More Education Plays

Improving schools to ensure that all students have an opportunity to succeed requires new investments to improve teacher quality, raise standards, and provide additional support for struggling students. But states and school districts often lack new funding for such initiatives. Tight budget times, combined with the imperative for education improvement, demand that states and school districts employ a "cut and invest" strategy to ensure limited education resources are put to their most effective use. Efficiency reviews, audits, and financial benchmarking can help elected officials find ways to save money or use available money more wisely.

In Texas, former State Comptroller John Sharp initiated a program to bring teams of performance management specialists to work with school boards and administrators to pinpoint areas for cost savings and redirect resources to improve quality in the classroom.

"We're going to show the taxpayers that public education will do its part to achieve savings, accountability and efficiency." -- Former Gov. Mark Warner, Virginia

Likewise, financial benchmarking software can help policymakers and administrators examine costs and expenditures against similar school districts and help determine where savings may be available. Standard and Poor's school evaluation services (SES), for example, uses business-world financial expertise and technology to analyze school and district budgets and student achievement, and makes the results available online to inform parents, educators, and the public.

In 2003, then-Virginia Gov. Mark Warner instituted a two-part efficiency review of education spending to complement his commitment to increased support for education and help school districts use the new resources effectively. First, auditors and management specialists from the state Department of Planning and Budget will work with individual school systems to identify administrative savings through better organization and management, and redeploy these resources in classrooms. Once efficient practices are identified, audit teams will share them with other districts, spreading savings across the state. Current Governor Tim Kaine has continued Warner's efforts in this area and has also undertaken also a statewide performance review that will monitor how effectively school districts use their resources to increase student achievement.

In Kansas, Gov. Kathleen Sebelius has also instituted an aggressive plan to cut waste and spend funds more wisely. The first step was to audit the state's schools to see where the money could be better spent. Funded by the Kauffman Foundation, the first Standard & Poor's (S&P) Educational Efficiency Study analyzed how highly efficient school districts allocated their resources to raise student achievement, detailed where improvements and investments could be made, while also identifying a billion dollars in government waste. As a result, the governor went back to the legislature and ushered through the largest increase in school funding in the state's history.

In order to ensure that this new money was spent wisely, she asked the Kauffman Foundation and S&P to conduct a second study to look at the efficiency of each individual school's spending. In the summer of 2007, they released the second study that identified which Kansas school districts were maximizing their resources and how less efficient districts can make improvements and spend their money more effectively.

To determine a district's efficiency, Standard & Poor's analyzed multiple data points including how much the district spends per student, the district's performance on the Kansas Reading and Math Assessments, and the percentage of students enrolled in the district with economically disadvantaged backgrounds, disabilities, or limited English proficiency.

From these data points, each school was given an efficiency score. Kansas' results range from 60 to 100 percent (meaning the least efficient district is approximately 60 percent as efficient as the most cost-effective district). The average Kansas school system received approximately 85 percent efficiency score. Of the 257 of the schools that had adequate data for analysis, 21 received scores of 100 percent and 6 received scores exceeding 99 percent.

For those school systems that want or need to improve their efficiency, this report also provides them with improvement targets and benchmarks derived from the highly efficient districts so that they can learn how to maximize their resources to improve student achievement. Governor Sebelius hopes this new tool will help school districts to understand how their use of resources influences student performance and guide them in how to improve their effectiveness.

Analyzing how money is spent is a cost-effective approach for identifying new funds for school improvement. Cutting unnecessary or inefficient legal or administrative expenses, and redeploying them to more effective uses, is an important way to increase classroom spending and invest in student achievement.

Resources For Action

Virginia's Education for a Lifetime Initiative: Accountability and Efficiency Reviews
www.doe.virginia.gov/VDOE/efficiencyreview.html

2007 Kansas School Efficiency Study
http://www.ksde.org/Default.aspx?tabid=1989

Texas Financial Accountability System Resource Guide
www.tea.state.tx.us/school.finance/audit/
resguide10/far/far.html#P62_515

Arizona Department of Education, Student Accountability Information System
www.ade.state.az.us/sais/

Standard and Poor's School Evaluation Services
www.ses.standardandpoors.com/

School Data Direct
www.schooldatadirect.org/

Additional Reading

Contacts

Ms. Sherrie Harrington
Office of the Governor
Patrick Henry Building, 3rd Floor
1111 East Broad St.
Richmond, VA 23219
(804) 786-2211

Andrew Rotherham
Co-Founder and Co-Director
Education Sector
1201 Connecticut Ave, NW
Suite 850
Washington, DC 20036
(434)973-2173
arotherham@educationsector.org