Leaders’ Challenge 1: Strategic Use of Resources
Year after year, we just throw money at things, without even knowing how much money we have spent in what areas and what impact all that money has had on which students. With growing student needs and a tighter budget, there is a dire need for a better process and better data to improve leaders’ capacity for making informed budget decisions.
– A district leader
Strategic budgeting rests on not only a vision for the future but also timely and accurate analysis of past spending with regard to amount, reach, impact, and efficiency. In most school districts, unfortunately, such information is not readily available for funding priority and budget decisions. Cycle-based Budgeting (CBB) attempts to fill this void by creating an information system through which spending, strategic priorities, and impact are linked and tracked. Analysis of this data provides district leaders with rich information including:
- How much money is currently being and has been spent on what priorities
- How many students with what characteristics are currently being served and have been served over time
- What impact the spending has had on those students
- Cost-effectiveness of different spending items
- Coherence and duplication in the spending
This powerful information puts district leaders in a much stronger position to make informed decisions about district priorities, strategies, and implementation.
Leaders’ Challenge 2: Effective and Efficient Use of Resources
It is always a struggle to find money to fund new innovative programs while some legacy programs, which are either ineffective or no longer aligned with the district’s strategic vision, are funded year after year. It takes more than just courage and determination to tackle this issue. Some systematic change in how we do budget is needed to help leaders make tough but right decisions.
– A district leader
Cycle-based Budgeting (CBB) helps districts track and return on investment in each of those areas. This information and the process empower leaders to make informed budget decisions and feel easier and more comfortable to say “No” or “Yes, but …” All of this is achieved by: 1) identifying an owner for each program, 2) having the program owner specify measurable goals to achieve, and 3) assigning an investment cycle for achieving those goals. With the support of , a program is automatically subject to review at the end of its investment cycle. Whether the program goals are achieved will impact the continued funding support.
By setting expectations at the beginning and demanding accountability at the end of the investment cycle, CBB transforms recurrent spending on programs . Leaders get a clear picture of where money is spent and the impact of that spending over the years. The cumulative evidence makes it harder to defend and easier to say “No” to an ineffective program. More important, leaders will be able to allocate and re-allocate resources to achieve the organization’s goals and missions.
Evaluators’ Challenge: Data-driven Decision Making
I spend a great deal of time and effort conducting rigorous evaluation studies to provide scientific evidence about program effectiveness for leaders. However, my work is rarely put to use and has had little impact on programs. In fact, I am not sure whether my reports are even read. I don’t feel what I am doing is important here.
– A disheartened evaluator
Evaluations are unlikely to have “teeth” when program outcomes are not tied to budget decisions. In Cycle-based Budgeting, cost-effectiveness will be at the center stage when making budget decisions for programs at the end of their investment cycle. In addition to program cost-effectiveness evidence, evaluators should also produce cost-benefit analysis data, which is another part of the equation when leaders make budget decisions.