CharterFolk Contributor Russell Raney – When You Don’t Know What You Don’t Know,You’d Better Have a Back Office That Does!

Good morning, CharterFolk.

Today we’re delighted to share a Contributor Column from Russell Raney, the CFO for New Schools For Alabama.

We provide a bio for Russell below.

Russell Raney is the Chief Financial Officer for New Schools for Alabama. Russell brings extensive experience to the financial services at New Schools for Alabama, having served as Chief School Financial Officer with multiple school districts in Alabama. He has also holds numerous relevant certifications and has served as finance director for the Alabama Association of School Boards. 

When You Don’t Know What You Don’t Know,You’d Better Have a Back Office That Does!

Alabama is one of the fastest-growing states in the charter school movement, and demand for high-quality back-office services is extremely high.  New Schools for Alabama (NSFA) has grown alongside the charter school sector and has become the largest back-office provider in the state of Alabama.  NSFA did not set out to be a provider of back-office services, but as we observed a high rate of turnover among in-house CSFOs and out-of-state providers unfamiliar with the complexities and nuances of public education finance in Alabama, we decided to create a team of professionals to address these deficiencies.   

Our goal was not only to protect the growing charter school sector in Alabama, but also to structure our back-office services to provide high-quality services at a lower overall cost than an in-house back-office team.  With our shared cost approach, we can offer a full-service finance team, school food service and federal programs support at a fraction of what it costs to provide these services in-house.  On average, we can provide these services through our contracted model at two-thirds of the cost of a traditional in-house approach. 

In addition to providing direct cost savings with our back-office model, NSFA has also been instrumental in facilitating other savings for charter schools.  One example is the statewide school food consortium and the bid for school food management services.  By observing an ongoing problem with multiple individual local food service providers used by charter schools throughout the state, we helped form a consortium to initiate a statewide bid for all charter schools, thereby drawing on the volume of multiple schools, which resulted in interest from a national food service management company, which ultimately was awarded the bid for food service at all charter schools in Alabama.  This not only resulted in immediate cost savings for the charter schools but also eliminated the turnover they had experienced with other food service providers.   

In today’s increasingly complex educational landscape, effective financial management is no longer optional—it is essential. For charter schools in particular, where autonomy is paired with accountability, the role of a strong back-office function can determine not only operational success but long-term sustainability.   At NSFA, we have built ahigh-quality back-office team by tapping into the experienced talent that exists in Alabama, leveraging relationships in the public education sector, and listening to feedback from our clients to enhance the scope of our services along the way. Our retention rate speaks to the relationships and trust we have developed with our clients. 

At its core, a back-office team is responsible for ensuring that financial operations are accurate, compliant, and aligned with the organization’s mission. This includes managing accounting, payroll, budgeting, financial reporting, audits, and cash flow. Beyond these technical responsibilities, a competent back office must also provide strategic insight—helping leadership make informed decisions through forecasting, risk assessment, and financial planning. The ability to communicate financial information clearly and effectively is just as important as technical expertise.  

Whether schools choose to manage finances in-house or outsource a third-party provider, understanding what to expect from a back-office team is critical.  In-house teams offer direct control and immediate access, but they require significant investment in staffing and training. Not all financial professionals possess the full range of skills needed; for example, some may excel at processing transactions but lack the ability to forecast and guide strategy. Outsourcing, on the other hand, can provide access to specialized expertise and scalable services, though it introduces considerations around communication, oversight, and alignment with organizational goals. 

Regardless of the model chosen, conducting a thorough needs assessment is a crucial first step. Organizations must evaluate their internal capabilities, identify gaps, and determine the level of support required. Additionally, leaders should consider the total cost of each approach—not just in terms of dollars, but also in terms of risk, efficiency, and long-term value. 

If outsourcing is pursued, selecting the right partner is crucial.  Importantly, organizations must assess not only a provider’s general accounting experience but also their familiarity with charter school regulations, funding streams, and compliance requirements.  General accounting knowledge does not automatically translate to expertise in the charter school sector, where adherence to standards and specific state requirements is mandatory.  

Once a provider is selected, the contract and onboarding process set the foundation for a successful partnership. Contracts should define roles, responsibilities, performance metrics, and termination terms, ensuring that both parties are aligned from the outset. Onboarding requires careful planning, including establishing communication protocols, assigning points of contact, and ensuring that all financial data is accurately transferred. A comprehensive financial policies and procedures manual is essential to maintaining internal controls and clarifying expectations. 

A key principle that underpins all financial management is data integrity. Accurate financial reporting depends on accurate input. Back-office providers rely on schools to supply complete and timely information for every transaction. Without clean data, even the most skilled provider cannot produce reliable reports. This collaborative responsibility underscores the importance of strong communication and shared accountability. 

Oversight and evaluation are equally important. Governing boards, as custodians of public funds, must ensure that appropriate safeguards are in place. Regular evaluation of the back-office function should consider factors such as financial accuracy, compliance, responsiveness, strategic support, and overall value. Timely reporting, clean audits, and clear financial dashboards are indicators of a well-functioning system. Conversely, delays, inconsistencies, or a lack of transparency may signal deeper issues. The consequences of poor financial management can be severe.  A significant percentage of charter school closures are linked to financial mismanagement.   

Ultimately, the relationship between a school and its back-office provider should be viewed as a partnership. Clear expectations, open communication, and mutual accountability are essential to success. When managed effectively, a strong back-office function does more than keep the books—it empowers organizations to achieve their mission, make strategic decisions, and navigate challenges with confidence.