This document provides an overview of a course on financial management and legal issues for Montessori school administrators. The course covers topics such as budgets, investments, reserves, compliance, enrollment contracts, and board responsibilities. It includes discussions of setting budget drivers, the budget cycle, financial aid, investing surplus funds, and legal considerations around employment, enrollment, and child safety. The goal is to help Montessori school leaders strengthen their financial preparedness and legal knowledge.

1. Financial Management
&
Legal Issues
Course for Montessori School Management (CMSM)
For Administrators, Directors, Principals, Heads of Schools, and
advocates for excellence in Montessori leadership. 1

2. Introductions
Hello, my name is . . .
What’s yours and what’re you doing?
Bring up Google Doc –>
“CMSM July 2012 - Financial Notes”
2

3. Pie Chart for this morning
Reserves & Investments
Financial Questions
Board Responsibilities
& Structure Prepared Financial
Environment
Budgets
Legal Issues
3

4. For this morning
4

5. Financial
Questions
What are your questions?
Let’s list them and who
we think is the one
responsible.
5

6. Financial
Questions
Questions to Think About
1. How are our accounts receivable?
2. How are our accounts payable?
3. How is our plant?
4. Do we have debt? Why?
5. Do we have reserves?
6. Are we on budget?
7. How is enrollment?
8. What’s fundraising like?
9. Are we in compliance?
10. Do we have a multi-year financial plan?
6

7. Setting the structure
How does the finance process work at your
school?
Who attends Board meetings?
Who are the finance people on your staff?
7

8. Financial
Questions
What is a Balanced Business
Buddy?
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9. Financial
Questions
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10. Financial
Questions
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11. Financial
Questions
Can you name two requirements for
success?
Smart Healthy
• Strategy • Minimal Politics
• Marketing • Minimal Confusion
• Finance • High Morale
• • High Productivity
Technolo • Low Turnover
gy
Which ONE . . . If you had to 11

12. Financial
Questions
A Prepared Environment of
Confidence?
Organized Accurate
Consistent
12

13. Financial
Questions
A Prepared Environment of Honesty &
Trust?
Third party – annual audit
Following established policies
Compliance
Consistent reporting
13

14. You Make the Choice
Part 1 – It’s April 4 and the Board passed a
balanced budget in January. Teachers and
parents are clamoring to have the excellent,
part-time Learning Specialist become full-
time. Including benefits, this would mean
that the adopted budget would run a $40K
deficit.
14

15. Employee Care
Care x 3
• Evaluation ≠ Contract + Fair, Equitable, Transparent
TRUST & Prog. Excel.
• Professional Development
• 1% - 2% of budget
• Release time
• Classroom visits - within & outside
• Professional reading library
15

16. Legal Issues
• Laws Particular to Each State
Bylaws, Contracts, Collections
• Compliances
• Employment Matters
• Enrollment Contracts & Collections
• D & O Liability Insurance
16

17. Legal Issues
Compliances
1) Form 990 – 100 pages, Board review
2) Worker’s Compensation
3) Department of Labor
4) State Department of Education
5) Department of Health
17

18. Legal Issues
• Laws Particular to Each State
• Intake Checklist – Applications,
Background Checks &
References
• Letters of Agreement
• Child Abuse & Mandatory Reporting - article
• Dismissal of faculty or staff
• F&S Policy Manual, TF on Personnel, workman comp,
no “special cases”
18

19. Legal Issues
Enrollment Contract
• Deposit
A non-refundable, non-transferable deposit (the
"Deposit") in the amount of $_____ must be
submitted with this Contract, unless the
undersigned have already paid the Deposit. The
Deposit will be subtracted from the Tuition owed.
Failure to timely pay the Deposit will result in the
School withdrawing its offer of enrollment.
19

20. Legal Issues
Enrollment Contract
Full Year Obligation
This Contract is for the full academic year, and the obligation to pay Tuition
and Fees is unconditional on and after May 1, 2012 and this obligation cannot
be apportioned or mitigated. The School will not make any deductions,
omissions, or refunds for absence, withdrawal, suspension, termination of
enrollment regardless of reason or cause, whenever such reason or cause may
occur, nor will the School characterize any payment of Tuition, Fees or related
charges as a charitable contribution to the School. The undersigned
acknowledge and agree that the School's expenses do not diminish with the
departure or non-enrollment of the Student, and that the School has planned
and budgeted assuming the Student's enrollment for the entire year.
20

21. Legal Issues
Enrollment Contract
• Right to Terminate Enrollment / Rules and Regulations
This Contract may be cancelled in writing without penalty (except forfeit of the Deposit) prior to
May 1, 2012.
The School has the discretion to suspend or terminate the enrollment of the Student at any time, or
to nullify this Contract prior to the beginning of the academic year. Such suspension or termination
may result when: (i) a student, parent, guardian, or other person closely associated with the Student
disregards, does not abide by, or fails to meet School rules and expectations, as stated in any
handbook or otherwise; (ii) the School determines that a student's conduct or performance
demonstrates an unwillingness or inability to positively contribute to the School community; (iii) a
parent, guardian, or other individual closely associated with the Student fails to cooperate with
the School or demonstrates an unwillingness or inability to positively contribute to the School
community; or (iv) the School determines that the Student's continued attendance at the School, or
the involvement of a parent or guardian, is not in the best interest of the Student or the School. In
addition, this is only a one-year Contract. An offer of enrollment in [one] year does not ensure an
offer for any subsequent year. The School reserves all rights to refuse to offer any student re-
enrollment in its sole discretion.
21

22. Going Forward
• Care for the child
• Develop your leadership
• Build a vision with employees
• Support school mission
• Promote professional development
• Recognition
• Do right 22

23. Board Responsibilities
Type 1 Type 2
Faculty & Staff
Fiduciary Parents
Strategic
Type 3
Trustees
Generative 23

24. Board Responsibilities
Fiduciary Responsibilities
• Duty of Care
• Duty of Loyalty
• Duty of Obedience
Fiduciary
Responsibilities
24

25. Board Responsibilities
The SAT Analogy:
Our Board is to our school
as ______ is to ______
Fiduciary
Responsibilities
25

26. A, B, Cs of Board
Responsibilities
____ CEO Performance
____ CEO Support
____ Community
Relations
____ Financial Oversight
____ Fundraising
____ Legal/Ethical
Oversight
____ Mission
____ Monitor
Performance
____ Recruitment 26

27. Board Structure
Fiduciary
Responsibilities
27

28. Board Structure
B
Bylaws &
Policies
Fiduciary
Responsibilities
28

29. Board Structure
Speaking of “Board” structure. . .
So, Dad, how do you like the iPad we got you?
Fiduciary
Responsibilities
29

30. Board Structure
Finance
Audit
Committee
Management
Investments Letter
Financial
Policies
C of I
Ethics
Investment
30

31. Board Structure
• Audit process
• PPRRSM
• Regularly reviewed quarterly reports
–
dashboard show example
• Share portfolio regularly
31

32. Budget
Budget Cycle
B y Date Task W orkers
Last wk of Oct. Cost Centering with Program Bus. Mgr. and Prog. Dirs.
Directors
Fri., Nov. 11 Budget - 1st Draft with Bus. Mgr. and Head
tuition & salary rates proposal
Fri., Dec. 2 Present to Fin. Com. Tres., Head and Bus. Mgr.
Tues., Dec. 13 Budget Review – 1st Presentation Board
Mon., Jan. 6, 2012 Finalize Budget with Fin. Com. Chair Fin. Com., Head and Bus.
Mgr.
J an. 10, 2012 B udget Adoption B oard
Jan. 13 Re-enrollment Contracts mailed
Feb. 2012 Monitor enrollment/reenrollment Bus. Mgr., Head, Admissions
contracts
Sept. 2012 Revised Budget to Fin. Com. Chair Fin. Com., Head and Bus.
Mgr.
Sept. 2012 Adopt Revised B udget Board
32

33. Main Budget Drivers
Compensation & Benefits
• 67% on compensation & Benefits
• Comparables on F&S salaries and benefits
• Approx. 27% dedicate to benefits
• A word on part-time benefits
• FMLA – no salary but benefits
33

34. Main Budget Drivers
34

35. Main Budget Drivers
Financial Aid (not scholarships)
35

36. Investments &
Reserves
• Investment terms
• Equities, Bonds, Cash
• Allocations
• Liquidity
• Funds
• Reserves
• Endowment
• Surpluses – SSIPs process
• Investments – policies, management of, firms
36

37. Investments – Non $
assets
• Physical Plant
• Standards
• Accreditation
• Admission selectivity
• Learning Support Resources
• Program & Philosophy
• Professional Development
• Montessori Foundation
• Good Marketing & Communications
37

38. A Few Legal Notes
• Other issues?
38

39. Going Forward
• Care for the child
• Develop your leadership
• Build a vision with Board and teachers
• Support school mission
• Promote professional development
• Recognition
• Do right 39

40. Resources
Articles
on flash
drive
• AMS Website
• Heads’ Listserve
40

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