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Pioneering Studies Show How Dollars Are Spent

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School budgets, as they are typically organized, may be well suited to advance a political agenda or a public-relations purpose, but an increasing number of experts say they are often of little use for making a more basic decision: how best to spend taxpayers' money.

Recent analyses of local spending have, for the first time, given top district administrators, researchers, and the public a definitive glimpse of how much money actually reaches classrooms. Pioneering school-by-school budget studies have been done in recent months from Hawaii to Vermont.

And analysts watching states and districts try on a vast wardrobe of school-reform designs say they are becoming more convinced that business officials, principals, and teachers need to get a better grip on what they are spending and why.

"School districts have tons of data, but they have no information," said Larry D. Maloney, the director of the Center for Workforce Preparation and Quality Education, a program of the U.S. Chamber of Commerce in Washington. "It would be hard to say that a lot of people are making informed decisions."

Easy To Manipulate

James H. Snider, a former member of the Burlington, Vt., school board, agrees. Mr. Snider assembled a task force to study the schools' budget practices after becoming frustrated with the confusing budget reports that district officials regularly produced.

"The budget report was a political document, which might not be unexpected or unusual in Washington, but there they have checks and balances, and people can see right through it," said Mr. Snider, now a fellow in the political-science department at Northwestern University in Evanston, Ill.

"The public does not have a sense that these are public-relations documents," he said. "They believe in the scientific power of numbers."

School-finance experts say that local budgets can easily manipulate student-enrollment figures, per-pupil costs, program spending, and how employee benefits are distributed. And making salary and compensation figures public can create local controversies or tip the district's hand to employee unions that may be about to negotiate a new contract.

In addition, the statistics presented in budgets are used to sketch a picture of the district as a whole and can be used by superintendents who want to manipulate a school system's public image, critics of current practices argue.

In Burlington, Mr. Snider said, budgets traditionally were designed to convince local residents that programs had been cut and that the annual tax increase was needed and should be passed. The result, however, was that the budgets and the statistics they contained were of no real use to board members and top administrators as planning or management tools, the task force found.

"It does not facilitate publicaccountability or provide for theeffective allocation of public monies," the 1994 report of the Burlington School Budget Study Group says of the budget document. "There are numerous instances where the information is so incomplete, inadequate, or misleading that the budget as a whole is incomprehensible."

Burlington school officials used the suggestions to change the way they organize and present the budget, making it vastly more comprehensible, according to district officials.

A Budget Priority

In one Chicago suburb, transforming the role of the local budget has become a priority. Business officials in the 2,000-student Bensenville Elementary School District #2 have spent a great deal of energy in recent years simplifying the budget process and making the information more accessible to employees and residents.

The district participates in a variety of national school-reform efforts and is working to empower its teachers through school-based decisionmaking councils.

"More attention has got to be paid to operational expenditures as they relate to learning," said James E. Bauer, the district's business manager. "Our taxpayers expect it, and we can combine technology with information through our budget to make the wisest choices with the dollars that are available."

Teachers and principals can access the schools' financial data to find out how much money is being spent on a given program and how much is available if they want to buy something.

"It makes my job easier when people involved in making decisions can see not only where their school stands, but the picture for the whole district," Mr. Bauer said.

The Bottom Line

While the information has helped school employees, it has yet to translate into a new point of view for residents. In the past two years, Bensenville voters have rejected three referendums to raise money for the district. A fourth ballot measure will be decided next month. It would provide an additional $2.7 million to the district's $12 million annual budget.

Beyond the argument for better management, being able to answer outside criticism and respond to the scrutiny of local taxpayers may be the chief reasons that school districts are beginning to think twice about the way they use their local budgets.

Robert B. Peterson, whose management-accounting firm has developed computer software for the Bensenville district, said facing tough questions about how money is spent is a job that local school officials should be getting used to.

"At this point, local school spending is still a very mystical thing," said Mr. Peterson, the president of C4SI Inc. in Oak Park, Ill. "In a lot of places, budgets are not built on actual expenses but on how much was spent last year, and numbers are manipulated to fit the budget's needs."

"That's not management," Mr. Peterson said. "I'm not sure what you'd call it, but it's not management."

Mr. Peterson's firm and the U.S. Chamber of Commerce are each taking a leading role in the drive to push school districts to givea more detailed accounting of their work. Both have announced plans to offer software to school districts that would track spending and help compile various management reports.

At a meeting held this month to unveil the software, several officials, including U.S. Secretary of Education Richard W. Riley, implored districts to make their spending easier to understand.

"There are a considerable number of people who believe that focusing on efficiency and looking at costs is the direction that education must go," Mr. Peterson said. "It is no longer an art form."

Mr. Snider added: "A lot of people think this is irrelevant. Everyone that ever came on the school board wanted to be on the curriculum committee. But knowing how money is transferred between accounts is power, and the budget is where you represent your values."

"That is where the bottom line is," he said.

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