2016 Financial Committee Report

Finance Committee Report: 2015-2016

Step One School is a 501(c)3 non-profit organization, and thus operates under an annual budget in which we seek to balance income against expenses. Each year the Board, with guidance from the Finance Committee, sets an operating budget after careful analysis of three items (i) prior year operating results; (ii) forecasted expenses (wages, benefits and general operating expenses); and (iii) projected enrollment and tuition. We are pleased to report that for the recently completed 2015-16 school year, the school realized a modest operating surplus (income was greater than expenses).

This surplus was largely the result of stronger than anticipated enrollment in both the morning and afternoon programs, coupled with ongoing prudent expense management.  The positive results are a direct result of the hard work and budgetary discipline of the faculty and administration. Generous contributions from our community in the form of the annual campaign also contributed to the ongoing financial health of the school.

As shown in the accompanying charts, Step One is wholly dependent on tuition and donations (including grant support) as the only sources of income. All expenses, including teacher wages & benefits, school maintenance, utilities and program supplies, are covered by this income.  For 2015-16, the school managed to generate a modest surplus of $190,000. It is common for parents to wonder why Step One should have any surplus in a given year as a non profit?

It is because Step One must plan prudently for the long term: a delicate balance accounting not only for the current year, but also for unanticipated future events such as an emergency building improvement, a spike in insurance costs, or the more likely scenario of lost revenue from under-enrollment which can easily tip the budget to deficit with just one or two fewer students. This can be a very real situation when the economy slows down. The surplus enables the school to maintain a thoughtful but not excessive reserve with the oversight of the Board and Finance Committee.

We believe Step One continues to be managed in a balanced and prudent manner, and wish to thank the entire community for your contributions to ensuring the long-term health of the school.