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How to Maximize Fiscal Opportunities

Mike Lawson • MAC Corner • June 19, 2017

Directors are entrusted with thousands of dollars of instruments and equipment, yet along the way, few have ever had a course in business management.

At best, a methods course may have talked about the need to have an instrument inventory or maybe even the importance of creating a budget. But to maximize the fiscal opportunities that exists, we need to understand the process and be sure we have the documents to support our case.

Every program needs to have both an instrument/equipment inventory and a spreadsheet of enrollment projections. These two documents along with your calendar of events and activities for the coming year will help you to create a budget request to submit to your school administration.

Instrument/Equipment Inventory

Several categories of information should appear on the Instrument/Equipment Inventory. This information needs to be kept current, and a copy should be shared with building and district administration every six months. In addition to helping you keep track of the quality, value, condition and location of these items, it also helps for insurance purposes in the event of a catastrophic event such as a fire or tornado.

Not all instruments or pieces of equipment should appear on the Instrument/Equipment Inventory. Usually, these items have an initial cost of over $300 – $500 and are intended to last multiple years and have a value beyond the date of purchase. Check with your district’s business office to get their policy on items to include.

School Identification Number – This is a unique number that helps to differentiate it from other, similar instruments or pieces of equipment. Some schools will assign this number or already have a system in place, but if that is not the case, you should create one that could include letters and numbers. Example: A for piccolos, B for flutes, C for oboes, etc. If you had two piccolos, you would assign them the numbers A1 and A2.

Instrument/Equipment – Example: Baritone Saxophone. The name of the instrument or piece of equipment.

Brand Name – Example: Yamaha.

Model – Example: YBS52. The model is assigned by the manufacturer and is important as often the manufacturers may produce several models of a particular instrument type.

Serial Number – Example: 268742.

Year of Purchase – Example: 2015. (If you don’t have this information, you can write to the manufacturer who should have this on file. Other ways to acquire this information would be to contact your school’s business office to determine the year it was purchased or ask your local music dealer or instrument repair service.) Having a year of purchase will help you determine a current value for the instrument.

Amount of Purchase – Example: $5,000. (If you don’t have this, contact your school’s business office. If they are not able to provide it, try to establish a reasonable estimate.)

Depreciation Schedule – Example: 10 years. (Most districts use a straight-line method of depreciation. An instrument that costs $5,000.00 would depreciate 10% per year. Though the instrument/ equipment may have a useable life beyond ten years, for purposes of accounting the item would show it has no value. In some cases, your district may want to use a longer span of time for instruments such as pianos or a shorter span of time for equipment such as computers.

Current Value – Example: $300. Having a current value allows you to provide the rationale for various repairs and maintenance that may be required to keep the instrument in playing condition. If you have an instrument that was purchased for $3,000 nine years ago, it is now worth $300.00. If the instrument is in need of a total overhaul and the estimate to have the work done is $450.00, the dilemma is whether to spend $450.00 to repair an instrument that is only worth $300.00, knowing that when the repair is made it will not increase the value of the instrument.

Instrument Issue – Example: Mary Smith. You should also have a separate instrument/equipment checkout form that lists the specifics of the instrument, the quality, and condition of the instrument and any accessories that were checked out with the instrument. This document should also include the student’s contact information and spell out responsibilities and procedures in the event the instrument is damaged or lost. The person assigning the instrument, the student and the parent (guardian) should all sign the form indicating the information is correct and that they understand and agree to the responsibilities and procedures outlined.

Enrollment Projections

Keeping a record of enrollments by grade and instrument helps to forecast instrumentation and instrument needs for future years. It can also serve as a guide for recruitment and can aid in analyzing retention numbers. On finances, the enrollment projection data should be used to project specific instrument needs. For example, your school owns four cellos, and you currently have two cello players in grade 9, one in grade 10 and one in grade 11. You also know in grade 8 there is one cello player and in grade 7 there are three cello players. If these students continue, you will have five cello players next year and will have seven the following year. With only having four cellos you can easily see that you will need one more cello next year and two additional cellos the following year.

Preparing Your Budget Request

In thinking about preparing a budget request, there are several areas for you to consider. Though each district has specific budgeting processes, this overview should help in giving you some information to help begin a discussion of how to approach budgeting in your district. Have a conversation with your administrator before you begin so that they understand that you are trying to help them by planning and avoiding surprise needs. Ask them what information would help them in their planning.

Use Your Calendar

Having a calendar that includes all of the dates for performances, concerts and special events will help you to determine the amount of money you will need to run your program. When developing your budget consider instructional needs, repair and maintenance and student activity related expenses.

Instructional Needs

Instructional needs should include ensemble music for performance and supplementary music to aid in technique and ensemble development. Solo and ensemble music should be included as well as special music for community performances, sporting events, etc. Other instructional needs may include subscriptions for online resources and educational software. Entry fees for solo and ensemble events, clinicians and concert expenses such as programs, flowers, and awards may also be considered as instructional needs, or they may fall under student activity related expenses (see below).

Repairs and Maintenance

Instrument repair and end of year instrument cleaning to ensure the instrument is in good playing condition for the next year are high priority items. Piano tuning and cleaning of uniforms and accessories also fall into this category. A gray area exists when it comes to drum heads, sticks, and mallets, strings, and bows, microphone cables, etc. as this could be considered instructional needs or maintenance. You will want to check with your school for guidance.

Student Activity Related Expenses

Transportation is sometimes covered in the general school budget and other times it is an expense that is charged to your program. If a performance or activity occurs over a meal hour, check to see if your district requires you to provide a meal for your students. As indicated above, such things as entry fees, clinician expenses, and awards may also fall into this category.

Instruments/Equipment – Fixed Assets

Your updated instrument/equipment inventory included a depreciation number for each instrument. If your total instrument/ equipment inventory is worth $310,000 and everything is on a straightline depreciation schedule of 10 years, your inventory will depreciate $31,000. Even though you still have all the instruments and equipment you had last year, the value of your inventory is worth $31,000 less than it was one year ago. This $31,000 goes to the school or district’s budget as an expense, a depreciation expense. In theory, the $31,000 depreciation expense should free up $31,000 for the purchase of new or replacement instruments and equipment. Taking into consideration the condition of each instrument and the enrollment projections (instrument needs) of future years should help you to establish a priority list of new instruments and equipment you will need for your program.

Develop A Long-Term Plan

Certain items are a significant expense. Uniforms, pianos, music chairs, music stands, risers and performance shells need to be planned for well in advance. Additional or replacement instruments such as timpani, bass drums, chimes, marimbas, xylophones, vibraphones, pianos and string basses also need to have their projected replacement or acquisition dates expected.

Submitting Your Budget for Consideration

Budget requests usually occur in the early months of the year. Often, school administrators have many items that occupy their time, and the budget is something that can catch them by surprise. By being proactive and giving your administrator your plan, you stand a better chance that you will get the necessary funding you need to operate your program. Submitting a budget request early in the school year allows your administrator to begin considering your needs. If the budget request includes projections for next three to five years, you are demonstrating that you have a plan and have done your homework. Use your data to justify your requests. Using enrollment projections and providing cost per student amounts are additional ways for you to justify your requests. In the end, it comes down to your ability to communicate and plan. Administrators want a quality program, and they don’t like surprises. Getting the financial support, you need to run your program is something that must be articulated and justified. Developing these documents may take some time, and if your school does not have an updated inventory or set of enrollment projections, the task may seem daunting. But managing the business of your program is a necessary ingredient to ensure the financial support you need to help realize your educational and musical goals while providing your students a high-quality music education.

You can find additional tips for success by visiting musicachievmentcouncil.org. The Music Achievement Council (MAC) is an action-oriented non-profit organization sponsored by the National Association of School Music Dealers (NASMD) and the National Association of Music Merchants (NAMM). MAC is committed to helping teachers succeed and to create more music makers.

Charles T. Menghini is president emeritus of VanderCook College of Music in Chicago, Illinois, where he served as director of bands from 1994 – 2017 and president from 2004 – 2017. Originally from Iron Mountain, Michigan, Charles attended Northern Michigan University and the University of Missouri – Columbia where he earned his bachelor of science degree in music education. He also holds a masters degree in education from the University of Missouri – Kansas City and a doctorate of arts in wind conducting from the University of Missouri – Kansas City Conservatory. He has written for numerous professional journals and magazines and is co-author of the Essential Elements Band Method.

 

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