Follow the Money: What Charter School Financial Reports Reveal About Gaps, Oversight, and Sustainability

About the Webinar:

This data-driven session provided charter school leaders and board members with essential insights into interpreting financial reports and using financial data strategically to ensure school sustainability and identify potential problems before they become crises. Thibaut Delloue, Policy Fellow, and Curtis Fuller, Chief Operating Officer at the Florida Charter Institute, demonstrated how to read and analyze the key financial statements that charter schools must prepare—including balance sheets, income statements, cash flow statements, and budget-to-actual comparisons—and explained what these reports reveal about a school’s financial health, operational efficiency, and long-term viability. The presenters emphasized that financial literacy is not optional for charter school governance; board members and administrators must understand fundamental financial concepts, recognize warning signs in financial data, and ask informed questions to fulfill their fiduciary responsibilities. They walked attendees through real (anonymized) charter school financial reports, highlighting both healthy indicators and red flags such as inadequate cash reserves, declining enrollment affecting revenue, unsustainable debt loads, administrative cost inefficiencies, and gaps between budgeted and actual performance that signal planning or management issues.

Delloue and Fuller provided practical frameworks for assessing charter school financial sustainability, including key financial ratios and benchmarks that boards should monitor regularly, such as days of cash on hand, debt service coverage ratio, current ratio for liquidity, and the percentage of revenue allocated to instruction versus administration. They discussed common financial challenges charter schools face—including facility costs consuming disproportionate resources, unpredictable enrollment fluctuations, delayed state funding creating cash flow problems, and difficulty building adequate reserves—and shared strategies for addressing these issues proactively. The session also examined the oversight role of authorizers, auditors, and state agencies in monitoring charter school finances, explaining what triggers heightened scrutiny and potential interventions when financial problems emerge. The presenters emphasized the importance of transparent financial reporting, regular monitoring throughout the year rather than only at fiscal year-end, scenario planning for enrollment changes, and maintaining appropriate internal controls to prevent fraud or mismanagement. They also addressed how financial performance connects to school quality, showing that while strong finances don’t guarantee academic success, financial instability inevitably compromises a school’s ability to serve students effectively. Attendees left with enhanced financial literacy, practical tools for monitoring their schools’ fiscal health, and understanding that following the money through careful financial analysis is essential leadership work that protects the school’s mission and ensures resources are used effectively to benefit students.