Where the technology department falls on the organizational chart varies significantly from district to district and between organizations. In some school districts, IT falls under the purview of the Chief Academic Officer. In others, it falls under the purview of the Chief Operations Officer, as IT is increasingly a core operation the same as finance or HR or facilities. Some districts split up the instructional and technical teams between Curriculum and Operations. Ideally, IT would fall directly under the Superintendent as it’s a core service that is unique within the organization. But in corporate America, and more than a few school districts, IT falls under the finance department. This is partially because the core IT systems that run an organization’s financial and HR systems are critical to and organization’s mission continuity, partially because IT and financials are the biggest risks in an organization, and really because IT is a lot about spending money. IT is third on an organization’s list of administrative expenses, coming in behind personnel and facilities. The management of IT expenses is a critical component of a CTO’s job, possibly the most critical - as having a successful IT operation depends on having things. A CTO must both advocate for the funds that they need to create a successful technology program, while being a good steward of large sums of money. Even a small school district in North Carolina will spend over a million dollars on technology services annually. The CTO is responsible for ensuring that these funds are used appropriately, and must take care to avoid waste, fraud, and abuse.

Expense Types

In any organization, there are three major categories of expenditures: current expense, capital expenses, and grant funding.

Current Expenses

Current expenses are the day-to-day cost of keeping a school or business operational, including utility costs, personnel costs, supplies, computer software, small equipment purchases, subscriptions, services, etc.

Specific to technology, current expenses include staffing and personnel for the technology department, Internet connectivity, printer ink and paper, software subscriptions, technical support licenses, and computer peripheral purchases (keyboards, mouses, etc).

Capital Expenses

Capital expenditures are large purchases of assets that are expected to last multiple years, like land, school buildings, furniture, busses, as well as computer and network hardware. Historically, a capital expenditure was arbitrarily considered something that has a value of $5,000 or greater, though as computers have gotten cheaper, they’ve continued to be considered capital expenses. These assets are called fixed assets, which is a business term that means that the asset is not “expected to be consumed or converted into cash within a year”. The maintenance of fixed assets, such as building maintenance supplies, and repair parts for busses and IT equipment are also typically considered capital expenses. Because fixed assets are real property held by a school district, a school district’s books must account for fixed assets in their ledgers (hence the reason that many schools or organizations place fixed asset tags on devices and keep an inventory through the finance department). Because most of these assets will lose value over time, the finance department will reduce the value over the expected lifespan of a computer in their ledgers. This process is called depreciation. For example, a computer may have a usable lifespan of 4 years. Therefore, the district will carry the full value of the computer on their property ledger for the first year, and typically reduce that amount by 25% per year until the item has no value at the end of the 4th year. In the event the computer doesn’t last four years and has to be retired early, the finance department writes the remaining value of that computer off as a loss. This has tax implications for non-governmental entities, since they can write these losses off on their taxes. Land does not depreciate in value and a building may actually appreciate over time, and districts will reflect these changes on their books as well.

For CTOs, capital expenditures include computers, network switches and wifi access points, wiring (and the labor for wiring), datacenters, air conditioning for server rooms, etc.

Grant Funding

A grant is money given by a government or organization to serve a specific purpose or complete a specific task. Grants typically come in two flavors. A block grant is issued by the government at a calculated amount to serve a certain student population or group. Title I funds, CTE funds, and EC funds are all examples of block grants. Competative grants are grants where an organization applies to receive grant funds and a certain number of grants are awarded based on merit. Both governments and non-governmental entities will issue competitive grants. Grant funds are typically the most restrictive types of funding, as funding must be used to complete a specific set of goals or be directed to serve a specific function. Grant funds usually also come with the strictest oversight. While there is still significant oversight and monitoring with block grants, especially with Federal grants, districts have much more leeway with block grants. Competative grants typically require a strict budget and deviation typically requires pre-approval.

Grants can typically be used for either current expense or capital purchases, though different grantmakers may prescribe what is and is not an eligible expense (for example, many grants do not allow personnel costs to be charged to grants).