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Bob Newsome was thrilled to land the job as head of Whitecastle Country Day — a small K–12 school with a solid reputation in the area. He worked hard to learn as much as possible about the school in advance of his start date. He spent time with faculty and staff, and made an effort to overlap frequently with Andrew Reynolds, the long-serving, outgoing head who was much beloved in the community. For his part, Reynolds was generous and supportive of Newsome as soon as his selection was announced.
Now it was late summer and school would be opening soon. Jeff Dillard, the school’s accountant for the past 15 years, was making the case to Newsome for moving money from the “sports fund-raising” line to the “computer upkeep” line in their budget. This, Dillard said, was the way they’d been balancing the books for years. Donors and alumni enthusiastically supported sports teams at the school, but were less inspired by the nuts and bolts of running an operation. The recent spring appeal had been a big success, he claimed, because of the sports target: additional equipment and improvement to playing fields. “Our funding comes in from alumni around the country,” Dillard explained, “former students who are unlikely to visit the campus any time soon. They’ll never know exactly where their money went, and we need those new computers to stay competitive with other area schools.”
The situation worried Newsome. He had studied the appeal letter, and to him it appeared that the money’s purpose was clearly restricted to sports. Maybe there was some gray-area tradition to the bookkeeping here that just hadn’t come up during his transition work with Reynolds, and hadn’t been mentioned during the many budget meetings he’d attended with trustees. But the “headline test” in his mind read: “School misleads donors about where their money would be spent.”
Newsome felt he was in a jam. If he went along with Dillard’s suggestion now, it would be even harder to justify a change to this dubious practice down the road, or to uphold standards for any other questionable practices that might come up. However, if he immediately set things straight, he’d be questioning the school’s accounting, the former head, and the trustees. What kind of trust could he build long-term?
Newsome thanked Dillard for the information and suggested they meet later in the week to take up the matter again. Then Newsome took some time to think. If he considered the greatest good through an “ends-based” approach to his decision, the path was unclear. There was the good to consider in upgrading their computers, and the good that results from maintaining harmony in a new culture. But what about the good of the greatest number — the alumni and donors inspired to give money? Wasn’t it wrong to divert their donations year after year away from the sports programs without their consent? At the same time, wasn’t there a risk from infusing more honesty into the school’s fund-raising processes in the future? Would donations dry up entirely? What “good” would that do the school? And what of the immediate budget issue that had to be resolved? The Kantian in Newsome wanted to take the “rule-based” approach about every angle of this mess. He knew dishonesty when he saw it, and he didn’t want any part of it. Finally, when Newsome thought about a “care-based” approach, his thoughts turned to Dillard who had kept the books and kept the school afloat for years. Questioning his integrity would be hurtful and offensive, a terrible start to their relationship.
Newsome found he was losing sleep that night, tossing and turning with worry about the situation. He resolved early the next morning to call his mentor, Joe Watson, a veteran school head who was always ready to help. When Newsome read the appeal letter over the phone, its explicit nature was even more obvious. The appeal clearly indicated that funds raised would be restricted to the purposes specified. Therefore, it was illegal to put any of that money toward a different need.
“You’re treating this as a dilemma, but there’s really no decision here at all,” Watson said. “Your instincts are right. If you don’t raise this issue immediately with your trustees, you’re responsible if it comes to light. Furthermore, there’s a very good chance most of your trustees aren’t even aware of this ongoing practice. You mentioned that board members change frequently at the school, and that only one has served the 20 years of your predecessor. When you bring this up, I’m sure you’ll find full support for doing the right thing. If you don’t, this is not a school you want to work in and you should resign immediately.”
While Newsome was not looking forward to tackling this issue, he found himself truly relieved to have clarity about his next steps.
Resolution
Newsome brought the issue to his trustees immediately, and was pleased that Watson had predicted correctly: They were not trained to read the budget and quarterly financial reports as carefully as they should, and they were immediately supportive of correcting the issue. Newsome set up a two-day trustees training retreat in which all members participated in learning their obligations and building skills to meet those responsibilities. A further outcome to the action was to dismiss Dillard for questionable accounting practices, and replacing the school’s outside legal counsel.
Had Newsome checked the “Tests for Wrong” at the start, he might have saved a bit of stress:
• The Legal Test — Am I breaking a rule or law and prepared to face the consequences?
• The Gut-Feeling Test — Am I losing sleep at night or experiencing other physical discomfort?
• The Headline Test – Can I defend this action if it’s publicized tomorrow?
• The Role-Model Test — Would someone I trust make this same choice?
While the Legal Test was initially unclear (he needed a second opinion from Watson to feel completely confident about the appeal letter’s stated intent), Newsome’s gut feeling was a strong warning that the action didn’t square with his values. He couldn’t imagine a positive headline for the situation, and Watson, a role model, clearly said, “This is a bad idea and don’t go along with it!”
Not all decisions we make are right vs. right choices, and tests for wrong can often shed needed light. Dillard, the accountant, had convinced himself (or had been convinced by others) that both choices in this situation were valid, but in fact, this questionable accounting practice didn’t pass any of the four Tests for Wrong!