A Deficit of Savvy

This year the Alberta government will spend $5.6 billion educating Alberta’s 590,000 kindergarten through grade 12 students

Jan 1, 2007  

by Marzena Czarnecka

That taxpayers’ money is allocated among 62 public, Catholic and francophone school boards. Factoring in other sources of income, school boards spend anywhere from a few million to a billion dollars a year, as much or more than most corporations. A corporate board of directors overseeing such sums usually skews towards accountants, lawyers and seasoned businesspeople.

School trustees? Not so much.This might not be a problem, except that 28 (43.5%) of the province’s school boards ended the 2004-05 school and financial year with a budgetary deficit. As they wrote their 2006-07 budgets in the spring, many of Alberta’s largest school boards projected or approved deficit budgets: the Lethbridge School Board, $2 million; Edmonton Public Schools, $7 million; Fort McMurray, $1.9 million.

It’s been much worse. In 1999, the Calgary Board of Education incurred a deficit which totalled around $26 million. (That was the year then-Learning Minister Lyle Oberg eliminated school board deficits, giving everyone a clean slate.) In 2003, 56% of Alberta school boards ran deficits, and Edmonton Public had projected a whopping $13.5 million deficit. (It was eventually whittled down to $5 million in conjunction with Oberg’s initiative.)

The numbers are more than a little troubling, according to the Alberta School Boards Association (ASBA), which reported the findings in its spring 2006 research paper “Missing the Mark: Funding shortfalls in Alberta’s Education System.” “While one could not reasonably expect that all boards could run a balanced budget every year, the standard established in 2001 of approximately 10% of boards posting a deficit presents a reasonable and achievable target,” the report notes.

The conclusion drawn by the ASBA report is that “many of Alberta’s school boards are having difficulty balancing service delivery requirements against available funding.” The province’s individual school boards echo that analysis. At least some members of the province’s Progressive Conservative government agree. When the Fort McMurray School Board passed its 2006-07 budget with a $1.9-million deficit, MLA Guy Boutilier vowed to protect the board from being punished for its action. When Alberta Learning kicked in first an extra $8 million for transportation, then $180 million for operating support and school upgrades, and finally $303.3 million for school infrastructure in the ramp-up to the 2006-07 school year, it appeared writing deficit budgets was a negotiating technique to secure more provincial funding.

A fiscally stringent point of view holds that school boards should balance their budgets regardless of any shortfall in funding; that it is their responsibility to fulfill their educational mandates within their known financial limits. The Alberta School Act requires nothing else: it stipulates that school boards must operate within a range of a 7% surplus to a 3% deficit. A projected deficit must be approved by Alberta Learning, along with a repayment plan. Failure to balance the books suggests either disregard of their financial obligations or the inability of the trustees to competently oversee the budgets with which they are entrusted.

Both of these explanations strike at the heart of school board governance. So how does Alberta school governance stack up in a governance-obsessed corporate world still sorting through the implications of the United States’ Sarbanes-Oxley Act, the British Higgs Report and Canada’s less toothy equivalents?

Overall, not badly. Despite Alberta school boards’ collective penchant for writing and passing deficit budgets, only five boards currently have accumulated deficits. In all of these cases – including the “surprise” $8.8-million net deficit experienced earlier this year by Edmonton Catholic Schools – the overspending went, for the most part, into classrooms, and never into management pockets as per some of the corporate governance scandals in Canada (Hollinger), the U.S. (Enron, Worldcom, Tyco et al) and Europe (Parmalat).

“Governance is key to the work of school boards and to the work of our education community in Alberta,” says David Anderson, executive director of ASBA. “Our government has entrusted school boards to govern education… . There is $5 billion of taxpayers’ money that is entrusted to school boards’ care and attention. They are one of the biggest employers in Alberta. So it is incredibly important school trustees are prepared to govern these always very complex, often very large jurisdictions. It is critical they know their role, are familiar with the tools they need and the diligence required to do that job effectively.”

ASBA’s key raison d’etre, says Anderson, is to “bring those tools to school board.” To that end, ASBA offers an intensive three-day seminar to all newly elected trustees, regular development programs at its twice-yearly conventions, and specifically tailored sessions at an individual school board’s request. All its programs are voluntary but, notes Anderson, well-attended. During the last round of municipal elections, when Alberta voters elected 158 brand new trustees, 133 of them attended ASBA’s orientation training.

ASBA’s orientations start with the basics: an explanation of exactly what the role of a school board and a trustee is (and what one can and cannot do in one’s role). They do include workshops on governance and financial issues, including such pointers as what questions trustees should ask of budgetary oversight committees (and, if necessary, an explanation of what a budgetary oversight committee is). “These are people from the street, from any walk of life. Anyone can be a trustee,” says Anderson.

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