new house. When you’re going to a new district, you have to understand your bones, your foundation. You must have a deeper understanding of whether there needs to be renovations, what property taxes you have to pay, etc. I think all of the financials of the district must be steady very early on and it’s important for superintendents to do a deep dive.
I think once you’ve done that deep dive, then you’re building a stronger foundation for the future. I believe in transparency and I believe it starts at the school level. In my mind, that is the foundation for a strong financial house; ensuring that principals have 24-hour access, easy access, to their financials where they can communicate with their stakeholders, their parents, and their community – and then elevating that at the district level.
Currently, I believe the dollar has a power of its own. You have to create a system where there’s equitable distribution of resources and you can’t have a system where it’s based on every child gets the same amount of support because we know there are various needs across the district. So, I think that is the layer to ensuring that you have a strong financial standing, but it begins with a deep dive. Start with the school in terms of their access and transparency, and then elevate that to the district and ensure that you have a plan for equitable distribution.
RB: Yes, it makes me think as we close, Lewis, that there are so many innovators and companies out there that want to do business with districts, but they’re always unsure of how to do it. For those groups out there, those innovators, those companies that would like to do business with IPS, what is your message to them?
LF: Reach out. I think one of the best strategies is to reach out to superintendents and share the resources that you have available to support them. I think if you do it in a way that’s rooted in, “This is how I can help improve student outcomes” or “This is how I can support you” versus giving a marketing pitch – I think that would be more impactful in creating a strong relationship.
Secondly, I think you have to be in the midst where superintendents are gathering. There are a number of national superintendent organizations. For example, I’m a member of the Council of the Great City Schools (CGCS). They frequently invite some providers and different organizations that are supporting schools to their sessions. I think you have to communicate strongly how you can support the superintendent in the district.
You also need to be in the room when superintendents are in the room and just share your story. Finally, I think when there’s a successful strategy with a vendor using that superintendent to tell the story of how helpful that resource has been can also be a strong marketing tool because superintendents listen to other superintendents.
RB: Yes. Very well put. Well, it’s been a great pleasure to get to know you. Your approach is refreshing. I think, not only as a parent, but as someone that speaks with folks in education every day, it’s nice to hear that transparency is celebrated and that change is not something to avoid or to shutter at, but to embrace. Thanks again, Lewis.
LF: Thank you.
Dr. Lewis D. Ferebee began his work with the Indianapolis Public Schools in September of 2013, after serving the previous three years as Chief of Staff for Durham Public Schools.
Prior to this, the 16-year education veteran served as Regional Superintendent for Guilford County Schools in North Carolina where he also worked as an instructional improvement officer and school principal.
Dr. Ferebee’s extensive experience in attenuating the impact of poverty on academic achievement boasts strategic turnaround for struggling Title I schools, double-digit gains in End of Course Assessments (ECA) for Biology, Algebra and English, and aggressive reductions in the dropout rate with concurrent increases in the graduation rate as compared to state performance.
Dr. Ferebee earned his doctorate in Educational Leadership from East Carolina University, a master’s degree in School Administration from The George Washington University and a bachelor’s degree in Elementary Education from North Carolina Central University.
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