Budget advisory committees: making sense of complex issues: administrators from four very different districts in California offer their perspectives on how to work successfully with budget advisory committees.

In January; legislators returned to the lane to resolve the huge deficit remaining in this year's budget. This mid-year reevaluation is one indication of the abnormal budget cycle first experienced in 2000-01. The Legislative Analyst's Office predicts that the state may continue to face annual operating deficits of $12 billion to $16 billion as a result of the continued imbalance between revenues and expenditures. The reality of increasingly limited resources invites districts to review expenditures and the value of each educational program, and sharpen their best decision-making tools.

In order to address the complex relationships involved in school finance, school boards and district administrators often commission budget advisory committees as advisory tools to deal with the gap between the financial support districts plan to receive and what arrives courtesy of the state budget.

Four associate superintendents for business services--from distinctly different Northern California school districts--who have helped to create or guide their committees offer their insights here. These administrators serve in elementary and K-12 districts. Some have previous experience with financial crisis.

Financial pressure

Districts are familiar with the difficulty of balancing a budget with limited resources. These chief financial advisors say it is no different for them. Los Altos Elementary District is facing a $1.5 million budget imbalance. Vallejo City Unified continues to work diligently on its financial plan to recover a 3 percent reserve, and San Juan Unified is concerned with the effect of rising health benefits on its budget. Oakland Unified will continue to work under the guidance of the Financial Crisis and Management assistance Team reward financial recovery.

Decision architecture

All four associate superintendents agreed with the finding from research that group decisions surpass those of individuals. The diverse background and beliefs of members, as well as their expertise in some cases, are the reason these associate superintendents found committees fit the current needs of their district.

Each budget committee serves in an advisory capacity, either directly to the Board or indirectly through the associate superintendent. This allows recommendations from a group that has taken time to study issues at some depth to inform Board decisions. An advisory committee can provide an alternative meeting format for what Peter Senge called a "learning board."

Paul Desario, assistant superintendent for business services in San Juan Unified, a district with more than 50,000 students, appreciates the experience and influence of his committee of site managers. "Committee meetings allow principals to state what it is they need to run the school, as well as what they don't need. Principals have knowledge about programs that we don't have at the district office." He is referring to information regarding program implementation or success that doesn't show up on a balance sheet.

In a large district, this committee also helps to reduce the isolation between the central office and sites. All budget advisory committees meet monthly, either throughout the year or synchronized with the January through June budget cycle.

Committee membership

Randy Kenyon, working in Los Altos Elementary, a district with fewer than 4,000 students, said committee membership for his small district includes representatives from all bargaining units, one or more elementary and middle school principals, three parent representatives, and central office administrators including the superintendent and himself.

Since the committee has been dealing primarily with recommendations for budget cuts, this broad representation not only is used for initial recommendations to the Board, but also has resulted in sufficient trust between members to support administrative mid-year cuts without reconvening.

Districts may also separate their immediate and long-range financial needs by committee. The Los Altos Elementary school board charges a second committee, the Citizens Advisory Committee for Finance, to look for long-range local support for their district. Parents, community members, the associate superintendent for business services and the superintendent belong to this second committee.

Frank Remkiewicz has found that the Budget Advisory Committee in the Vallejo City Unified District has provided some of the best thinking for working with the budget in his district of more than 20,000 students. "The meetings provide a forum where all can listen with attention. It provides some great ideas for us. We tend to throw controversial things their way." Remkiewicz is referring to the fact that an advisory committee has the luxury of isolating and debating the financial aspects of decisions that are politically charged.

Schools needing intervention

Oakland Unified School District is subject to the typical stressors of urban districts. In the case of Oakland, this is compounded by factors that contribute to fiscal instability and lack of organizational focus, according to the executive summary of FCMAT'S Comprehensive Audit. FCMAT's list of conditions most commonly found in districts requiring intervention provide a planning guide in an era where districts struggle to remain solvent.

1. Ineffective leadership

2. Ineffective communication

3. Collapse of infrastructure

4. Inadequate budget development

5. Limited budget monitoring

6. Poor position control

7. Ineffective management information systems

8. Inattention to categorical programs

9. Substantial long term debt commitments

10. Human resource crisis

The level of service for advisory committees in this district has also resulted in a two-tier approach, according to Oakland USD Associate Superintendent Philip White. Two advisory committees--the Measure B Advisory Committee and the District Budget Advisory Committee--merged in 2002 as a single committee advising the Board on general budget and Measure B funds. The Board elected to combine these groups in order to ensure consistent participation.

Last spring the District Budget Advisory Committee made the decision to focus on Measure B funds. Each Board member is allowed to appoint one member from any constituency group to the committee. The superintendent may appoint three members, for a total number of 13 members.

In the midst of budget crisis, it's time to summon a different set of resources to a committee. A group formed and maintained by FCMAT separate from the Parcel Tax Committee is responding to the overall financial health of the district. Expert members of this committee are drawn from School Services of California; the school auditing firm of Vavrinek, Trine and Day; Birchfield Consultants and the County Office of Education. A member of FCMAT serves as committee chair.

The group is able to meet with staff and use their combined expertise to closely review records. Committee members work closely with White to provide accurate, complete information to the Board and superintendent.

Decision-making process

It takes time and training to provide a budget advisory committee with enough information to be able to rely on its analysis. While group membership remains stable over years for some committees, other committees require annual training. Each associate superintendent took responsibility for providing training for their group. This means teaching what Kenyon termed School Finance 101 to group members, helping them to understand how schools are funded, the programs involved in schools, and how a budget works. Members will need to apply the details of many different situations to this framework as they look at aspects of spending.

Advisory Committee members design their agendas based on their areas of concern and the information provided by the associate superintendent, according to Remkiewicz. The goal of the ongoing training is to allow members to understand, explain and predict the effect of their suggestions as they work toward consensus.

Two conditions can make it difficult for advisory members to make decisions. The first is that the environment for a decision continues to expand. New information important to the decision continues to be produced. In the world of budget, it may now include items such as mid-year cuts from the governor. As the discussion continues in the group toward consensus, this information may tend to influence decision-making. Group members will need to review their original objectives in order to stay on task.

The second condition is the cumulative effect of problem-solving. Any decision suggested by the committee rests between the effects of all earlier decisions, and has the potential to influence decisions in the future. In an era of successive budget cuts, the committee must resist the "tyranny of the urgent," take time to reflect on all the available information, acknowledge the connection between previous and proposed decisions, and maintain a broader scope for their decision making.

Politics

Decision makers who attempt to wield influence confirm the presence of politics in budget advisory committees. Each committee experienced the effect of politics. In some cases, a sticky collision of roles happened when Board members attempted to sit in on meetings rather than serve as equal members. Others described the self-interest of parent, citizen and bargaining member or administrative groups as challenging to deal with.

The difficulty of managing the splintering effect of politics on a standing committee while trying to make quality recommendations as a unified group prompted Paul Desario to offer this wise but cryptic advice: "If you have a budget advisory group, get rid of it. If you don't have one, get it." Representatives have to shed their allegiance to constituents in order to work as equal committee members, or the tension that results will affect the quality of group decisions.

Three blunders of decision-making

Paul Nutt (2002) has studied decision-making for 20 years, and concluded that more than half of the decisions made in organizations fail. His advice is to avoid three fatal blunders commonly made during the decision making process:

1. Failure-prone practices. Although proven decision-making practices are well known, they are not commonly practiced. These practices work regardless of the situation. Participation in groups that foster acceptance of difficult budget decisions is a positive aspect of the budget advisory committees. Review the decision making practices within the committee, including the use of structuring devices, as part of the education process.

2. Premature commitments. Budget issues are complicated. Resist the temptation to grab the first good idea. Shortcuts, such as borrowing ideas, must be examined. Avoid a rush to judgment. Allow the group to suspend judgment and reflect as they develop insight.

3. Misuse of resources. Use meeting time to set parameters for what may and may not be addressed, establish objectives, measure benefits and risks, search for ideas or confront the social and political forces facing a decision.

Uncertainty exists in every decision. By avoiding these blunders, committee members can sharpen fuzzy arguments and set precise suggestions before the Board.

Doing more with less

In addition to reviewing district budgets, decision makers can rely on suggestions for reduction and efficiency in publications such as "Doing More With Less," published by School Services of California, in cooperation with FCMAT and the California Association of School Business Officials. The 2002 edition contains more than 450 short-and long-term savings suggestions for providing a quality education program during a period of declining resources. (To order the $35 book, call School Services at [phone] or go to www.sscal.com.)

Each suggestion is prioritized by the amount of savings possible in any of the eight topical areas: central office and administration, personnel services, benefits and risk management, revenue and ADA, instructional programs, interagency communications, Facilities and facilities financing, and general maintenance and operations.

Continuous balancing act

Paul Goldfinger of School Services pointed out that with our current financial conditions, not only the future but even the present is uncertain. Administrators need to stay informed about changes that may affect their financial status and cause their district to become weakened. Budget advisory committees assume an influential role in this continuous balancing act. The four associate superintendents for business services recommend that gathering representatives in a group to advise budget decisions allows members to understand and have voice in the decision-making process.

There is no right way to design a budget advisory committee. What does matter is that the composition of the group matches the needs of each district. This advisory group allows the social and analytical aspects of human nature to combine and make sense of complex issues. The open debate possible during meetings permits members the time to answer the silent "How can I know what I think until I see what I say?" question that discussion requires. While a budget advisory committee is not the only strategy used by financial advisors, Desario's advice may be timely: if you don't have one, it may be time to reconsider.

DISTRICT CHIEF FINANCIAL ADVISORS

County         School District     Student       Associate Supt.
                                   Population    Business Services

Santa Clara    Los Altos ESD        3,931        Randy Kenyon
Solano         Vallejo City USD    20,270        Frank Remkiewicz
Sacramento     San Juan USD        50,266        Paul Desario
Alameda        Oakland USD         54,863        Philip White

Student population figures from Educational Data Partnership Fiscal
Demographics and Performance Data on California K-12 Schools, 2001.

References

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Financial Crisis and Management Assistance Team (2002). Oakland USD Comprehensive Assessment and Recovery Plan. Available from www.fcmat.org/ stories/storyReader$936.

Financial Crisis and Management Assistance Team (2002). FCMAT Predictors of School Agencies Needing Intervention, Available flout www.fcmat.org/stories/ storylReader$73.

Goldfinger, Paul. (2002). Revenues and Limits. Sacramento, CA: School Services of California, Inc.

Harris, Robert. (1998). Introduction to Decision Making. Vanguard: University of Southern Calif. Available from www.vanguard. edu/rharris/crebook5.htm.

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Nutt, Paul C. (2002). Why Decisions Fail. San Francisco, CA: Berrett Koehler.

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Leslie Goldring is principal of Mendenhall Middle School in Livermore.