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Power of the Purse

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If teachers and principals are to call the shots at their schools, they also need control over the money. But the shift to school-based budgeting hasn't been easy.


Principal William Andrekopoulos bounds down a hallway of Gustav A. Fritsche Middle School here, proudly showing a visitor how the school has spent its money: Here is the metal shop that is being made into a classroom for students serving in-school suspensions. Over there is the wood shop that will become a high-technology laboratory, and up ahead is the automated media center with full access to the Internet.

In six years, the full-time staff here has grown by an assistant principal, a guidance counselor, a nurse, and a bookkeeper. The schedule has changed to give students fewer, but longer, classes. And the school has sent teachers to visit schools around the country and scheduled hours of staff-development time.

"The district would never have done that for me," Andrekopoulos keeps saying as he introduces the school nurse or waves at a new set of window blinds. "They wouldn't have done it."

The 1,010-student school didn't make these changes because of an infusion of cash. It's simply that educators at the school were allowed to decide for themselves what to do with the money they had.

In many school systems, particularly in big cities, the central office controls the purse strings. It determines everything from the number of teachers and guidance counselors in a school to how much equipment the school can purchase.

"When all is said and done," says Karen Hawley Miles, a school finance and management expert, "many schools have control, really, over their supply budget" and little else. In a large school, she adds, that means that administrators may have a say in spending perhaps $10,000 out of a total annual budget of $4 million.

But here in Milwaukee and elsewhere, that strategy is beginning to change. Funds previously controlled at the district level are being shifted to individual schools.

The assumption is that principals, teachers, and parents, who know their students best, should have the power to use their resources to better match the specific strengths and needs of those students. In return, district officials will hold schools more accountable for results.

"You wouldn't try to run a household without having control over your budget," says Diana G. Lauber, a senior program officer with the Cross City Campaign for Urban School Reform, a national network. "School-based budgeting moves the resources to those who know the needs of the kids."

Such ideas borrow heavily from restructuring in the corporate sector, where some decisionmaking has devolved to workers and managers in the field. Often, experts say, that gives those employees a greater sense of ownership and participation that results in increased productivity.

Similar goals lie behind the move toward budgeting at the school level, where educators have long complained of the futility of creating improvement plans knowing full well they lacked the financial authority to carry them out.

Some also hope that schools will use their money more efficiently if told they can reinvest any savings. Others simply want to trim what they perceive to be bloated central bureaucracies.

But what sounds good in theory has proved enormously complex in practice. Many districts don't even know how much they spend on individual schools, or whether that funding is equitable.

Myriad federal and state regulations and provisions in union contracts limit how dollars are spent.

And central-office administrators often resist attempts to wrest control from them. They may fear that shifting budgeting authority to the schools will cost them their jobs, or distrust the ability of educators in the schools to make competent funding decisions.

Indeed, many principals lack the training and the desire to make budget decisions that they view as peripherally related to instruction.

In districts that have begun the process, it has become all too clear that simply handing each school a checkbook will not automatically send test scores soaring. In addition to control over the money, schools must have a well-defined vision of how they will spend it to enhance teaching and learning.

Knowledge Is Power

Before schools can decide how to spend their resources, they need to know how much is available. In many districts, figuring out how much money each school receives can be a tremendous undertaking.

Many systems do not code expenditures by school. They may have a line item for textbooks, for example, without knowing what share each school receives. And they are often years behind the business world in the use of integrated computer networks.

"Sometimes they'll have one computer system for the general fund, another for the Title I program, and another for special education," says Allan R. Odden, a professor of educational administration at the University of Wisconsin-Madison. "At the school level, you'll have five separate documents. And when you ask how much money the school spends, there's not even a summary document. So it's very difficult for the school to put together an overall budget."

In many school systems, particularly in big cities, the central office controls the purse strings. It determines everything from the number of teachers in a school to how much equipment schools can purchase.

Often, schools do not receive funding information on a timely basis or in a form that enables them to make sound spending decisions.

Last November, Chancellor Rudy F. Crew of the New York City schools released an unusually detailed accounting of how the nation's largest district spends its money.

The 41 volumes of data--which included detailed school-by-school spending--required the merging of information from 19 computer systems, according to Lewis H. Spence, the deputy chancellor for operations.

The results were eye-opening. The school system found that it spent three times more, on average, for a full-time special-education student than for a student in a regular classroom. It spent more, on average, for elementary and middle schools than for high schools.

Funding for students also differed significantly across the city's 32 community school districts.

"I think, all along, people have realized that deep-held financial knowledge is very powerful," says Robert Berne, the vice president for academic development at New York University and a school finance scholar for more than 20 years. "The natural tendency for most central offices has been to keep people--if not in the dark--then less than fully informed about what goes on."

School-based budgeting brings funding inequities, such as those in New York City, to the fore because it clearly identifies how much money each school gets.

Milwaukee, for example, spends less on elementary schools than on middle and high schools. Spending among its elementary schools varies by more than $600 per student.

'A Lot of Constraints'

Some districts have tried to correct such disparities by basing a school's funding primarily on its enrollment and the special needs of its students. But in the end, politics often intervene, with resulting winners and losers.

The bulk of a school's budget goes toward staffing. State regulations regarding class size may determine how teachers are allocated. Laws covering special education and bilingual students often heavily influence teacher assignments, as do union contracts.

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