What happens when US public education experiences the most seismic shift of funds ever seen?
As school district leaders and administrators face the looming expiration of the Elementary and Secondary School Emergency Relief (ESSER) funds in 2023 and 2024, many are taking a hard look at their bottom line.
School administrators are much more selective regarding educational products and curricula. They want viable tech resources with high adoption and customer retention rates. With the unstable economy, teacher shortages, and expiring funding, districts have pumped the brakes on their heavy-handed pandemic spending. Schools must exercise even more discernment in how they allocate resources moving forward. An Enterprise Resource Planning (ERP) solution can assist school districts in being more than ready for the drying up of federal funds.
Congress passed three pieces of legislation due to the pandemic: CARES Act, CRSSA Act, and ARP. Each legislation has its own ESSER fund: ESSER I, II, and III, respectively. These funds must be obligated by September 2022, 2023, and 2024.
ESSER funds provide support to K-12 public schools. Many districts used ESSER funds to purchase technology for remote learning, improve air ventilation and filtration systems, and hire additional staff members. While it's not necessarily a shock to district leaders that these funds have an expiration date, they will need to begin planning now to:
With a recession, districts must tread carefully in using funds to pay for personnel. According to EdWeek Market Brief, educational consultants advise school districts to spend their funding sources on infrastructure and large, one-time costs instead of ongoing salaries and benefits for staff positions.
The best predictor of what's to come is to examine past funding cliffs in the wake of a cooling economy. This phenomenon has been around for a while, and districts have had to pull at their purse strings to bear the brunt of a funding freeze and recession.
During the Great Recession of 2008, many states experienced significant budget cuts, leading to many funding cliffs. Many schools struggled to maintain programs and services, leading to teacher layoffs and larger class sizes. New York state, for example, was forced to cut education spending, which led to widespread layoffs of teachers and school staff, larger class sizes, and program cuts. In 2009, the Rochester City School District laid off over 200 teachers due to budget cuts. These budget cuts and layoffs didn't end in one year, either. The New York City public school system made significant cuts in the following years, with a proposed dismissal of over 4,000 positions.
So what does this mean for public education in the next five years? Some dark days may be ahead without careful financial planning and school management. Thankfully there are resources to drive better decision-making for schools now. Most districts lacked the proper technology back in 2008; fortunately, that's not the case today.
According to a survey conducted by McKinsey, more than 90 percent of districts have yet to use even half of their funding. Based on this survey, they predict that:
"Nearly $20 billion in ESSER funds may not be obligated by the deadline because of various factors, including administrative hurdles, limited internal planning capacity, and talent and vendor shortages."
When making level-headed decisions with limited planning capacity, an ERP solution can help a great deal. ERPs help school districts plan strategically and efficiently by providing comprehensive, real-time data on the following:
This vital data helps school districts make empowered, data-driven decisions that optimize resources and allocate funding where needed most.
School districts can save costs and maximize outcomes by identifying areas where resources can be better aligned and used, including staffing, facilities, and supplies. An ERP solution can help school districts identify underutilized resources and optimize them to their fullest potential or help eliminate excess weight.
Financial planning becomes more effective with an ERP solution because all financial data integrates into one system. School districts can easily track budget and expenditure data and ensure well-managed finances. In turn, this helps them be better prepared for funding cliffs. Now they can efficiently manage their funds for optimal use. Additionally, with more significant financial insights, districts can plan multi-year budgets in the wake of financial constraints.
An ERP solution creates an environment where data is readily available and accessible. This data can inform financial decisions and resource allocation and identify cost-saving opportunities. With real-time data, administrators can readily view the financials and inform decision-making on fees, asset acquisition, construction, or other initiatives.
An ERP solution can automate repetitive administrative tasks such as contractor management, time-sheet management, and excursion approval. Freeing up valuable resources minimizes time-consuming, mundane tasks so administrators can focus on more impactful, strategic projects. The time saved on administrative work allows district leaders to invest in maintaining effective student engagement and educational programming, even during a funding cliff.
An ERP solution can enhance communication between schools, districts, and other stakeholders. School districts can use grant money management and communication tools to maintain, engage and communicate with organizations and alternative funding sources. Monetary efforts and goals can also be tracked and managed with these resources.
An ERP solution is a valuable tool that can help school districts prepare for funding cliffs. It allows administrators to allocate their resources more thoughtfully and strategically to have the greatest impact on any student's educational experience. Staff can see the real-time status of funding projects as improvements and additions are being managed, and these necessities can be prioritized with complete transparency. With the help of an ERP solution, educators and administrators can plan for successful, sustainable educational programming within their budgets, despite funding cuts.
In addition to these benefits, an ERP solution can also increase data accuracy and transparency, enabling more ethical management practices. This is especially useful in the face of tighter funding-- administrators can learn to do more with less. Employee retention climbs as benefits and features become more tailored to district needs. With dynamic planning, budgeting, and budget projection tools within an ERP solution, district management can make determinations that lead their school to success and sustainability.
To help plan your next technology investment, read the in-depth guide to our product, Sparkrock 365. Let us take you through the benefits of integrating HR management with finances, payroll, scheduling, and the key features we've built to help K-12s thrive.