School Finance

1. School Finance Jim Jeffery, PhD Associate Professor Educational Administration and Leadership Andrews University

2. 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.

3. 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.

4. 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

7. 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)

8. 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)

9. 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”

10. On Average…. • The cost to local churches “runs from 33 percent to 50 percent of local funds; in some cases, it represents more.”

11. Total $$$ spent on SDA Education

12. “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..”

13. And it is quite a business

14. We have lots of schools…

15. With great students….

16. In lots of places…..

17. “Adventist Education is Expensive” • “So what’s a nice church like ours doing in the education business?”

18. I like this reason…..

19. 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.

20. Another Key concept • Elder C.E. Bradford (former NAD President) • Key concept in his mind was “nurturing the culture”

21. C.E. Bradford • “Adventism is handed down both by example and by precept”

22. 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

23. Furthermore • “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

24. 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?

25. 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

26. 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”

27. 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

28. 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.

29. Pacific Union Conference (one example)

30. Degrees, Certificates, Years

31. Salary Calculation Remuneration Factor X Salary Step = Monthly Wage X 12 = Yearly Wage $2090 X 150% = $3,135.00 X12 months = $37,620

32. What role does Finance Play in an SDA school? Budget

33. 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

34. 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

36. 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)

37. Essential info for any school that depends on tuition income Current

38. Cash Received

39. Amount Paid

40. Amount Earned by Students

41. Amount Spent by the Academy

42. Amount Owed by Academy

43. Amount Owed to Academy

44. Money in Checking Account

45. Age of Academy Debts

46. Operating Margin

47. One page summary The One Pager Cash Received Amount Paid by Parents Amount Spent by the Academy Amount Owed by Academy Operating Margin for the Year

48. A Case Study Cherry Lane Adventist School

49. Is this accurate? Yes……. • Personal Experience as a Superintendent • Verified two weeks ago with a Conference Treasurer responsible for overseeing school treasurers

50. 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?