Budget & Finance

N.Y.C. School-Based Budgeting Linked to Test-Score Gains

By Debra Viadero — August 07, 2002 3 min read
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A “quiet but radical” overhaul has transformed the New York City public schools from a top-down to a bottom-up management system—and seems to have improved student achievement in the bargain, a study concludes.

“The Final Report of the Evaluation of the Performance Driven Budgeting Initiative,” is available from the Institute for Education and Social Policy of New York University. (Requires Adobe’s Acrobat Reader.)

Researchers from New York University’s Institute for Education and Social Policy spent five years tracking the progress of New York’s long-running experiment with “performance-driven budgeting.” The idea behind the system, which was been tried around the country in one form or another with mixed success, was to move control of the purse strings from the central administration to the city’s local districts and schools.

In the nation’s largest school system, the move to performance-based budgeting began in 1997, under then-Schools Chancellor Rudolph F. Crew. Six mostly low-income community school districts volunteered to test the approach, but two-thirds of the city’s elementary and middle schools and 22 of the city’s 32 community districts use the budgeting system now.

To get a handle on how the changes affected the 1.1 million-student system, the NYU researchers held focus groups, conducted interviews, and did annual surveys with central-office staff members, mid-level district administrators, teachers, principals, and parents. They pored over documents, sat in on planning meetings, and analyzed databases and test results.

The test-score data showed that students in the first 61 schools to join the project were outscoring their counterparts elsewhere in the city—and in their own districts—after just three years. Though slight, the differences were statistically significant, the researchers said in their report. The report was presented to the board of education in May, but not widely publicized until this summer.

The recent mayoral takeover of the city’s school system raises questions about the future success of the new management system. Mayor Michael R. Bloomberg, who engineered the move by the state legislature to give his office near-total control of the schools, announced his choice for schools chancellor, Joel I. Klein, last week. (“Former Justice Official to Head N.Y.C. Schools,” August 7, 2002.)

“It depends totally on whether the new administration understands how radical a change this is,” said Norm Fruchter, the executive director of the NYU center. “If not, it’s just another budgeting system.”

Surprising Findings

The improvements, coming in schools attended mostly by low-income and minority students, surprised researchers and educators alike.

“We were stunned,” said Dorothy E. Siegel, who led the privately financed study with Mr. Fruchter. Both former members of community school boards, she and Mr. Fruchter understood “how the inertia of the system keeps ‘yessing’ you and nothing ever happens,” she said.

Likewise, said Beverly D. Donohue, the chief financial officer for the city’s board of education, “it always intuitively made sense to us that decisions about use of money should be made nearest to where services are delivered and nearest to where children’s needs are located. We never expected to see—frankly—any statistical evidence as soon as we have.”

The change to a more locally driven budgeting system was dramatic for a district long bound by its massive central bureaucracy, according to the study. Where administrators once had to wait six weeks for an OK from the central office to order a box of pens or hire a new teacher, they could get overnight approval for such expenditures from their local district offices under the new system.

Besides boosting efficiency, the performance-driven budgeting system also gave local districts and schools the flexibility to target resources better, the researchers say. If students’ math and reading achievement presented particular problems, for example, a school could use money that would normally go for a new teacher to hire a part-time reading specialist and a part-time math specialist.

To help schools determine where to put their money, community districts furnished them with a sophisticated software system that provided data on students’ academic performance as well as on schools’ ongoing budget statuses. Administrators, working with local site councils, are required to use the achievement data in drawing up educational plans for their schools each year.

By the same token, the community districts had the authority to decide how much budgetary discretion individual schools could handle. A school with a new principal, for example, might have had to follow a more prescriptive budget plan than one with stable leadership and a record of success.

A version of this article appeared in the August 07, 2002 edition of Education Week as N.Y.C. School-Based Budgeting Linked to Test-Score Gains


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