Northshore School District’s internal auditor looks beyond the budget numbers

For Mike Bailey, Northshore School District’s new internal auditor, the District’s Strategic Plan aligns well with one of the programs he helped develop as a 30-year member of the Government Finance Officers Association: ensure that the District’s budgets illustrate that resources are being used to accomplish the District’s instructional goals. 

Bailey, who is a certified public accountant, joined the District in mid-August as a consultant to bring more transparency to the District’s finances.

He said the District already has a good track record of doing things well when it comes to finances, but he wants to go beyond the numbers and find out where they can be improved.

Bailey explained that the state’s Office of Superintendent of Public Instruction deals with budgets in a very mechanical way--funding formulas, apportionment and numbers, but it does not consider how finances line up with the District’s priorities.

“The budget right now is primarily numbers, pages of numbers. The resulting budget from this effort will be primarily written materials, explanations, and illustrations of the strategies and plans that are put in place,” Bailey said. “So, we will be moving from a 100 percent financial approach to a strategy-focused approach supported by numbers. The numbers won’t be predominant, they’ll be in a supporting role.”

Bailey added that he also will be looking at equity from a financial perspective, since it’s the key theme in the District’s Strategic Plan. He said he will be looking at fee structures for activities in schools, whether in academics or extracurricular. 

“Are those fees equitable? Equity not only has to do with how we spend money, but it also impacts the internal audit side of my responsibilities as well,” said Bailey.

Bailey said he will be looking into financial trends to adjust budgetary plans. He said the state mandates that school districts submit a plan that looks at the next four years, but it’s a very “mechanical” prescription. He said there can be more to a four-year plan than just numbers, which can be easily accomplished with a spreadsheet. The key, he said, is “how to influence those trends with what we see happening in our community today. How do we bend trends to achieve our strategic goals?”

“We want to be very thoughtful and intentional not just with the next budget, but the plan going forward,” he stated.

Bailey has a bachelor’s and a master’s degree from the University of Puget Sound and lives in Woodinville. Two of his four adult children work in education—a daughter who teaches in Snohomish County and a son who is an information technology manager at the Edmonds School District.