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How Independent Schools Move Forward Amid Coronavirus Crisis

As independent schools across the country face unprecedented disruption caused by the outbreak of COVID-19, all have taken steps to adapt and adjust the delivery of educational services and many aspects of their overall operations.

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As independent schools across the country face unprecedented disruption caused by the outbreak of COVID-19, all have taken steps to adapt and adjust the delivery of educational services and many aspects of their overall operations.

As independent schools across the country face unprecedented disruption caused by the outbreak of Coronavirus Disease 19 (COVID-19), all have taken steps to adapt and adjust the delivery of educational services and many aspects of their overall operations.  While there is uncertainty around the ultimate duration of the virus, one thing is certain: normal will not return to what it once was.

Educational institutions have emerged as leaders in the quest to contain the spread of the virus, recognizing early the need to implement changes quickly.  Many independent schools wisely began their planning and communications as early as February, before the COVID-19 outbreak fully took hold in the United States.  Websites were updated to include pop-up messages about COVID-19; resource pages containing information about the virus and links to other resources were created; electronic communications were sent to students, families, faculty, staff and alumni; and key administrators were identified as points of contact.  Ultimately, on- and off-campus activities were suspended or cancelled for the remainder of the academic year, with classrooms moving to virtual platforms.  These were all very necessary steps to take.

While they were seemingly out in front of physical distancing measures, independent schools are grappling with a number of questions and concerns.  Clearly the closure of campus is very impactful to the overall school community—disrupting academic, athletic and social calendars.  Campus closure has led to some logistical problems, including appropriate planning for the care of international students, storage of student belongings, and protocols for faculty and staff who reside in campus housing.  There are also unbudgeted expenses, including purchase of virtual meeting software licenses and campus cleaning, as well as possible refunds to families.

Perhaps the question with which independent schools are wrestling the most is the unknown impact of COVID-19 on fiscal 2021 enrollment.  Although many independent schools have reported that enrollment is trending consistently or slightly better compared to the same point in time last year, Business Officers are proceeding cautiously.  There is concern over the impact of extended distance learning measures on the value proposition, the impact on international students, and lack of accessibility of campus to an entire population of potential new students (many independent schools have cancelled most summer programs, which are often-times relied upon not only as a source of auxiliary revenues but also as a means to introduce the school to potential students).  In an effort to secure commitments from families and preserve enrollment levels, some Business Officers have eliminated the financial risk for families by relaxing the refund clause typically included in enrollment contracts.

Given the continued uncertainty, what steps should independent schools take to ensure they remain vital once the pandemic has run its course?  The path forward is a navigable one and knowledge is power.  The following are some productive measures to consider to help navigate this path and to protect the school’s resources.

Continue to Communicate

Health and safety remain first and foremost.  There is an abundance of information available through various outlets—and that information changes frequently.  Additionally, this information may likely lead the school to change its plan.  This may create anxiety in the community, so it is important that independent schools focus on communicating facts and to explain as best as possible the rationales for their decisions.  Independent schools have done a great job in this area, and by continuing to do so will instill calm and confidence.

Project Cash Flow and Monitor Regularly

In times of crisis, cash flow rather than operating results becomes the basis for making critical decisions.  A prudent cash flow model covers 90-day cycles of sources and uses of cash, monitors cash positions and is updated on a regular basis.  Again, knowledge is power and the data made available by a proper cash flow projection becomes available sooner for more informed decisions.  The projection should take into account various enrollment assumptions based on information that becomes available on reenrollments and yields.

Business Continuity Planning

Over the years, significant time and resources have been invested to create and test emergency response and crisis communications plans.  As risk management in independent schools continues to evolve, now is a good time to review, update or in some cases create the school’s business continuity plan.  The plan should include answers or guidance on critical matters such as the possible need to operate with significantly reduced staffing or without key process holders (payroll, cash management, etc.) who are unable to perform their functions.  The cash flow projection model discussed should consider the financial impact of some of the disruptions anticipated by the plan.

Review Processes, Policies and Contract Language

The impact of the pandemic has clearly changed how business is conducted by all organizations.  Regardless of how long current measures are needed, now is a good time to review employee handbooks and certain policies over work-from-home protocol, internal controls over areas that typically require manual approval, and especially wording in enrollment contracts.  There have been significant discussions related to certain contract enforceability and refund clauses.  Work closely with professionals having the appropriate expertise (legal counsel, accountants, insurance brokers, etc.) and involve them in planning and ongoing discussions to identify other areas of risk.

Reinforce Cyber Vigilance and Security Measures

Remote work and distance learning platforms have created an ideal environment for hackers to target and exploit a school’s security measures.  Remind all administrators, faculty, staff and families of the need to practice extreme cyber vigilance.  They should remain watchful for and skeptical of phishing emails, unusual requests for password resets and a variety of other social engineering type attacks.

Distance learning has given rise to a phenomenon referred to as “Zoombombing,” where hackers infiltrate the distance learning platform and proceed to disrupt the session, oftentimes with objectionable material.  Evaluate protective settings for the delivery platform of choice and implement those simple safeguards and best practices.

This is, of course, an extraordinary time for everyone, and independent schools—like so many other businesses—are learning and adjusting on the fly.  Despite the abnormality of the “new normal,” there are clear steps that can be taken now to help pave the way back to a more familiar routine when this subsides; schools that take those steps now give themselves a much better opportunity for a full recovery.

 

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