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2 Studies Conflict on Spending by California Schools

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Two new reports offering conflicting views on how efficiently California school districts spend state education funds have added weapons to the arsenals of both proponents and opponents of increased state aid.

The first, by the state department of education, provides a detailed breakdown of the costs for an "average" school in the state during the 1985-86 school year. The department claims its study is the first of its kind in the nation.

According to the report, 63 percent of the revenue from all sources spent by an average school went to salaries and classroom supplies; 19 percent was spent on operating and maintaining buildings, and feeding and transporting students; 7 percent on pay for principals, secretaries, and other clerical staff; 5 percent on instructional support, including pay for librarians and curriculum specialists; 5.5 percent on district and county administrative costs; and 0.5 percent was spent by the state department of education.

"We have never asked for more money without expecting to be held accountable," said Bill Honig, the state school superintendent, in a statement accompanying the Nov. 11 report. "The figures we have compiled are useful tools to guide critical policy discussions about how best to spend our public-education dollars." Conflicting Report

But shortly after the department released its report, an independent state watchdog agency released a4study concluding that the education department cannot assess the financial condition and performance of districts because the financial information they provide to the department "is frequently inaccurate, incomplete, or late."

The nine-month review of the state's school-finance system undertaken by the California Commission on State Government Organization and Economy, also known as the Little Hoover Commission, found that:

"There is increasing evidence of poor financial health and inadequate financial management in some K-to-12 school districts."

"The financial and compliance audit reports prepared for school districts are frequently substandard and late and vary in cost."

"The state superintendent of public instruction has insufficient authority to intervene in school districts that are not operating in a financially responsible manner."

"Certain school districts in the state are potential candidates for consolidation."

"Our basic concern is that we don't see the financial accountability that is warranted in a system that spends $20 billion a year," said Robert T. O'Neill, executive director of the commission.

"It is incumbent upon school districts to have their financial house in order" before seeking additional funding from the state, he said. Such requests may represent legitimate needs, he added, but with the lack of accountability in the current system, "they're hard to defend."

The Little Hoover Commission re8port has rankled officials in the state education department, who believe it lends ammunition to critics of their drive to increase the level of state school aid.

While acknowledging that the commission identified some real problems, they also said that many had been addressed by a series of laws enacted during the past four years.

Nevertheless, said Mr. O'Neill, state officials in California still have far less authority to ensure financial accountability than do officials in several of the largest states, including Illinois, New York, and Texas.

Officials of the California Teachers Association, an affiliate of the National Education Association, said the problems identified by the commission are indicative of a more fundamental problem with school financing in the state.

"It may look like the districts are engaging in sloppy bookkeeping and budgeting, but because of the way the state is funding now, there is no better way to go about it," said Bill Hayward, a spokesman for the cta

School districts in California are required to set their budgets for the upcoming school year by late April or May, he said, but the state's education budget is not completed until midsummer.

Initiative Proposed

"We need to get a steady funding mechanism, so schools can know in advance how to plan their budgets," Mr. Hayward said. "For the most part, [districts' financial management] is pretty good, within the limitations of the funding process."

A coalition of education groups including the cta, the California pta, and the Association of California School Administrators has proposed a ballot initiative that would require the state to spend annually the same amount on education as it did in 1985-86, adjusted for changes in enrollment and inflation.

The initiative, which will go before voters in November 1988 if the required number of signatures is collected, would also guarantee that schools would receive a portion of revenues the state collects above the "Gann" spending limit, named for the sponsor of the consitutional amendment that limits the annual growth of state and local spending.

If the provisions of the initiative had been in effect this year, said Mr. Hayward, public schools would have received $700 million of the $1.1 billion that was returned by the state to taxpayers this fall.

In addition, the initiative would require each school to publish an annual "report card" listing information in at least 13 categories, including student achievement and attendance, per-pupil expenditures, the quality of textbooks, classroom discipline, and the quality of school instruction and leadership.

Meanwhile, supporters of a separate ballot initiative that would amend the Gann spending limit to allow greater increases in state and local spending are expected to submit the signatures they have collected to state election officials this month. If at least 650,000 of the signatures are validated, the initiative will appear on the ballot next June.

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