Transparency and Efficiency In Public Finance

Problem

In preparation for an annual budget vote, a public school district was facing the need to solve an exceptionally challenging deficit within a budget of approximately $130 million. Simultaneously, the District needed to be transparent with voters about the longer-term structural budget issues that would continue to hamstring the financials going forward. School administration officials, elected Board of Education members and community members who volunteer on various advisory committees suffered from:

1. A lack of a collaboration mechanism by which information could be securely shared.
2. A mechanism by which various budgetary scenarios could be rapidly produced, compared and debated.

Solution

ClearFactr was introduced to the district via members of the Budget Advisory Committee. Using the district’s data, a model was produced that matched the district’s reporting formats in describing the upcoming budget year, but also provided five-year projections for the various components of the budget. Unlike previously shared documents such as PDF’s of Excel reports, a fully interactive model allowed various parties to produce and compare their own scenarios for addressing both the current deficit as well as visualizing the effects to the longer-term financial picture. The logic behind the model itself was plainly visible and various key drivers and dependencies easily noted. Approximately 40 stakeholders, including District Management, Board and Committee members, and engaged community members, were given access to the model.

Key Results and Benefits

1. The solution was formally adopted by the Board of Education as the centerpiece for the district’s budgeting and planning process going forward.
2. The model quickly highlighted various key drivers to the future financials and changed the terms of the debate, literally, in the case of ongoing union negotiations.
3. Scenario analyses and reporting presentations went from a turnaround time of a 1-2 weeks to live, intra-meeting experimentation and discussion.
4. The managers of the model were able to track engagement with the model and got a better sense of which individuals required certain types of follow-ups.
5. Comprehension of the budget dynamics themselves and the longer-term budgetary dynamics skyrocketed across the community.
6. Feedback from stakeholders was dramatic and affirming to the purpose of the product.
   1. A district parent, upon seeing a live budget scenario demonstration, publicly remarked:“I don’t understand how the district could run things without having a product like this.”
   2. A Board of Education member commented:“What I love about this product is that it allows us to cut through the emotion and focus on the math.”