Beyond the Budget: What Every Board Should Know About Expenditure Reporting

Why Understanding This Process Is a Crucial Part of Fulfilling Fiduciary Duty

Expenditure reporting isn’t just another box to check at year-end—it’s a reflection of your charter school’s financial integrity and public accountability. And while your school’s finance team may handle the technical details, board members play a critical role in ensuring the process is timely, transparent, and accurate.

For board members, this isn't about becoming a spreadsheet expert. It's about fulfilling your fiduciary duty—a legal and ethical responsibility to oversee how public funds are spent and safeguarded.

Fiduciary Duty: What It Really Means for Charter Boards

Every charter school board member has three core fiduciary obligations:

• Duty of Care – making informed decisions and asking the right questions.

• Duty of Loyalty – acting in the best interest of the school and its mission.

• Duty of Obedience – ensuring the school adheres to applicable laws and regulations.

Expenditure reporting sits squarely at the intersection of all three. When reports are inaccurate or incomplete, it opens the door to audit findings, compliance issues, and public trust erosion. But when the board stays engaged, it builds a culture of accountability.

Common Mistakes Boards Make (and How to Avoid Them)

1. Underestimating Reporting Complexity:
   Expenditure reports require detailed documentation, accurate coding, and alignment with specific funding requirements. Tools like the Standardized Account Code Structure (SACS) help ensure consistency—but they’re not intuitive to newcomers.

   ➡️ What the Board Should Do: Make sure your finance team - whether outsourced or internal - has the capacity and training to meet these requirements. Ask, “Do we have the right tools and people in place for accurate reporting?”
   
   

2. Leaving It to the Last Minute
   Waiting until year-end creates pressure, increases the risk of errors, and can lead to noncompliance. 

   ➡️ Board Best Practice: Set a calendar of interim financial reviews. Your finance committee should see and discuss expenditure pacing regularly—not just at fiscal year-end.
   
   

3. Overlooking Internal Checks and Balances:
   Without clear internal review processes, reporting errors may go unnoticed until it’s too late. 

   ➡️ Board Role: Confirm that internal controls are in place and functioning. Ask, “What’s our process for reviewing expenditures before they’re finalized in reports?”

Practical Steps for Board Engagement

Even if you're not preparing the report yourself, here’s how your board can lead from the front:

✅ Educate Your Team

Offer annual training on fiscal oversight and key compliance areas. Resources from your department of education can deliver financial best practices and offer practical guidance.

✅ Leverage Technology

Encourage your school to use robust, streamlined, charter-focused financial software that tracks expenditures in real time. Automation reduces errors and makes it easier for boards to get a clear view.

✅ Build a Cadence

Don’t let the board only hear about finances in June. Monthly financial checkpoints give board members visibility and confidence.

✅ Document Diligently

Good documentation isn’t just about audits—it’s about transparency. Confirm that every major expenditure has supporting materials and a clear approval trail. The IRS Audit Technique Guide for Charter Schools underscores the necessity of thorough documentation for compliance. ​IRS

Expenditure Reporting = Financial Stewardship

At the end of the day, strong expenditure reporting signals to your stakeholders—families, funders, authorizers—that you’re running a responsible, mission-driven organization.

Board engagement doesn’t mean diving into the weeds. It means showing up, asking good questions, and understanding how your school’s resources are being spent.

If this process ever feels like a scramble, it doesn’t have to be. At Charter Impact, we help charter boards bring calm, clarity, and strategy to every aspect of their financial oversight—especially the ones that often get overlooked, and we offer board training as part of every client relationship.