Resources on Day School Finance

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All of the documents in this collection were prepared by Sorrel R. Paskin, CMA.


UNDERSTANDING DAY SCHOOL FINANCE

The Financial Structure of an Independent School
This document lists and categorizes the typical resources of an independent school.

Institutional Resources
This chart identifies and categorizes an independent school's operating and capital resources.


EFFECTIVE FINANCIAL MANAGEMENT

Principles of Financial Equilibrium in Schools
This short list highlights five key principles.

A Decision Framework for the Application of Discretionary Funds
This chart illustrates various uses for discretionary funds (unrestricted gifts, bequests, and earned surpluses).

Strategic Indicators for Independent Schools
This document suggests ratios for assessing a school's financial condition.

Provision for Plant Replacement, Renewal and Special Maintenance (PPRRSM)
This document discusses the importance of annual "reinvestment" in facilities maintenance and upgrades.


BUDGETING

Basics of Budgeting
This outline addresses the purpose of budgets, elements of budgeting, the budget development process, techniques for projecting expenses, benchmarking, and performance assessment.

Sample Day School Budget
This sample illustrates financial planning for a two-year period.
Note: For technical reasons, this document contains a blank first page.

Sample Long-Term Budget
This sample illustrates financial planning for a seven-year period.
Note: For technical reasons, this document contains a blank first page.


EMPLOYEE COMPENSATION

Consideration of a Faculty Rank System to Replace the Faculty Salary Schedule System
This paper explains the advantages of a compensation system based partly on performance and partly on years of service.

Employer-Contribution Model Flexible Compensation Plan
This model illustrates various possibilities for employee compensation.


ENDOWMENT

Why Have an Endowment?
This document lists seven key reasons for a school to have an endowment.

Notes on Endowment and Permanent Capital
This paper discusses the role of permanent capital (endowment and quasi-endowment); fiduciary duties and responsibilities; communications, cultivation, and solictation; and suggested policies and procedures.

How Much Endowment Is Enough?
This paper discusses "whether there is an optimum level of support that a school's endowment should provide to the operating budget and, if so, what level of endowment assets will provide that optimum level of support."


OTHER

Financial Accounting in Schools
This paper discusses the objectives of financial accounting in independent schools, where ownership interests and profit in the conventional sense do not exist.

The Productivity Theory of Cost Escalation: Education's "Cost Disease"
This paper explains why productivity growth in education is slower than the economy's average, and why that difference leads to a persistent rise in education's real costs.