Friday, February 08, 2008

More schools outsourcing financial management

Source :

In a time of tight resources and limited experienced professionals, a handful of smaller school districts and charter schools in Minnesota are outsourcing all or some of their financial management work to a private firm.

"Financially, it's one of the smartest things we've done," said Keith Lester, who became head of Brooklyn Center, Minn., schools in 2005. "We're getting more than our money's worth."

School Management Services, based in Rochester, took over Brooklyn Center's finances in March 2006. While the former in-house business manager -- who retired -- had cost the district about $120,000 in salary and benefits, School Management Services costs about $62,000 for the same work, including payroll, budgeting, accounting, enrollment projections, and negotiation and supervision of benefits.

School Management Services might have found a niche -- as baby boomers retire and as school finance specialists become more in-demand and harder for small school districts to retain, said Sue Crockett, executive director of the Minnesota Association of School Business Professionals.

"It's hard to attract someone to a smaller district when they can make more money in other districts," she said. "So I think they (School Management) do fill that need."

School Management Services is run by Todd Netzke, who managed finances for Red Wing schools but around 2005 began thinking about how he could expand a school management business.

Since taking on Brooklyn Center Schools, Netzke's company has grown by nine full- and part-time school finance professionals, who work with 20 traditional K-12 school districts and three charter schools. His largest district is Fridley. His smallest is Grand Meadow in south-central Minnesota with about 360 kids.

Stewartville schools, one of Netzke's clients, recently was honored with a School Finance Award, a state award for districts exhibiting sound fiscal health.

In Fridley, Superintendent Mark Robertson had an accountant and a business manager both leave within a month of each other. He had heard about School Business Management from Lester.

"We wanted stability," he said. "I did not want to start over and retrain someone from the get-go."

School Management does not seek to replace current staff members, said Don Kreye, School Management's director of business development. Usually, a full-time staffer leaves, or districts find they need extra help.

"This is a really new way of thinking about school finance," he said. "Schools outsource transportation, they outsource food service, they outsource copying services. Schools are already doing a lot of outsourcing. We're providing a service to school districts that allow(s) smaller districts to have an expertise they never thought possible at a cost they can afford. That's the bottom line."