Predictive Financial Modeling with AI: Insights from the 2023-24 NBOA Leadership Academy

AI offers the independent school business office immediate benefits, and promises a more automated and efficient future.

Jun 12, 2024

ai concept

The following summary focuses on the 2024 report, “Empowering Business Office To Harness the Power of AI.” The report’s authors include Rachel Barr, Indian Creek School; Jeff Bingham, Casady School; Jaqueline Fellini, Thayer Academy; and Erin Martin, Silverdale Baptist Academy. Nancy Greene, CFO at Pine Crest School in Florida, served as the peer mentor.

As the buzz around artificial intelligence (AI) grows louder, business officers at independent schools are increasingly aware of its potential to revolutionize financial operations and planning. But how many have tried implementing these technologies to see their potential benefits firsthand? And how many are prepared to navigate the challenges and opportunities that come with AI adoption?

Additionally, the cohort participated in webinars, watched online videos and conducted extensive online research and direct trial-and-error experiments in professional settings, to inform the results and recommendations discussed in the report. The cohort used ChatGPT, a generative AI tool, to better understand “prompt engineering” through a trial-and-error process.

The 2023-24 Leadership Academy cohort explored these questions and more in several key areas of responsibility: financial analysis, legal compliance, human resources and facilities management. The resulting recommendations are meant to help business officers realize immediate benefits while preparing for a more automated and efficient future.

Strategies for strengthening financial management include:

Financial Analysis and Modeling

ChatGPT and other large language models (LLMs) have the capacity to analyze, distill and respond to large amounts of data. To test these capabilities, the cohort uploaded a sample (not actual) Excel-based budget file into ChatGPT-4’s Advanced Data Analysis plugin (aka a GPT). The goal was to generate tables and graphs from raw data. The plugin successfully produced interactive visualizations accessible through an HTML dashboard link. The cohort concluded that AI was effective in cutting down the time it takes to create new visualizations.

However, it is important to consider what school information is uploaded into AI tools; sensitive, private and protected information should never be uploaded into an AI tool. While platforms like Eilla AI promise anonymity, their efficacy and security were not tested as part of the research project.

Data Analysis and Systems Thinking

While ChatGPT itself does not yet perform predictive analytics, other more narrow forms of AI do. Instructional videos and self-teaching tools are available to help business officers maximize the capacity of ChatGPT and other AI-driven data analytics tools.

The cohort tasked ChatGPT with outlining a "new and improved" website structure for a sample school based on school descriptions, the existing website, and faculty and staff testimonials. ChatGPT provided a bulleted list outlining the main and sub-pages of the website. Responses were refined in a Google Document, resulting in a first draft of the website's structure and content.

Policies and Procedures

Policies and procedures, though often tedious, are crucial for a school's operations. Using AI, business officers can efficiently create documents like a four-paragraph cash receipts memo for auditors or a two-page Conflict of Interest policy for trustees' review and signature.

When generating content like policies and procedures, it’s critical that AI-produced content undergoes rigorous review for legal compliance and accuracy. While the tool is helpful, it may not always be accurate. Therefore, school leaders should meticulously review the results to align with legal regulations and the school’s mission, vision and values.

Many independent schools are faced with the challenge of identifying additional classroom spaces in the face of growing student populations, which can cause a host of issues in schools, from staffing to budget challenges. However, efforts to expand can be complicated by a variety of factors such as lack of available real estate in an urban location or older buildings that present challenges for renovating. When construction and expansion is not an option, schools need to explore other options.

While there is no “one size fits all” solution, research conducted by the 2024 Leadership Academy cohort provides a roadmap for schools seeking to address capacity constraints and enhance student learning experiences.



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