Leaders to Meet Over School Finances


Snip20160714_3Jess Gartner, Allovue CEO and Founder, spent time with Dr. Rod Berger to discuss district and school finances and the impact quality information can have on critical decisions. Gartner and Allovue are hosting The Future of Education Finance Summit July 22nd in Baltimore, Maryland. Allovue and sponsor, the Reason Foundation, are bringing together key voices representing the United States Department of Education's Office of Educational Technology, district leaders and innovators like Classwallet, LEA(R)N and Noodle Markets. For more information and register click here!


Rod Berger: Well, this should be fun. Jess Gartner and I, chatted a few years ago. I was saying off-air that it felt like it was three or four years ago and maybe it was even less than that. But like you said, being in the entrepreneurial space can be like living in dog years.

But tell us, Allovue is spending to student achievement, which I think is such an innovative idea when we’re looking sadly at the waste in funding and the way it’s managed in education. And I think that’s fair to say around the world.

If you could catch us up on where Allovue is right now in 2016, Jess.

Jess Gartner: Yeah. Well, it’s funny to me that you say it’s an innovative idea.

RB: This is a comedy show [laughing]

JG: Yeah. The fact that we’re saying that this is an innovative thing is sort of part of the problem, right, because we connect spending to outcomes in pretty much every other industry. So education is a little bit behind the curve in that respect. I mean, if you look at how most other industries operate, you are certainly being very critical about where you’re allocating resources and how it’s impacting your bottom line. Now, in education, we say student success is the bottom line, right? The goal should be to allocate resources to promote student achievement. If we are funding resources or initiatives that aren’t moving the needle on student achievement, then we should be doing something differently.

And so, I think it is kind of a new thing to look at those things in tandem, but it’s not revolutionary. It may be new in the education space, but it’s certainly not a revolutionary concept.

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So, I think the last time that we talked; we were in the pretty early stages of product development. One of the big challenges with doing this work in education is that charts of account structures are really complex. It’s a really complex data structure partly because it looks different in almost every school district and it has really complicated hierarchies of data that are also unique pretty much everywhere you go. We worked with districts that have 50,000 or 100,000 unique account codes in their chart of accounts. So, you can imagine managing that volume of data is a pretty herculean task unaided by technology.

But fortunately, computer software is really good at opening large volumes of data and searching through it and filtering it and really getting down to what you need. But one of the other challenges with this is that, depending on your role in the school district, you might be looking at that data from a very different lens. So, a grants manager might want to curate data by grant funds.  He might want to be looking at how are we spending our Title I dollars, how are we spending our i3 dollars, how are we spending our Special Ed dollars. If you are a principal, you want to be looking at your location of dollars, right. You want to be looking at all of the accounts that are allocated to your school.

If you are in teaching and learning, you might want to look at that data programmatically and say, how are we allocating dollars for instruction versus support services versus out of school time, parent engagement? And so, you know, depending on who the user is or who the budget manager is, you’re really looking at that data through a different lens. And typical accounting systems are not built for that kind of analysis. They’re built for state and federal compliance reporting, and even that can be really difficult to collate the data. But they’re built as accounting systems; they’re not built for educators.

However, because those account strings are complex, they contain a lot of really useful data for looking at where dollars are going and where they’re having an impact on schools and communities and students. So we said, how can we take that data and make a laser fast filter for whatever lens you want to apply and then take that data and look at it in the context of nonfinancial data? Everything from, you know, how does our utility spending compare to the square footage in a building, to how does the spending on this ed tech program correlate to the success metrics that we’re looking to see. We switch literacy curriculums, are we seeing the gains in student achievement that we expected to see. Or maybe we’re piloting different instructional strategies or different out of school time strategies and how are we seeing differences in student achievement as a result of that.

We spent about a year of development just working on the importer to be able to pull in all of that data. And then we started working on the front-end goal to make it as user-friendly for educators as possible, so they can really drill down to what they’re looking for in just a matter of seconds. And then we launched in school districts last July. So we’ve been the market for about a year and we’re working in about 10 states right now and I think we’ve seen as many finance systems as the number of states we’re in. You know, my data integration people, are like, “At some point, we’re going to see a duplicate in here,” but they just keep getting new ones and it’s a learning experience. And fortunately, we have not yet run into one that we can’t work with. So that’s the good news.

RB: That is good news.

JG: Yeah. But we imagine at some point we’ll start seeing duplicates. I think we only have one duplicate back end system at this point. But that was the challenge we posed to our product team. We said, “This has got to work with any back-end system, any chart of accounts, any hierarchy structure, we've got to be able to get in there and in a matter of days or weeks, get them up and running, so that they’re getting fresh up to the day data when they log in.”

RB: Jess, what’s been the response from the districts? I mean, have you seen a change or a growth in the way that they even experience Allovue on the front-end? Because I would imagine that there are a lot of different responses to it.

JG: Yeah.

RB: –Yes, it’s innovative, but it shouldn’t be when other industries have been doing this forever. But I would imagine that their questions to you become different as they become more understanding of the power of it. How have you seen growth over time with the people that are receiving it?

JG: Yeah. So what’s been fascinating is that we intentionally made the product flexible for a variety of use case scenarios. And our district partners continue to invent new ones, which is really cool. So we have seen some districts using our correlation analysis tool to look at equity analysis in their district and start seeing how they’re allocating dollars equitably across different populations. So, you know, are they prorating dollars equitably for Title I populations based on those enrollments across schools and sort of doing an equity analysis either to double-check a current funding formula or perhaps propose a new one? We are also seeing districts use it to gauge the usage and effectiveness of very singular programs. So let’s say they launched a new reading program and they want to look at that.

We have districts particularly in California where they are doing the LCAP, the local control plans, where they have to plan how their dollars are linking to their goals for the district. We’ve actually started mapping their chart of accounts to their goals. So it’s essentially a whole second general ledger that is based on the goals and priorities and strategies for the district.

Snip20160713_10So one of the biggest challenges with creating a strategic plan like that is saying, “Okay, well, you know, we have this accounting structure, that’s not really meant to track goals. How do we align that spending and then communicate that with our school leaders and our stakeholders in the community to say this is the goal for our district. These are the strategies we’re employing to accomplish that goal. And here’s how we’re actually allocating dollars and resources to accomplish that goal.” And then throughout the year and at the end of the year, we can evaluate the success metrics that we have identified to see if this is working. And if it is, we can keep investing in these resources. And if it’s not, we can reevaluate it.

So we see a lot of that with our districts in California. And then my personal favorite and really one of the biggest inspirations for founding Allovue is the empowerment piece. I have long believed that principals and people that are closest to students are some of the best people to be making decisions about where resources go, right? They understand what their students need, what their teachers need, what their communities need and they can really tailor those resource decisions to meet those unique needs at their school.

However, if you don’t provide those decision makers with the data that they need, even basic, basic data about the health of their accounts, like is there any money left for this budget, it’s really hard to be successful in that area. And so, particularly in districts where there’s a high level of site-based autonomy, the response has just been overwhelming because, almost overnight, principals are saying, “Oh, my gosh, I now feel so empowered to do this part of my job more effectively. This is the first time I had seen my budget in a format that I can understand. And, oh, I now understand, where these dollars have been going, how they’re separated out."

And what's amazing for us to see is that the quality of conversations between the site-based managers and the central office are completely elevated in like a matter of weeks. We thought this would take a school year to start seeing changes but we have districts where we launched and weeks later, principals are Snip20160713_9calling the central office with high-level strategy questions that they’ve never been able to ask before. And so they’ll start saying things like, you know, “Now, after looking at this and discussing it with the staff at my school, we really think we would much rather move some dollars around and move some budgets around to fund another part-time literacy coach. Can we talk about how I can either co-fund that or do a budget amendment to create that resource in my school?” And just sort of a general awareness of, “Oh, that account is almost overdrawn, I need to either stop spending in that account or do a budget amendment and make some reallocations midyear.”

RB: You know what I love about it, you’re talking there is a fluidity to Allovue and by the very nature of it; you’re not going to stay static. And so much of education has been sort of "we develop it" and then it just stays as some legacy system that should be put in the closet forever. You’re getting data on a day-to-day basis in ways the people interpreting it force a change in the way that you’re even looking at data and building systems, which I think is really, really compelling in a space that has been antiquated for so long.

JG: Yeah. We really believe that the ability to track and monitor your accounts on a daily basis or even weekly is a huge part of moving the needle in this area because, I mean even if you think about, your personal finances, imagine if you only looked at your bank account once a year. That would be a real challenge.

RB: It would. It would. So, Jess, tell us what #EdFinTech is? It was a sort of a hashtag campaign. But I know it’s on your website, so what is #EdFinTech?

JG: EdFinTech. Well, you know, we decided education could use one more hashtag. It was kind of born out of the fact that people did not know what to do with us. People like to put things in categories. And they were like, “You're not really EdTech but you’re not really FinTech.” And people’s heads were exploding because they were like, “We don’t know what category to put you in. We don’t know what hashtag to use.” So I was like, “All right, we’re inventing our own category, our own industry, our own hashtag. It’s going to be EdFinTech.”

And, you know, it really gets to the heart of the fact that traditional FinTech solutions don’t fit education. They just don’t. The needs and the nuances of education finance are just too unique to the traditional FinTech model. But those solutions fall short. And so, the Ed piece is kind of twofold. One is we’re saying, “This is the FinTech solution truly for the education market. This is built for educators, by educators, for education decision making.”

And it also goes to the fact that we also pull education data into balance. So, we are starting to bridge that gap between academics and finance and saying, “These are really not such siloed thinking.” It’s like there is an element where there has to be a crosswalk between them and we can’t make curricular decisions in a vacuum of cost-effectiveness and we can’t make spending decisions in a vacuum of education effectiveness, you really have to have those conversations together. And you can make trade-offs. You can decide, the most expensive solution is the better one for us, but at least know that you’re making that decision and know why you’re making it and know that you might need to make trade-offs in other areas as a result of that.

RB: Yeah. You can make informed decisions. Jess, let’s close with this. Tell us about The Future of Education Finance Summit.Snip20160713_6

JG: Yes. We are so excited about this. This is the first year we’re doing The Future of Education Finance Summit. We’re co-hosting it with some of our friends at The Reason Foundation. We have an all-star roster of all folks in education finance and EdFinTech, including some folks from the U.S. Department of Education, talking about the future-ready framework. We’ve got district leaders, superintendents, CIOs, CFOs, talking about both how they’re using Allovue and other finance frameworks. We’ve got our friends from ERS, Education Resource Strategies, and EdBuild. And Marguerite Roza is doing our keynote from Edunomics, talking about the power of data in the future of education finance.

So it’s going to be an all-star cast for the day. And Cory Turner from NPR’s School Money is going to be moderating a panel of EdFinTech founders. So I’ll be on that with our friends from ClassWallet and Noodle Markets and LearnTrials. So it’s just going to be a great day bringing together K-12 district finance professionals, education finance researchers, education finance consultants, founders, tech companies, all of the above will be there mingling and talking about ideas for innovations and finance.

RB: I get the sneaky suspicion this will grow from one day this year, July 22nd, to maybe a couple of days with many people and topics, right?

JG: That would be a dream. That would be a dream. Maybe our organizer Lisa would have something to say about it.

RB: One can hope, right? Well, I think it’s great. And you can go to allovue.com and check it out. It’s July 22nd in Baltimore, Maryland, the Future of Education Finance Summit.

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