Funding Allocation and Accountability

Funding Allocation and Accountability
School Budget and Funding

Funding Allocation and Accountability
School finance issues are of paramount concern to all levels of the education system national, state, district, and school. Indeed, every child’s future, as well as the future of a society in general, depends largely on the quality of the educational system. As expectations rise for students and teachers to perform at higher levels, and for schools to guarantee the success of all students, the question of how best to support this reform through the effective and efficient allocation of resources becomes even more critical. Research efforts in recent decades have helped broaden our understanding of the role of school resources in student outcomes and how their distribution and use might be improved. The purpose of this paper is to analyze how school districts allocate funds by functional area, determine the districts spending focus and if those funds are used wisely and appropriately for the defined purpose based on best practices for securing and allocating funds.
Allocation of funds by Functional Areas
During an interview with the Chief Financial Officer of Duval County Schools (Jacksonville, FL), Michael Perrone, district funding allocation and accountability was discussed. According to Parrone (2013), the district is funded by a combination of Local, State and Federal money with the largest percentage from Local 32%. Sales tax is the largest income source for the State and property taxes are the largest source of revenue from local funding. Revenues that the district receives for specific activities or from the various sources are attained for certain objectives such as Food Service and Capital Outlay. These are restricted revenues. When revenue is not designated for a specific purpose, it is usually placed in the General Fund which is 61% of the total budget.
The General Fund
The resources of the General Fund are used primarily for salaries ($523.0 million) and employee benefits ($163.8 million) totaling $686.8 million, or approximately 67.2% of the total estimated General Fund budget. From a functional point of view, expenditures for instruction ($644.7 million) and instructional support (pupil personnel, instructional media, curriculum development, in-service training, and instruction related technology) ($105.5 million) account for approximately 73.4% of the General Fund budget. Expenditures for Other Support Services (General Administration, Central Services, Maintenance of Plant, Community Education, Debt Service, Fiscal Services, School Board, Facilities, School Administration, Custodial and Student Transportation) account for approximately 23.8% of the General Fund budget. Transfers, Reserves and Fund Balances make up the remaining 2.8% of the Total General Fund budget.

Debt Service Fund

School districts are required to account for the payments of interest and principal on general long-term debt in the Debt Service Fund. The Debt Service budget totals $39.3 million for 2012-2013 and represents 2.4% of the District’s total budget. A total of $26.5 million is expected to be paid in principal, interest, and fee payments. The District normally maintains a level of debt service for a sinking fund.

Capital Projects Fund
The district’s current capital outlay budget is estimated at $189.8 million, 11.4% of the budget. Capital Projects Funds report the revenues, transfers, and appropriations for construction, renovation, maintenance and repair of educational facilities.
Special Revenue Fund - Food Service

The Special Revenue budget for the Food Service Program totals $60.4 million for 2012-2013 and represents 3.6% of our total budget. The Food Service Program of the Duval County Public Schools is supported by Federal and State funds, and through meal charges to adults and students. The programs include the National School Lunch Program, School Breakfast Program, Summer Lunch Program, the Special Milk Program, Summer Food Service Program, After School Snack Program, and the Child/Adult Care Food Program.
Special Revenue Fund - Federal
The Special Revenue Fund - Federal budget totals $149.8 million for 2012-2013 and represents 9.0% of the total budget. Special Revenue Fund - Federal grants and entitlements are received by the District from various federal and state agencies. To receive federal funds, projects must be approved by the School Board and the Department of Education or other governing agency.
Internal Service Fund
The Internal Service Budget totals $174.5 million for 2012-2013 and represents 10.5% of the total budget. State accounting procedures require the establishment of a special fund to account for expenditures in our self-insurance programs. Items in this year’s Internal Service funds include the print shop, worker’s compensation insurance, general liability insurance and employee health insurance.
Evaluation
According to Perrone (2013) a study of the district conducted by independent consulting group Education Resource Strategies (ERS), Duval County was one of the lowest funded districts of any they have studied. Initially this may not sound so good but this also means that the district spent proportionally less on central administration and board expenses, and proportionally more directly at the school level than any other district they had previously studied. Conversely, parents of Duval County students seemed to disagree. Parents from Duval County and across Florida recently filed suit against the state’s education system setting off legal and political battles over the future of Florida schools. The lawsuit accused the state’s leaders of failing to provide the necessary resources for education, leading to low graduation rates, unsafe schools and higher property taxes. It draws on a constitutional amendment approved by voters in 1998 calling for Florida to make education a “paramount duty” of the state. Florida Parents may have a point. According to the 2012 US Census, out of the 50 largest school districts in the nation, the New York City School District spent the most per pupil with $19,597. New York state also spent the most on instruction. Average spent per pupil: $16,841. New Jersey received less federal funding than Mississippi, the fifth lowest spending state, but made up for it in local funds. They ranked second for spending on instruction. Florida ranked 50th in per capita spending per pupil on K-12 education and 41st in spending per pupil spending. Funding was approximately $7,000 while the U.S. average was over $10,000.
Perrone (2013) argue against the statistics by stating that Florida is one of the few states with school districts concurrent with county boundaries. As such, we have 5 of the top 12 largest school districts in the nation. According to the National Center of Education Statistics (2012), Florida spends more than 65% of funds in the classroom and is well below the national average for spending for administration which is consistent with NEA best practices.
In the Handbook of Research in Education Finance and Policy, Duncombe and Yinger
(2008) sum up the main factors thought to affect educational costs (cost factors): Education costs can be affected by three categories of factors, each of which is outside of the district control: 1) geographic differences in resource prices, 2) district size, and 3) the special needs of some students. (p. 238). Therefore, proper allocations of funds can seem subpar by unforeseen circumstances but still can show gains.
Financial Resources and Student Performance
The link between resources and student performance has been investigated in depth by economists and educational researchers for several decades using methods designed to explain and quantify an educational “production function”2. A production function is used to describe the important and powerful variables contributing to student performance outcomes like test scores or high school graduation rates. Conclusion
Funding allocation and accountability is important for education decision makers at all levels. Emphasizing the wise use of resources not only makes financial sense but also has implications for student success. School districts produce reams of financial data to check off the right boxes on accounting and compliance reports required by states and the federal government. Typically missing is any financial analysis that follows the money into the school building to the classroom. Yet the classroom is where the mission-critical work happens and where the conversion of resources into services affects student performance. Educators need indicators that tell them whether the basic design and operation of their schools direct resources in ways that sustain and enhance the district’s academic strategies and priorities. Academic outcomes are only one such indicator; a measure of spending that enables comparison across service areas is another.

References
Final budget duval county public schools fiscal year 2012-2013 [Annual report]. (2012, September 18). Retrieved from Duval County Public School website: http://www.duvalschools.org/budget_final_2012.pdf

Adams, J.E., Jr. (1997). Organizational context and district resource allocation: Does the setting matter? Journal of Education Finance, 23, 234-258.

Ballou, D. (1998). The condition of urban school finance: Efficient resource allocation in urban schools. In W.J. Fowler, Jr. (Ed.), Selected papers in school finance, 1996 (pp. 61-84).Washington, D.C.: National Center for Education Statistics.