Gaping Holes in How States Track K-12 Spending

Data systems limit states’ capacity
By Daarel Burnette II — July 15, 2019 8 min read

Where, exactly, do those billions of dollars taxpayers annually spend for schools go?

In most states, policymakers really don’t know.

That’s because state education departments don’t have the technology to track the tens of thousands of transactions that district officials, using a combination of federal, state, and local dollars, make throughout the school year.

So instead, the departments give lawmakers a receipt that includes a summation of broad spending categories, a breakout of average salaries, and maybe a mention of whether spending is up or down.

This hazy picture, sometimes two to three years out of date, has frustrated both school funding advocates and conservative accountability hawks who say they can’t reform states’ K-12 spending if they’re not confident about where the money is going and assured that it’s being spent effectively.

“Every time the education department goes to the legislature with their hands out, they get it spanked away,” said Ray L’Heureux, the president of Education Institute of Hawaii, a school funding advocacy organization. “They can’t even answer the simple question, ‘What do you need and how much?’ Until we figure out whether they’re being fiscally responsible, let’s not add any more to their budget,” L’Heureux said.

The former state assistant superintendent sued the state education department last week after officials, partly because of limited data, couldn’t satisfy his several open records requests to see where the state’s K-12 dollars are spent.

But overhauling education departments’ data-collecting tools so that states can more quickly answer requests like L’Heureux’s can cost millions of dollars and fan flare-ups between policymakers over student privacy and local control. It’s a price tag and an ideology battle few policymakers want to take on.

Investing in New Technology

States’ inability to track spending accurately was on full display this year as they attempted to answer a national call to spend more on schools and raise stagnant teacher pay, comply with a looming fiscal transparency rule under the federal Every Student Succeeds Act to break out school spending amounts, and work with state legislatures to replace decades-old state funding formulas.

As this year’s legislative sessions lumbered on, questions about districts’ spending habits got more and more elaborate. The education agencies stumbled along the way.

In Mississippi, Republican Gov. Phil Bryant, on the cusp of an election year, asked his state department earlier this year how much it would cost to provide each of the state’s 32,613 teachers with a $1,500 raise. But the state’s 20-year-old student-information system, “held up by a Band-Aid,” according to the state chief, miscalculated the number of teachers paid for with state and local money.

The legislature passed a budget that was ultimately around $12 million short of the necessary amount for the raises. The teachers will still receive a raise, state officials say, but the legislature will have to fix the blunder in January to avoid already-cash-strapped districts from going into debt.

“We built this system to answer a, b, and c, and now I’m answering d,” said John Kraman, the education department’s chief information officer.

In some states, including Arizona and South Carolina, legislatures this year decided to invest millions of dollars into upgrading their systems, which also are used to collect and report academic data after system crashes and other problems.

Last year, an audit of Arizona’s payment system—Microsoft 2000 software which takes the state’s complicated funding formula and pairs it with enrollment data to decide which districts should get what—found the system was at high risk of being hacked and “eventually will fail with catastrophic consequences” unless it’s replaced soon.

A department employee, the only one in the state who knew how to fix the software when it broke down, retired last year.

“We have billions of dollars running through this state through 670 districts and charters,” said Stefan Swiat, a spokesman for the Arizona education department. “We need the most up-to-date payment system so we can be as transparent and accurate as possible.”

The state’s legislature this year set aside $9 million over the next three years to replace the software.

Similar to the movement under the federal No Child Left Behind Act to get teachers to take students’ test-score data and quickly respond to students’ needs, there’s been a growing movement in the school finance industry to make sure money is being spent as federal and state policymakers intended and on the students most in need.

The crux is that states’ budgeting and data-collecting tools aren’t able to interpret the data collected by districts’ tools, many of which are designed by a multitude of vendors. That prevents states from reporting out more-detailed spending patterns.

While some states, such as Kentucky, have forced districts to adopt states’ data-collecting tools to make the collection process more seamless, many districts have been hostile to that approach and see it as a violation of local control.

District administrators also have complained that, because there’s less and less money to pass around, they should have flexibility to spend federal, state, and local money as they’d like and that they don’t have the staff to fill out a litany of forms to assure lawmakers that they’re abiding by the law.

“In most cases, the resources that are allocated are insufficient for the services being provided,” said Clint Johnston, the superintendent of the Jefferson R-VII school district in Missouri. He said making coding changes to his district’s software is both cumbersome and expensive. “To the districts, we have all these changes coming down, we’ve seen more and more restrictions, which means you’re removing the district’s oversight ability and how those resources are being used.”

‘Actionable Data’ Needed

Nevertheless, researchers have told advocates and federal and state lawmakers that more specific and up-to-date spending data will show where states can make cost savings and show where districts need more money.

“You see what Amazon and Google are doing with data and technology and you see what health care is doing with analytics,” said Brent Engelman, the program director of data and information systems at the Council of Chief State School Officers. “Every industry is becoming increasingly reliant on data. ... It’s just the nature of the business world. Education is the same way. We want more and more high-quality and actionable data at our fingertips to provide insights and to make better decisions.”

In some states, policymaking has been partly stymied by states’ limited data.

Several Idaho politicians this year made a concerted effort to overhaul its outdated funding formula. The state’s K-12 system, which has some of the lowest spending in the nation, has changed dramatically since the formula was put into place 25 years ago. Students are more mobile, attend both vocational and charter schools in addition to their home schools, and have greater out-of-school needs.

If the state were to switch to a funding formula that would split money based on the amount of time students attend school, legislators asked the education department, how much would each school get?

But the department collects average daily attendance rather than enrollment and told legislators it would need another year to figure that out.

Next month, without any new money, the department is training district leaders on how to count enrollment using their existing systems.

“We’re a very rural state with limited resources, and dealing with all the data, and tracking it, and uploading it is an ongoing challenge,” said Marilyn Whitney, Idaho’s deputy superintendent of communications and policy.

In Hawaii, where the state department is being sued by the Education Institute of Hawaii for not being able to provide a comprehensive list of how the state spends its $1.9 billion, the state department has put out an request for a company to come and overhaul its entire school finance system.

In a statement, state Superintendent Christina Kishimoto said, “It is disappointing that a group of former employees, who have personal knowledge of the challenges of our antiquated systems, has chosen to challenge the department in the midst of our modernization process, seeking their way instead of allowing the current leadership the time to replace its financial management system and complete a redesign of a school empowerment budgeting approach. Our focus is on innovation, equity, and empowerment.”

Persuading legislators to fork over a few million dollars for something like data collecting is not easy. Teachers haven’t gotten a pay raise, students aren’t meeting state standards, and school buildings are falling apart. Why should they spend that much on what looks like more overhead?

Prone to Errors

Mississippi’s education department has asked the state legislature every year since 2015 for more money to overhaul its data-collection system and so far been rejected each time.

At its state board of education meeting last month, after the teacher-raise blunder, Kraman, the department’s chief information officer, explained through a variety of graphics the complex process the state uses to collect data and how, because the input process is manual and involves so many administrators, it is prone to errors.

At the end of his presentation, he revealed the price tag to replace the system: $11 million. Some in the audience gasped.

“In the light of eternity, $11 million is a drop in the bucket,” said state board member Rosemary G. Aultman. “Local districts ought to be lobbying their representatives for this appropriation because it’s critical to them to have good data so that they can present their issues to the public.”

To board member Johnny Franklin, the cost will pay off in the long run.

“This is our number one priority, and I mean non-compromisable almost,” Franklin said. “That is a drop in the bucket of what goes out but that’s an important drop. That’s not just a drop, that’s our bucket.”

A version of this article appeared in the July 17, 2019 edition of Education Week as Many Unknowns in K-12 Spending


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