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Lesson 8.8

Effectiveness:
Is Education Money Well Spent?

Do schools waste money?

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When people talk about whether education funds are "well spent", they can be using two different definitions.

One definition is that a district or charter school is fiscally responsible. California has a number of systems in place to hold school districts accountable on this score.

The second definition is that the system is getting an acceptable level of educational productivity - student achievement, in other words - out of the resources it spends.

Well Spent = Fiscal Responsibility

Financial mismanagement by a school district is rare, but does occur -- and it makes the news when it happens. There are about 10,000 schools in California, each of them the size of small- to medium- sized business. It's a big system, so there is always a whiff of scandal to be found someplace. When mismanagement occurs, it tends to sow doubt, and to inspire vigilance and scrutiny.

California school districts live under scrutiny. They are required to balance their budgets annually and document how they will cover their projected operating expenses. They also have to show how they intend to cover long term obligations, such as employee contracts and raises. They must use a standardized account code structure to track their revenues and expenditures, report to the state about their past and current budgets, pay for annual independent audits, and operate within a variety of other legal constraints.

The County Sheriffs

Since 1991, California has had a system in place to hold districts accountable for their fiscal management. First with the passage of AB 1200 and then with revisions made in 2004, the state requires County Offices of Education to review the annual budgets of each local school district. Districts must certify if they are able to meet their financial obligations for the coming three years. County offices of education validate those self-certifications. Interventions occur when districts or county offices find that a district is not going to be able to pay its bills.

This system works quite well. In the Great Recession, only two school districts were taken over by the state.

Faced with the dramatic revenue cuts that began in 2008, over 100 of California’s school districts found themselves in financial trouble but only two ended up with the state stepping in to provide a loan and take over their financial affairs. Given the extent of the cuts, the state’s safeguards proved quite effective.

Well-Spent = Educational Productivity

Money is not magic. States and locales that increase spending don’t automatically see dramatic improvement in student outcomes. Money can pay for things that help students learn more, but it can also be used to pay for things that don't.

Are you going to get better student outcomes if you pay higher teacher salaries? Your district can do that, and might make itself more attractive to great teaching candidates in the process. But concentrating investment on fewer teachers implies that each teacher will be responsible for more students. Will students do better if class sizes are smaller, but the strongest candidates choose other schools? There's no easy answer.

There are wonderful programs and tools for learning. Should your district lay aside funds to invest in those? What extra supports will work best to improve the achievement of your district’s lowest-performing students? Absent additional funding, what has to be sacrificed to bring in a new program? When funding does increase, what will improve student learning most? An extended day? A new arts program? More time devoted to professional development for teachers? These are the hard tradeoffs that school boards must make.

A fun tool for evaluating school expenditures. A fun tool for evaluating school expenditures.

Which expenditure choices will yield the best results? Answering that question is far from an exact science, and school districts often call on consulting organizations to help them think it through. For example, Education Resource Strategies provides tools like this one to support community members and district leaders as they consider the tradeoffs.

All of these questions feel particularly difficult to answer in California. As described in Lesson 8.1, the state’s investment in public education is so low that it almost certainly is part of the reason for California’s weak test results. As discussed in Lesson 1.2, weak test results are bad news partly because they predict a society's future economic health.

The next lesson explores the options Californians have for raising the level of education funding.

Updated August 2017

Review

In the Great Recession, decreased funding put enormous pressure on school systems. How many of California's ~1,000 school districts were taken over by the state during this period for fiscal insolvency?

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Questions & Comments

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user avatar
g4joer6 April 22, 2015 at 10:11 pm
I say yes to the excerpt from above: " When funding does increase, what will improve student learning more – an extended day and a new arts program or more time devoted to professional development for teachers?
user avatar
Steven N October 1, 2015 at 12:48 pm
But as a Board member, it is often a Zero-Sum-Game. So the question is 'what does the community want more'? A new arts program may have no measurable effect on academic measures - but be very valued by the parents. An extendeed day, if well implemented in K-3 for Economically Disadvantaged, should have statistically significant standardized test score results - which are very valued by the residential property owners! (who then vote for more Parcel Taxes). A poorly done PD program for teachers - will have no gain. Productivity is not equal to Expendatures.
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