Organizational Change

Organizational Change

Organizational Change

Organizational Change by Joseph Tramontana

Organizational change management is leading an organization, team members and individuals through better future outcomes. One way is through a flatter organization where higher levels of management are reduced and combined. In simple terms, senior level managers are required to expand their skills, management and leadership. If we were using education as an example, instead of having a Director of Elementary and Secondary Education you would have one position responsible for both.A flatter organization over time will reduce costs, speed up decision making, communication and team building. A flatter organization is achieved by expanding the roles and responsibilities of senior level management. Senior staff must be made accountable along with combining higher level jobs.

Factors to consider are how fast the flattening of the organization should occur. The best approach is a well thought out plan. Of course, you would not want to combine positions in fields that are totally unrelated. In the example above you certainly could combine two educationally related positions. Certainly the philosophy of managing from the center and implementing a flatter structure could happen immediately. The other factors to consider is implementation. Is the process going to occur throughout the organization or just in certain areas? How much input will employees have in the process?

Flattening or delayering an organization will not be immediately popular with the employees. Therefore, it is recommended to solicit employee feedback, emphasize team building, and the cross-functional aspects. The process itself is full of potential landmines. Managers and subordinates will have to perform more work with no additional compensation. Monitoring employee performance will be extremely crucial. Organizational Change Management aligns and integrates teams and manages employee change through feed back and measurable performance.

Joseph Tramontana School Business Administrator

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Budget Forecasting

Budget Forecasting

Budget Forecasting

Budget Forecasting by Joseph Tramontana

Financial forecasting involves quantitatively projecting changes in future operations while analyzing the impact of trends and economic data. Current and historical data are used to estimate changes that may dramatically affect a school district’s ability to meet its goals. This is an important part of the planning process.Financial forecasting is important for several reasons.

Forecasting facility related issues, by quantifying future costs, is essential for both short term and long term planning. At some point if these issues are not addressed in the budget cycle they will eventually force a district into making emergency decisions. Forecasting can also identify trends that bring issues to the forefront that must be analyzed and evaluated during the budget process. Is revenue going down or is it stable? Are we containing salary and benefit costs or are they increasing by double digits? Finally, forecasts provide insights into important issues allowing administrators to be proactive instead of reactive. Forecasting is particularly important in setting a baseline during the budget process. Projecting student enrollment is critical in determining the costs of educational programming. Critical revenues such property taxes, surplus funds, and salary related expenses give a school district a baseline to begin building their budget. Salary and benefits are legal commitments that cannot be ignored.

Budget forecasting is an ongoing process and a critical part of budget development. Forecasting creates a model for reasonable assumptions to be made during the budget process. Projecting student enrollment, tax revenues, fund balance, salary and benefit increases are key elements in establishing a baseline for school districts. In addition, forecasting provides financial impact analysis that can be combined into the development of the budget. Current budgetary decisions should be evaluated for their long-term impact.

A variety of financial and related data are used for budget forecasting during the budget development process. These forecasts include, but are not limited to:

Enrollment – How does student enrollment impact state aid, class size, and future construction projects? Is their adequate space or too much?

Revenue – This really comes down to property taxes, state aid, and fund balance. A projection of three to five years is always a good idea.

General Fund Expenses – Salaries, contracts and benefits compromise close to ~80% of the budget. The projections of potential retirements, contracts and benefit trends should also be projected out three to five years.

Capital Costs – A long term facility plan and comprehensive maintenance plan are mandatory in all districts. What are the expenses to maintain school buildings and what capital projects need to be considered?

In preparing forecasting models, basic assumptions need to be made. These include levels of state and federal funding, inflation rates, class sizes, and surplus levels, etc. Historical data is used from a variety of sources to aid in the development of these assumptions.

Joseph Tramontana School Business Administrator

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Negotiations and Handshakes

Handshakes and Negotiations

Negotiations and Handshakes

Negotiations and Handshakes by Joseph Tramontana

When they require higher stakes, negotiations require a lot of detailed prep work by each party. Consider the recent negotiations over Iran’s nuclear program. Just before the controversial talks began; the U.S. President and Iranian President had one subject on the program. The one subject was organizing a handshake (1). Folks make presumptions about each other’s intentions based upon first impressions. This is the time it takes to form opinion’s regarding likeability, integrity, and capability.

Handshakes and eye contact display positive first impressions. In one research study, a firm handshake was positively linked to extraversion and psychological expressiveness and detrimentally related to shyness and neuroticism. Another study discovered that people that have a firm handshake and make eye contact receive greater job performance and interview ratings. Throughout many cultures, shaking hands at the beginning and end of a negotiating session communicates a need to interact and get to settlement (1).

In one study, carried out at Harvard’s and the University of Chicago; pairs of executives were asked to bargain a hypothetical real estate property deal. The execs had to negotiate one topic; the price of the land. One one-half of the executives was provided particular instructions to shake hands, and the other half were given no guidance. The bottom line is the side that was asked to shake hands bargained a much better win-win scenario as compared to those that did not (1).

Negotiations are difficult and controversial. There are high stakes and emotions involved. It is important to recognize how important human emotions are in the entire process.

(1) “To Negotiate Effectively, First Shake Hands – Francesca Gino …” N.p., n.d. Web. 8 June 2014 .

Joseph Tramontana Business Administrator

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Leadership Skills

Leadership Skills

Leadership Skills

Leadership Skills Critical for Success by Joseph Tramontana

There are many leadership skills which are critical for success. How many times do we review these skills and integrate them into our daily life? We can all use some practice and this list is a great start.

Delegate

The first step is to identify the strengths of your team and know how to capitalize on them. Communicate with your team and find out what their capabilities are and what they actually enjoy doing. Matching up skills with preferences leads to a happy employee and successful team member. Do not get in the habit of micro managing. Delegate appropriate tasks so you can focus on the big picture and your most important functions.

Communication

Clear communication with your team is vital to success. Your plans and vision may be clear to you, but is it clear to your staff? When was the last time you had a deep conversation to make sure they really understand? Pay close attention to their body language to make sure they really understand.

Humor and Confidence

You may lose a major account or your building may have a flood. If your in business long enough, unpleasant events are bound to happen. However, if you panic your team may quickly become upset and discouraged. Stay calm, cool and collected and keep smiling. This attitude will become contagious and will get you through rough periods. There may be days where your future is uncertain and your plans have changed. This is a fact with any organization, so the critical thing is not to panic. A leader’s job is to solve difficult problems while maintaining morale.

Commitment and Intuition

If you expect your team to produce quality work than you must lead by example. Let your team see you work right alongside them, even if the task is unpleasant. Show that hard word is being done on every level and this will inspire and motivate the rest of your co-workers. If you decide to set up a time to socialize with your staff, stick with it. Commitment shows through on every level.

Decisions are not always so straight forward. There are times when you must make important decisions quickly. This is where your creativity and intuition will prove to be critical. During these times it is important to think outside the box and to choose the best option. Trust your intuition and instinct, because the world is filled with uncertainty and risk. There are times when you will lead a team through uncharted waters and there are no maps to show you what to do. When the unexpected occurs, your team will look to you for guidance.

Recognize

Everyone may not want to admit it, but on some level they want and need to be appreciated. Make sure you personally take the time to recognize employees that work hard and are doing a great job. The recognition can be formal or you can just stop by their cubicle and personally have a few kind words. It is amazing how little time can go so far.

Take some time to reflect on these leadership skills and integrate them into your daily routine.

Business Administrator Joseph Tramontana

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Government Fund Accounting

Government Accounting

Government Accounting

Government Fund Accounting Principles by Joseph Tramontana

Government Fund accounting always begins with basic principles. Formal governmental accounting started in 1934 and was formerly established as the Governmental Accounting Standards Board (GASB) in 1984. The GASB functions under the guidance of the Financial Accounting Foundation. The GASB is the primary accounting financial reporting standard for all local governmental bodies. The American Institute of Certified Public Accountants (AICPA) reaffirmed the GASB’s authority by designating the GASB as the body to establish financial accounting principles for local governmental entities.

There are twelve basic principles of accounting applicable to local governments, but today we will start with the first two.

Principle 1 Accounting and Reporting Capabilities

A governmental accounting system must make it possible both: (a) to present fairly and with fully disclose the financial position and results of financial operations of the funds and account groups of the governmental unit in conformity with generally accepted accounting principles; and (b) to determine and demonstrate compliance with finance related legal and contractual provisions.

Principle 2 Fund Accounting Systems

Governmental accounting systems should be organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self balancing set of accounts, recording cash and other financial resources, together with all related liabilities and residual balances. To put it simply each fund must be in balance. If you have cash coming in, which is an asset, there must be a corresponding liability that balances out. If the expenditure is less then the remainder is called “Fund Balance.” Assets = Liabilities + Fund Balance. In many ways this form of accounting provides greater detail than private sector methods. All local government budgets are all based on Fund Accounting Principles.

Fund financial statements should be used to report additional and detailed information about the primary government, included its blended component units. The largest fund by far is the government’s general fund where you will find salaries and benefits and all major governmental operations.

Joseph Tramontana Hamilton New Jersey

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School District’s Financial Obligations

Financial Obligations

School District’s Financial Obligations

School District’s Financial Obligations by Joseph Tramontana

A straight forward way to measure the financial health of a school district is to measure its short term obligations. There is a relatively simple financial ratio that anyone can use to assess the financial health of a government entity. The way you measure short term obligations is you simply compare current assets to current liabilities. The question then becomes does your district have enough liquid resources to cover its obligations due next year? I would only include government activities, because business operations generally do not support the general fund.

When we speak about liquidity we are talking about cash and/or money market instruments. This assumes that current receivables can’t be liquidated quickly enough to cover current liabilities. This is a more conservative indicator of your district’s ability to meet its financial obligations. This is why we use cash and money market instruments as benchmarks.

Current assets that are three times the amount of current liabilities appears to be a healthy ratio but ultimately this is best left up to individual districts as this can vary greatly district to district. Once a baseline is established it is beneficial to compare the ratio to see if a district’s financial condition is improving or worsening.

This is one useful and straightforward way of analyzing the financial health and conditions of a school district.

Joseph Tramontana Business Administrator Hamilton NJ

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Common Core Update

Common Core Standards

Common Core by Joseph Tramontana

The Common Core debate in Indiana rages on. Indiana was the first state to opt out of Federal Common Core standards in favor of a local based program. Critics are questioning if they planned the move properly. Indiana first signed up for the Federal Common Core program in 2010, in order to secure “Race to the Top” Federal Funding. The application slowly fell apart mainly because of the fierce resistance it met from powerful teacher unions (1). Indiana’s governor at the time, John R. Gregg, was a proponent of Common Core and when he lost his election bid Common Core lost much of its political power.

The Federal Government, at the same time, gave States the opportunity to opt out of the poorly designed “No Child Left Behind Act”. The caveat was that now they had to agree to strict federal monitoring requirements. Indiana is now scrambling last minute to make sure their local Common Core program meets Federal Guidelines. Indiana is considering doubling or tripling standardized tests for their students in order to remain in compliance (1).

Indiana is now getting criticized from local common core advocates because their home grown program apparently is almost exactly the same as the Federal Government’s Common Core. In addition, they are going to spend millions in implementation costs (2). A Common Core critic Sandra Stotsky, a professor in Alaska, said state officials have so far created a “warmed-over version of Common Core’s standards” for English language arts. Concern, she said, comes from a state analysis that the source of proposed English standards for Grades 6-12 is more than 90 percent from Common Core (2).

Indiana Common Core proponents may have reacted too quickly and now developed a program that it not much different than the program they were running from.

(1) http://bit.ly/1m9a585 National Review Online
(2) http://indy.st/NI0Sa5 Indiana Star

Joe Tramontana Hamilton New Jersey

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Political Barriers to Change

Political Barriers to Change

Politcal Barriers to Change

Political Barriers to Change by Joseph Tramontana

The political barriers to changing schools. School districts may have the best plans and ideas, but you must have cooperation of the governing body. One can hope that school board members will make the best decisions for the students, but many times that is hardly the case. The structure of the School Board election cycle does not help matters either. School Board elections are every year and many members will make decisions based upon winning re-election. Special interests also can play a huge role such as powerful teacher unions and political parties. The pressure can be insurmountable.

In most cases, there has been a lack of citizen participation is School Board Elections. Elections that were held in April, for the last decade, had extremley low voter participation. Does this lack of participation mean the voters really don’t care? It is difficult to say, but the data is hard to refute.

I am also not a proponent of government enforcing decisions, but I in some cases it can be very helpful. For example, many school districts could not contain property taxes, salary increases and/or benefit costs. In New Jersey this problem was corrected through legal powers and this forty year problem was solved. Property taxes are now capped which in turn reduces salary costs and employees are now mandated to pay more for their benefits.

The same type of intervention can be applied to school board member selection, which could provide for better governance. Legislation could be passed allowing the Town’s Mayor to appoint school board members along with certain restrictions. The restrictions would mean that a broad range of community leaders would need to be represented. Here is the potential breakdown for a district with nine board members:

• Local PTA President or delegate
• President, Chamber of Commerce or delegate
• Republican Party Appointee
• Democratic Party Appointee
• Private sector representative
• Teacher Union Representative
• Principal’s Union Representative
• Small Business Community Leader
• Recent College Graduate that attended the local school system

This system would alleviate the political pressure because there would be no more re-elections to be concerned about. The citizens would still play a large role through electing their Mayor. In addition, elected leaders would not be able to say; “Well we really have no control over the school board.”

Removing the political barriers to change is essential to an effective and productive school district.

Joe Tramontana School Administrator NJ

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Daily Rituals of Great Artists

Daily Rituals

Daily Rituals

Daily Rituals of Great Artists by Joseph Tramontana

This month’s post deals with daily rituals. This topic has been discussed since the beginning of time and I am sure it varies greatly from even the most successful individuals. So let’s examine the schedules and insights of some of the most famous scientists, painters, writers, and composers of the 21st Century.

A workplace with minimal distractions.

Jane Austen never replaced a door hinge so when it squeaked there was always a warning about who was approaching the room. William Faulkner removed his door knob totally so no one could enter and disturb him. Another artist rented a secret office and only his wife knew the address and phone number (1).

I must admit that for those who work in cubicles this can be quite a challenge. I would add to this first insight that an organized workspace is critical to productivity as well. I am personally working on a 30 day plan to keep my workspace completely organized every day. This means no matter how tired I am I put everything back in the same place at the end of the day.

A daily walk.

Charles Dickens walked three hours every day and found that it inspired his writing. Tchaikovsky walked two hours every day but did not return one minute early because he thought it would make him ill. Beethoven took a paper and pen during his long walks in case inspiration strikes (1).

Of course some of us do not have the luxury of three hour walks, but how about thirty minutes? The key is to interrupt the pattern of daily living by walking, preferably close to nature, to clear the mind, body and soul.

Accountability metrics.

A famous writer required that he write at a rate of 250 Words every 15 minutes every day. Hemmingway also tracked daily work counts to make sure he was not slacking off. BF Skinner timed his writing sessions and plotted the number of hours he wrote on a graph (1).

Some managers believe that workers need to “put in eight hours per day”. Instead they should be focusing on the quality of the work and how it impacts their organization. Quality and focused work, with breaks in between, are much more conducive to productivity.

A clear dividing line between important work and busywork.

Long before e-mail there were letters that arrived on a regular basis. Geniuses would divide the day between focusing on productive work such as composing and painting and the rest of the day they would respond to the letters. Others would complete the busy work only after the productive work was done (1).

Unfortunately, we don’t have this luxury as it seems e-mails come in every ten seconds! It is important to have the ability to be able to tune out distractions on a regular basis. Ignore non-emergent e-mails and distractions. Dedicate a time every day and only tackle the necessary daily tasks.

A habit of stopping when they’re on a roll, not when they’re stuck.

Hemingway would stop writing only when he was on a roll. He would leave on a high note and not when he was at a loss for words. Many legendary artists would work hard in the early morning, have lunch and a long walk, and spend time the rest of the day on routine tasks. “I’ve realized that somebody who’s tired and needs a rest, and goes on working all the same is a fool,” wrote Carl Jung (1).

The important take away is that it’s vital to relax and recharge daily. This makes for an effective business owner, employee and parent/spouse. Please remember to incorporate many breaks into your workday. For the managers out there you need to remember this as well. Cutting edge companies like Microsoft have walking trails, basketball courts and onsite fitness areas for their employees. There is a reason why.

(1) http://blogs.hbr.org/2014/03/the-daily-routines-of-geniuses/

Joseph Tramontana Human Resources Administrator

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Statement of Activities

Statement of Activities

Statement of Activities

Statement of Activities by Joseph Tramontana

Last week we discussed the Statement of Net Position. The second financial statement that any hard working citizen would be interested in is called the Statement of Activities. This statement reveals what is costs to provide educational services and determines the tax burden placed on its citizens and businesses in order to finance education. This document also reveals if your school district is raising enough resources to finance its operations (1). The statement of activities really reveals the net worth of individual programs in a school district and their burden to taxpayers. The definition of net worth is as follows: Net worth is the value of all assets, minus the total of all liabilities. Put another way, net worth is what is owned minus what is owed. In business, net worth (sometimes called net) is the total assets minus total outside liabilities of an individual or a company (2).

If you went to your accountant, he or she would tell you to make up two lists; one with annual costs and the other with everything that you earn. The difference between the two is your individual net position. Let’s say you had an adjustable rate mortgage and the rate went from 4% to 7%, your net position would be worse because you interest expense increased. This of course is only true if everything else remained the same.
This concept pretty much holds true for your school district.

The statement of net activities reveals your district’s annual revenue and expenses and any other transaction that increases or reduces its net position. The best example that everyone can relate to is a business type of activity in a school district. Let’s look at a food service program that provides breakfast and lunch for students.

Well there are expenses to run the program correct? Some common expenses include food, salaries for the cafeteria workers, and other supplies like straws and napkins. There are also charges for services. Students and teachers pay for lunch and breakfast that help support the program. The end result ends up looking like this.

Expenses $20,000,000
Charges for Services $21,000,000
Operating Grants $0
Net (Expense) Revenue $1,000,000

In this example the district actually had a positive net position. The program did not have any burden to the taxpayer because the charges “supported” the operation of the program. If last year this program was running at a deficit, we can state there has been a positive change in their net position.
Finally, we can look and see how the district’s overall net position changed from the year before and if we see some dramatic differences we can ask why.

Joseph Tramontana

(1) GASB Governmental Accounting Standards Board ” A Guide to Financial Statements”
(2) http://en.wikipedia.org/wiki/Net_worth

Joseph Tramontana Director of Personnel and Labor Relations

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