Fiscal Governance Best Practices

About the Webinar:

Raj Thakkar opened the session by emphasizing that financial mismanagement remains the number one reason charter schools close, often overshadowing academic concerns. He shared CSBM’s mission to eradicate financial mismanagement through a combination of services, best practices, and training. Thakar stressed that responsible financial oversight should be viewed as equally vital as academic performance, since strong fiscal health is what allows schools to deliver on their educational mission. He also introduced CSBM’s guiding values, which focus on integrity, accountability, and long-term sustainability.

A major theme of the presentation was the importance of clear roles and responsibilities between school leadership, finance teams, and governing boards. Thakar described how effective fiscal governance requires collaboration: finance staff prepare reports, management reviews and approves them, and then the finance committee vets them before they reach the full board. He contrasted this with ineffective practices, such as boards delegating oversight entirely to school leaders, leaders passing responsibility to finance consultants, or boards getting stuck in minutiae like small variances while missing larger financial risks. To avoid blurred lines, Thakar recommended tools like CSBM’s “Blurred Lines” activity, which maps out the top 13 financial responsibilities and assigns them appropriately to staff, leadership, and the board.

Thakkar also highlighted practical governance practices that keep boards proactive rather than reactive. He recommended monthly (or at least quarterly) finance committee meetings, regular review of bank and credit card statements, and maintaining a fiscal calendar that lays out all deliverables—budgets, payroll, audits, and grant reports—across the year. He stressed the need for forecasting, not just reviewing past budget versus actuals, since knowing where year-end surpluses or deficits are headed allows leaders to act before problems escalate. Boards, he argued, should focus on big-picture trends such as enrollment, cash flow, and major variances, rather than small-dollar discrepancies.

Finally, Thakkar encouraged boards to ask the right questions and monitor key metrics tied to authorizer, auditor, lender, and funder requirements. He shared best practices for board reporting, including presenting budget vs. actuals with forecasts, enrollment impact analyses, balance sheets, grant activity reports, and cash flow statements. He also stressed the importance of setting aside reserves and contingency funds, while ensuring that the majority of expenses are allocated to programmatic purposes. The session concluded with references to his book, which outlines 10 common causes of financial mismanagement and 50 remedies, offering charter leaders practical strategies to strengthen oversight and protect their schools’ financial futures.