Why Some Charter Schools Struggle Financially: 5 Preventable Purchasing Mistakes

Charter schools often face financial pressures beyond their control. Because funding is closely tied to enrollment, even small shifts can quickly tighten cash flow. Meanwhile, many of the highest costs—staffing, facilities, transportation, and core services can’t be reduced mid-year without affecting day-to-day operations. When revenue changes faster than expenses, the squeeze shows up quickly.

In this environment, the controllable part of the budget matters more. Purchasing is one of the few areas leaders can tighten without cutting programs or people. But when the purchasing process isn’t clear, costs drift, especially when staff still need to buy quickly to keep classrooms running. Over time, workarounds, inconsistent approvals, and last-minute purchases start to feel normal.

This article outlines five preventable purchasing mistakes that commonly contribute to financial stress in charter schools, along with what changes when you address them

1. Uncontrolled purchasing cards (p-cards)

A purchasing card, often called a P-Card, is a company credit card issued to staff to purchase goods or services directly. In charter schools, P-cards are commonly used for classroom supplies, small equipment replacements, urgent maintenance needs, and vendors that don’t fit a purchase order workflow.

The problem is when P-cards become the default purchasing method. In that setup, spending is approved after the purchase, not before. Receipts and business purpose arrive late or not at all, and coding by fund, program, or grant gets pushed to month-end. That makes it hard to see patterns early and easy for discretionary spend to drift.

This tends to show up in predictable ways:

• The same category is bought from multiple vendors because it’s fastest, not cheapest
• Purchases get split to stay under informal approval thresholds
• Recurring charges and subscriptions renew without clear ownership
• Documentation is incomplete, which creates audit and compliance friction
• Finance spends more time chasing context than managing spend

How to fix it

• Limit card access: Only issue cards to roles that truly need them, with a clear purpose.
• Enforce guardrails: Set vendor, category, and dollar limits that match policy.
• Capture context immediately: Require receipt and business purpose at the time of purchase.
• Code consistently: Standardize coding to fund, program, or grant.
• Review for patterns: Do a monthly review focused on trends, not one-off charges.
• Make it easy to comply: Deploy a solution that lets staff upload receipts on the go for easy mobile spend and purchase management.

2. Invoice-only purchasing

In some charter schools, purchasing effectively happens on an invoice basis, where invoice approvals replace purchase approvals. Someone orders what they need, the vendor delivers, and finance finds out when the invoice arrives. There may be good intentions behind it. Teams are busy, needs are urgent, and it feels faster than creating a purchase order.

The problem is that invoice-only purchasing shifts control to the end of the process. By the time AP sees the charge, the money is already committed. Then the real work begins. Someone needs to confirm who requested the purchase, whether it was approved, whether it was received, and whether the pricing and quantities match expectations. If the school is trying to avoid late fees or service disruptions, the default becomes paying first and addressing it later.

That creates predictable risks:

• Missing context: AP is left chasing “who ordered this?” and “what was it for?”
• Billing errors and overcharges: Price changes, duplicate invoices, and incorrect quantities are harder to catch
• Uncontrolled renewals: Recurring services continue because no one owns the approval decision
• Weaker audit trail: It’s harder to show approval, budget alignment, and justification after the fact

Invoice-only systems also make vendor management harder. When purchases aren’t tied to an approved request, it’s easier for off-contract buying and vendor sprawl to grow quietly over time.

How to fix it

• Implement a purchase approval workflow step above a clear threshold (even if it’s lightweight)
• Use purchase orders for goods and services that are repeatable or significant
• Match what was ordered, received, and invoiced before payment (three-way match where possible)
• Own recurring spend by assigning an approver for renewals and ongoing services

3. Vendor sprawl and inconsistent buying

When buying happens through too many vendors, costs drift even if no one is overspending intentionally. The same category ends up purchased in multiple ways, from multiple places, at multiple price points. One team orders from Amazon, another uses Staples, another buys locally, and another finds a one-off vendor for speed.

This creates three predictable issues in charter schools:

• Inconsistent pricing: the school pays different prices for the same items because there’s no standard buying path.
• Missed negotiated savings: group purchasing and contract pricing only work when staff consistently buy through approved vendors.
• Duplicate purchasing: the same supplies or services get bought separately across classrooms or departments because there’s no coordination.

Many schools try to solve this by setting preferred vendors, but policy alone rarely sticks. The schools that reduce sprawl usually pair vendor standards with an easier buying path, such as approved catalogs or punchout access, so staff don’t have to choose between speed and compliance.

Vendor sprawl also increases workload. More vendors mean more onboarding, more invoice variation, more exceptions, and more time in AP just keeping records clean.

How to fix it

• Set preferred vendors by category and keep the list short
• Make the preferred option the easiest option for staff to use
• Standardize common items where consistency matters
• Review vendor count by category quarterly and consolidate intentionally

4. Several spending data sources.

Across charter schools, this comes up often. Schools aren’t short on data, but it is hard to pull together quickly enough to answer basic questions in the moment, such as what has already been committed and how much budget remains available.

When reporting takes weeks to assemble, leadership ends up managing from behind. Cost control usually starts with clearly and consistently seeing and understanding spend data, including which categories are increasing, which vendors are driving the change, and where budget drift is coming from.

How to fix it

• Standardize how purchases are categorized and coded
• Reduce the number of places spend can happen without a record
• Build a simple monthly view by category, vendor, and fund/program

5. One person owns the whole procurement process

In many charter schools, the business office is lean. It’s common for one person, often the Business Manager or Finance Director, to be the hub for everything. Sometimes that’s because there isn’t another person. Sometimes it’s because the process evolved over time and never got separated.

When a single person controls the entire transaction loop, errors are easier to miss and harder to catch early. It also creates audit and compliance friction. When your annual audit, board, or authorizer asks who approved a purchase, why a vendor was used, or how a charge tied to a program or grant, there’s often no independent check to point to.

How to fix it

• Split responsibilities where you can: request, approval, receiving, and payment should not all sit with the same person for higher-risk spend.
• Set second-review triggers: require an additional approver for high-dollar purchases, new vendors, refunds/credits, and sensitive categories.
• Make approvals auditable: keep approvals and supporting notes in one place so you can answer questions without hunting through email.

Next Steps

None of these purchasing issues show up overnight. They develop gradually as schools grow, teams stretch, and processes evolve to keep things moving. That’s why they’re easy to normalize, and why they often surface only once financial pressure is already present.

The good news is that these mistakes are operational, not structural. You don’t need to cut programs or add headcount to address this; improving your purchasing is one of the quickest wins, where small process changes can have an outsized impact. Tightening how spending decisions are made day-to-day is often the best place to start.

Want to see how others are doing it? Benchmark your purchasing patterns against peer education organizations and see where you stand.