August 18, 2016 5 min to read
Principal- The New CFO
Category : Governance
Author: Ms Ritu Huriya
Changing role of the Principal
Under the Principal’s purview in the past
A school principal is a spokesperson and face of the school. S/he is in direct contact with parents, students and others stakeholders of the school. A school principal is well aware of the current requirements of the school since s/he manages all day-to-day activities of a school. In the past, a Principal was given the responsibility to ensure academic excellence of the institute only, while most other functions were managed externally. However, with the changing scenario and the changing mode of leadership, the Principal today, must oversee the institution from a wider perspective encompassing staff retention, budgeting, financial management and revenue generation, among others.
Under the Principal’s purview today
The K-12 landscape is transforming rapidly with increasing demands from all stakeholders. Therefore, the Principal of today must be given the independence to play an active role in financial planning, accounting, analysis, action etc. for the institute. Furthermore, financial literacy forms the basis for budgeting requirements and for financial maintenance.
Financial Literacy empowers the school principal to approach the management and make decisions related to allocation of resources which includes knowledge technology, power, material, people, time & money. This would prove to be fruitful since the Principal truly knows the school and its requirements. A responsible school principal should work with others in such a way that it satisfies the needs the students parents, staff members and community at large.
So far, the school principal was a manager whose role in the school was to ensure that academics and co-curricular activities are in place and according to the decided schedule. But today, the roles and responsibilities of school principal is changing and in order to be better managers and better leaders, they must also take up the responsibility of financial management. So, what is the need for this change? A school principal is the head of the school and has to consult with all stakeholders for the financial decisions of the school. In most cases s/he may not be a decision maker and cannot make any changes is the school environment according to the requirements and changing circumstances due to inadequate knowledge around the areas consulting finances. If a school principal is not given financial independence s/he is no longer able to see himself / herself as the authority figure and the role is reduced to a coordinator or mediator.
At the school level, the principal is a single person responsible for managing the school and the hierarchy looks somewhat like the below:
Director General at state level
DEO at city level
Head of departments in the school
Given the responsibility of Financial Management, the Principal’s area of work is broadened and the resources can be distributed properly. Outlined below is a simple approach, called the KASH approach for the Principal to gradually take up the role of an acting CFO.
1. Start reading personal finance sections by experts
2. Take an online course on Personal Financial Management
3. Know your personal ‘current state’ and ‘desired state’
1. Have a positive approach towards money: ‘Talk the talk’
2. Ask your self: Is it a ‘need’ or a ‘want’?
3. Dig deeper
1. Household budget: Make it, Follow it !
2. Assign all your finances; don’t leave a penny unassigned
3. Use apps and online tools
1. Pay yourself first: Expenses=Earning-Savings
2. Review household budget regularly
3. Paying bills on time
The principal knows about the requirements for improvement in the infrastructure of the school since s/he is in direct contact with parents, teachers & students. Moreover, s/he also well understands about the resources required for the improvement in academic standards. A basic knowledge of financial budgeting can help the principal make wiser decisions to provide the students and learners with the latest technology for enhancement of learning. Providing all these requires financial management which can be managed easily by the Principal.
The school principal is aware of various requirements of different age groups of students of different grades. S/he must therefore allocate funds in the financial budget for the resources which could be used for the development of creative thinking in students. A school Principal can contribute significantly to maintain a good learning environment with the help of available resources.
Sports and Recreation
The school Principal is well aware of the various sports activities which are necessary for physical development of children. S/he keeps some space in the financial planning for the physical education of students since this is an important milestone for development.
A school principal also knows about the requirements of the teaching and non-teaching staff. S/he is an instructional leader managing the technical core of the school, the whole process of teaching and learning and manages both curriculum and human resources. How does one manage the HR Department or Administration without basic financial literacy? Therefore, it is must for a school Principal to know the detailed procedures of planning and budgeting. Apart from this, a School Principal is also responsible to create the best learning environment with minimum resources and financial literacy would only aid this.
The empowered Principal has larger sets of responsibilities and must be able to take up the following roles:
Mentor and guide the team
Help in personal and professional financial planning
Be a Chief Financial Officer in School
Enhance KASH (Knowledge, Attitude, Skills and Habits) in children
Every coin has two facets. While basic knowledge and financial literacy is important with the changing role of the principal, excessive involvement in this area may lead to a distraction from core areas for the Principal. A Principal has to take care of academics, teacher performance, student discipline, co- curricular activities, examination and evaluation system and must integrate a basic sense of personal and professional financial management into his/her domain. A school Principal’s suggestions for improvement in the working of a school must be taken into account. This must be accompanied by an expert opinion in finance which will help in budgeting and financial management. Financial literacy has become an important part of all job profiles and it has to be inculcated right from the school level.